R2 Assembly Production Rate & Time Per Vehicle + Annual Capacity (and vs. R1)

[sunydrm]

Tesla production is shrinking because sales are shrinking. Factory utilization is going
down, and so is Gross Margin. They are lowering vehicle prices to try and keep sales up and
to prevent factory utilization from getting worse. That hurts their margins.

Running a factory at below optimal capacity is like flying an airline with empty seats.

Year __Total Production_Installed Capacity__Est. Utilization __GAAP Gross Margin
2025 ____(Est.)~1,700,000 __ ~2,350,000 ______ ~72% ______ ~17.8%
2024 __________1,773,443 __~2,350,000 ______ ~75% _______ 18.2%
2023__________1,845,985 __~2,350,000 ______ ~79% _______18.2%
(This chart is generated by Gemini, it is for entertainment purposes only.)

If Cybercab is a big hit, this trend could turn around. If the ramp is too slow, more
trouble is ahead.

Tesla ran 4 days a week in 2022

Teslas production capcity numbers are from 7 days a week which they don't do.

In fremont I believe they did 4 days a week (48 hrs) and then 3 days a week (36 hr) shifts. Tesla runs 24/7 during those days

When they had the best sales quarter ever for model Y (Q3) they were at most running one extra day

your argument is that it costs significantly more to build a production line that can reduce cycle time vs running the factory 7 days a week. I'm not sure about that

Sponsored

 

[140 degrees]

I didn't include 2022 because everything was impacted by supply chain issues. It was an atypical year. It was also the last year before Tesla's big decline in Gross Margins began. Tesla's Gross Margin in 2022 was 25.6%. Including 2022 makes the slide look even worse.

This is my last post on this string. Defending something because it is what 'Tesla always does' makes absolutely no sense. Happy Holidays everyone!

 

[mkhuffman]

...
If you've followed the progress Rivian has made over the past three years, I don't think there's any question that the R2 will be made at a gross profit (at least) from the beginning.

I have and I also have doubts.

It is extremely difficult to manufacture BEVs at a positive gross margin, and if Rivian can do it, they will be one of the very, very few that can.

I am going to be skeptical until I see the first quarter financial results after they have started selling the R2. I totally expect it to start at a loss, but hope to be surprised.

 

[funnynardo]

Maybe the new "stripper" Model Ys that were released after the federal tax credit ended, but not the other models. Displays up front and back, heated and cooled seats up front, heated in the rear, heated steering wheel, power liftgate in the rear, panoramic roof, matrix LED headlights, large frunk, wireless charging, plenty of storage, adjustable angle rear seats, FSD, all wheel drive, performance models, rear or AWD, double pane glass all around, and a wealth of software features.

Do tell me what is so "basic" compared to an R2? The fact that the tailgate glass doesn't roll down or the rear quarter windows don't pop out?

not only that, but the non standard models also have improved interior materials, with soft touch surfaces everywhere, higher quality metals and textiles, etc.

 

[captainjp]

Tesla ran 4 days a week in 2022

Teslas production capcity numbers are from 7 days a week which they don't do.

In fremont I believe they did 4 days a week (48 hrs) and then 3 days a week (36 hr) shifts. Tesla runs 24/7 during those days

When they had the best sales quarter ever for model Y (Q3) they were at most running one extra day

your argument is that it costs significantly more to build a production line that can reduce cycle time vs running the factory 7 days a week. I'm not sure about that

It IS more expensive to shorten cycle time than to extend operating days.

All of that is significantly more expensive than using existing equipment 7 days a week.

Running a factory more days increases output linearly at low incremental cost.
Shrinking cycle time requires capital-intensive redesign with diminishing returns.

Automakers universally increase utilization before reinvesting to cut seconds from cycle time — because it’s the cheaper path.

Tesla is no exception.

(I can use an LLM too)

 

[ndmiller]

No expert but when Tesla can fabricate a model Y in 2.5 hours start to finish seems we have a long away to go with production line efficiency for the R2 to be profitable. This would be data from Teslas most efficient manufacturing line. Their goal is a vehicle coming off the line every 30-40 seconds. What am I missing?

Tesla's been making cars for 15 years, Rivian maybe 3-4.

How long did the original Model S/X take to make back early 2010's? AI Says below "It took 5 years for Tesla to produce 2K/Week" and other sites way 100 hours per car labor although no precise figures are available. Feels like Rivian's in the ball park.

Precise figures for the assembly time per vehicle (in hours or days) for the Tesla Model S and Model X at their respective launches in 2012 and 2015 were not publicly disclosed. Tesla and other automakers typically report production in terms of aggregate weekly or quarterly rates, rather than time per individual vehicle. However, some contextual information provides insight into the production efficiency during that era:
General Assembly Timeframe: In general, individual vehicles at the Tesla Fremont factory take between three and five days to complete the entire assembly process from start to finish. This is the process time, not the labor hours.
Production Ramp-Up: Tesla's initial production was slow and faced significant bottlenecks, particularly with the Model X.

• Production Rates over time:
  • It took Tesla five years to reach a combined production rate of 2,000 units per week for both the Model S and Model X.
  • By the end of 2015 (Model X launch year), Tesla aimed for a weekly production rate of 2,000 vehicles combined for both models.
  • By Q2 2015, they produced 12,807 vehicles total for the quarter, and by Q4 2015 they delivered 17,478 vehicles. This shows a gradual ramp-up rather than immediate high volume.
• Comparison to Modern Production: In later years (around 2020), internal estimates or comparisons by industry figures suggested a Tesla vehicle assembly might take around 10 hours of labor, compared to 30-40 hours for some traditional automakers. The initial launch numbers would likely have been higher (less efficient) than these later estimates.

 

[DuoRivian]

Tesla's been making cars for 15 years, Rivian maybe 3-4.

How long did the original Model S/X take to make back early 2010's? AI Says below "It took 5 years for Tesla to produce 2K/Week" and other sites way 100 hours per car labor although no precise figures are available. Feels like Rivian's in the ball park.

Precise figures for the assembly time per vehicle (in hours or days) for the Tesla Model S and Model X at their respective launches in 2012 and 2015 were not publicly disclosed. Tesla and other automakers typically report production in terms of aggregate weekly or quarterly rates, rather than time per individual vehicle. However, some contextual information provides insight into the production efficiency during that era:
General Assembly Timeframe: In general, individual vehicles at the Tesla Fremont factory take between three and five days to complete the entire assembly process from start to finish. This is the process time, not the labor hours.
Production Ramp-Up: Tesla's initial production was slow and faced significant bottlenecks, particularly with the Model X.

• Production Rates over time:
  • It took Tesla five years to reach a combined production rate of 2,000 units per week for both the Model S and Model X.
  • By the end of 2015 (Model X launch year), Tesla aimed for a weekly production rate of 2,000 vehicles combined for both models.
  • By Q2 2015, they produced 12,807 vehicles total for the quarter, and by Q4 2015 they delivered 17,478 vehicles. This shows a gradual ramp-up rather than immediate high volume.
• Comparison to Modern Production: In later years (around 2020), internal estimates or comparisons by industry figures suggested a Tesla vehicle assembly might take around 10 hours of labor, compared to 30-40 hours for some traditional automakers. The initial launch numbers would likely have been higher (less efficient) than these later estimates.

Understand why you use this as an example but things have moved on in the past 15 years and Rivian (and others) have learnt from Tesla what to do and what not to do.

 

[Who-Dat]

No expert but when Tesla can fabricate a model Y in 2.5 hours start to finish seems we have a long away to go with production line efficiency for the R2 to be profitable. This would be data from Teslas most efficient manufacturing line. Their goal is a vehicle coming off the line every 30-40 seconds. What am I missing

**** LOL If a TESLA Model Y only take 2.5 hours to build.. then it shows from all the issues people talk about from panel gap issues, paint quality issues, etc. Fast does not make it better only cheap with low quality. That's all I have to say about that...( Forest Gump .Quote"

 

[ghostowl]

Honestly, I don't care about net assembly time. Its not a meaningful number. All it really tells me is how parallelizable the process is. A number I'm curious about is "total assembly time if everything was done serially". (Mostly because that is likely a measure of complexity and manufacturing cost.)

By comparison for a vehicle priced similar to an R1, the modern C8 corvette is about 2.5 days net assembly time.

The interesting number is how much time between each vehicle produced -- which they do provide. Because that is the real rate of generation.



(As a side note, if you ever are near the corvette factory -- they do an amazing tour if you are interested in how cars are built.)

 

[sunydrm]

It IS more expensive to shorten cycle time than to extend operating days.

All of that is significantly more expensive than using existing equipment 7 days a week.

Running a factory more days increases output linearly at low incremental cost.
Shrinking cycle time requires capital-intensive redesign with diminishing returns.

Automakers universally increase utilization before reinvesting to cut seconds from cycle time — because it’s the cheaper path.

Tesla is no exception.

I did not use an LLM. You're assuming that equipment is the reason that rivian produces them slowly and it costs more to build an efficient production line.

You also do not factor in labor cost and/or overtime. Tesla runs 12 hr shifts because they feel it is the most efficient, but you lose efficiency (and pay a lot of overtime) if you work employees too many days a week. That's why tesla does 4 day and 3 day alternating weeks.

On the off days, tesla is doing production line upgrades and construction

 

[COdogman]

I did not use an LLM. You're assuming that equipment is the reason that rivian produces them slowly and it costs more to build an efficient production line.

You also do not factor in labor cost and/or overtime. Tesla runs 12 hr shifts because they feel it is the most efficient, but you lose efficiency (and pay a lot of overtime) if you work employees too many days a week. That's why tesla does 4 day and 3 day alternating weeks.

On the off days, tesla is doing production line upgrades and construction

Ok sunydrm
aka pamalabama
aka jabanks32


https://www.rivianforums.com/forum/...el-y-l-cheap-model-y-chevy-bolt.49993/page-10

 

[captainjp]

I did not use an LLM. You're assuming that equipment is the reason that rivian produces them slowly and it costs more to build an efficient production line.

You also do not factor in labor cost and/or overtime. Tesla runs 12 hr shifts because they feel it is the most efficient, but you lose efficiency (and pay a lot of overtime) if you work employees too many days a week. That's why tesla does 4 day and 3 day alternating weeks.

On the off days, tesla is doing production line upgrades and construction

*yawn*

You can argue using your LLM to argue with mine all day long.

You’re framing Tesla’s schedule as if it somehow invalidates the published production capacity figures, but that simply isn’t how automotive throughput is measured. Production capacity is expressed as potential output assuming full utilization, not “how many days per week the company chooses to run in a given quarter.” Every automaker reports capacity this way—GM, Toyota, BMW, Tesla, Rivian, all of them. So saying “Tesla doesn’t run 7 days so the capacity number is fake” misunderstands how the metric works across the entire industry.

You also keep assuming Rivian’s slower throughput is primarily because they aren’t using the same shift structure, but Rivian themselves publicly attribute their bottlenecks to equipment, automation gaps, and manufacturing maturity—not labor schedules. Their takt time, body-shop automation density, and general line architecture simply aren’t equivalent to Tesla’s yet. That’s normal for a younger manufacturer, but it is the reason their units-per-hour lags behind.

And on labor cost: yes, Tesla pays overtime. But every company already bakes labor cost into their cost-per-unit. Higher overtime doesn’t magically erase throughput advantages. If 12-hour shifts let Tesla push more units through at a higher net efficiency—even with OT—that’s still a throughput win. “OT exists” isn’t a counterargument unless you show that Rivian’s alternative creates higher net efficiency, which we don’t see in their output numbers.

As for downtime: every factory has planned maintenance windows. Tesla doing upgrades on off-days doesn’t change the fact that their effective production hours per week—under the same schedule you’re referencing—still yield dramatically higher units-per-hour than Rivian achieves. That’s the whole point: even with the same constraints (maintenance, labor, breaks, etc.) Tesla’s line design produces far more output.

So the core issue isn’t shift patterns, overtime strategy, or how often they pause for upgrades. The core issue is that Rivian’s manufacturing architecture isn’t yet optimized enough to hit Tesla-level throughput—something Rivian themselves openly acknowledge.

 

[sunydrm]

“Tesla doesn’t run 7 days so the capacity number is fake” misunderstands how the metric works across the entire industry.

I never said that.

And on labor cost: yes, Tesla pays overtime. But every company already bakes labor cost into their cost-per-unit. Higher overtime doesn’t magically erase throughput advantages.

In texas overtime is based on hours per week. Not like california. That means you don't get overtime pay for a 36 hr work week, and for a 48 hr one you only get 8 hours of overtime pay, not 16

You also keep assuming Rivian’s slower throughput is primarily because they aren’t using the same shift structure, but Rivian themselves publicly attribute their bottlenecks to equipment, automation gaps, and manufacturing maturity—not labor schedules. Their takt time, body-shop automation density, and general line architecture simply aren’t equivalent to Tesla’s yet. That’s normal for a younger manufacturer, but it is the reason their units-per-hour lags behind.

I never said that. I was arguing whether producing a car faster is better than producing a car slower but utilizing the factory more. That doesn't make sense to me

That assumes excessive upfront cost is the reason that tesla is able to produce a car so quickly

 

[Gen(R3)Xer]

I remember in the early days Tesla tried to rush the painting process. It caused all kinds of quality issues (uneven paint, orange peel, etc.) It’s one of the reasons they experimented with stainless steel (didn’t work out) and are building the CyberCab out of an unpainted plastic composite.

 

[captainjp]

That means you don't get overtime pay for a 36 hr work week, and for a 48 hr one you only get 8 hours of overtime pay, not 16

I don’t see the correlation. California pays OT on anything over 8 hours daily. In what scenario would one receive 16 hours of OT for 48 hours of labor?

Sponsored