Musk expects fast ramp up at new German, U.S. plants

Tesla expects a fast production ramp up at its new factories in Berlin, Germany, and Austin, Texas.

CEO Elon Musk said the automaker should be able to make up for any production shortfalls in the first half of the year from coronavirus-related shutdowns at its factory in Shanghai.

Musk said Tesla is on track to expand production to more than 1.5 million vehicles this year. It delivered about 936,000 cars in 2021.

"We may pull a rabbit out of the hat," Musk said on a first-quarter earnings conference call on Wednesday. "Q3 and Q4 will be substantially higher."

Tesla delivered its first Texas-made Model Y vehicles earlier this month. The company started Model Y output in Berlin in March.

During the call, Musk did not mention Twitter, which he offered to buy last week for $43 billion.

Investors worry about Musk being distracted by his Twitter bid at a time when Tesla is ramping up production at the Berlin and Texas factories.

"Factory ramps take time, and Gigafactory Austin and Gigafactory Berlin-Brandenburg will be no different," Tesla said in a statement.

The new factories will be key to meeting demand and reducing reliance on its Shanghai factory, its biggest one, which is recovering from a plant shutdown during the city's latest COVID-19 outbreak.

In a note to investors Craig Irwin at Roth Capital said: "Chinese production issues seem well managed, and we expect Austin and Berlin to make up the slack from Shanghai’s 19-day outage," he said.

On the investor conference call, Musk said Tesla has a reasonable shot at achieving 60 percent vehicle delivery growth this year and remains confident of seeing 50 percent annual delivery growth for several years.

Reuters and Bloomberg contributed to this report