Tesla Hiring Engineers For Drive Systems Manufacturing At Gigafactory

| About: Tesla Motors (TSLA)

Summary

Tesla's website lists at least six Gigafactory jobs for Drive Systems manufacturing and control systems engineers.

Drive Motor/Unit production at the Gigafactory hasn't been stated in prior Tesla filings.

Analysts on the upcoming Q&A Conference Call need to determine if the capital for this is being allocated from Model 3 or Gigafactory.

In multiple SEC filings, Tesla (NASDAQ:TSLA) has repeatedly stated that it would be manufacturing cells and battery packs at the Gigafactory to support the production of 400,000 units per year for the Model 3. But where will the drive motors for those vehicles be built? Based on recent job postings on the Careers section of the Tesla website, it appears that the company is planning for that production to occur at the Gigafactory.

Though this author has never held any kind of investment in Tesla, I live in the Reno/Sparks area, 25 miles due west of the Gigafactory, and have a great interest in its development. That's because Tesla has the potential to bring positive changes to this biggest little area of Northern Nevada.

As one way of tracking hiring progress at the Gigafactory, searches were set up at Indeed.com, a popular job search website, which would notify me of any new Gigafactory-related jobs.

Several weeks ago, a listing for a Manufacturing Engineer, Drive Unit - Rotors appeared on the Tesla website. It indicated a location on Electric Avenue in Sparks, NV, and described the position as follows:

Tesla is seeking a highly motivated Manufacturing Engineer for our Gigafactory in Reno Sparks Nevada to develop new processes and high volume automation equipment for Tesla Drive Unit assembly lines.

Our Drive Systems production lines include highly automated manufacturing systems for Rotors, Stators, Motor and Drive Unit assembly and tests.

Quite intriguing, but as Tesla had never mentioned the Gigafactory being utilized for drive motor or drive unit production in its 10-Q and 10-K filings, it seemed prudent to wait for some sort of confirmation before submitting an article to Seeking Alpha.

That confirmation appears to have arrived, as in the past few weeks, five more Drive Systems manufacturing jobs have been listed, with the most recent appearing three days ago (as this article is being written). These positions are:

Associate Manufacturing Engineer, Drive Unit - Rotors

Associate Manufacturing Engineer, Drive Unit - Stators

Controls Engineer, Drive Unit

Manufacturing Engineer, Final Assembly (Two positions listed)

In this author's opinion, the lack of any mention of a specific model vehicle in the Gigafactory Drive Systems engineering jobs, along with the stated desire to "develop new processes and high volume automation equipment" points to manufacturing these units for the Model 3.

There are several other positions that show the job location as being in Sparks, but the descriptions appear to indicate otherwise. For example, they speak of building a "world class manufacturing facility right here in the Bay Area." At least one of these descriptions also mentions "reducing cost and increasing capacity on Model S" which again points to the Fremont plant. On the other hand, this could mean that the company plans to continue building Model S and Model X drive units in Fremont for the immediate future but intends to eventually move that production to Nevada.

The question for investors is: Will this have any effect on Tesla's overall capital requirements? In this author's opinion, the answer is no, because it is probably safe to assume that when Tesla estimated the capital needed to go to full Model 3 production, it included the cost of building motor and drive unit assembly lines.

The Gigafactory will certainly be large enough, especially at the planned 13 million square foot final size, to allow space for multiple electric motor and drive unit production lines. But has the cost for this Drive Systems space been included in the existing capital estimates for the Gigafactory, or will there be some other arrangement?

Another couple of questions arise: If engineers are being hired now, how long will it take them to bring the Gigafactory Drive Systems pilot lines online, and will they be able to support the planned introduction of the Model 3 in 3Q/17?

Hopefully, the publication of this article will spur Tesla into disclosing more of its Model 3 Drive Systems plans in the upcoming 3Q/16 Quarterly Letter and the 10-Q filing. But if they are not mentioned in the Quarterly Letter, this author hopes that one of the analysts on the October 26, 2016, Financial Results and Q&A Conference Call will ask CEO Musk about these Gigafactory job listings.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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