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Tesla Badly Misses Model 3 Production Goals (wsj.com)
An anonymous reader quotes a report from The Wall Street Journal (Warning: source may be paywalled; alternative source): Tesla badly missed its goal of building 1,500 Model 3 cars in the third quarter, the first sign that the production ramp-up for the new sedan isn't going as smoothly as planned. The Silicon Valley electric-car maker built 260 of the Model 3s between July and September, the company said Monday in a statement. In August, the auto maker predicted it would build more than 1,500 Model 3s before cranking up production to 5,000 a week by the end of the fourth quarter. Tesla blamed "production bottlenecks" for the weaker production. "It is important to emphasize that there are no fundamental issues with the Model 3 production or supply chain," Tesla said in a statement. "We understand what needs to be fixed and we are confident of addressing the manufacturing bottleneck issues in the near-term."
Can someone explain to me why missing predicted goals - by even as much as 50% - is such a big issue with investors?
Any time Tesla comes out slightly lower than "predicted results" the market analysts go haywire, it's all "doom and gloom! We warned you about Tesla! It's a baaaaaad investment!".
There are people who, with a straight face, talk about Tesla being fraudulent, being 3-months away from insolvent, or being super hyper over inflated in some way. "Look at Tesla's capitalization, and compare it to Ford's!!! There's *no way* Tesla will ever be as big as Ford!"
And Musk is a con man, Tesla only survives because of federal grants and will go under once those grants are revoked, Tesla sells cars at a loss, chewing through investor money...
WTF?
Is there a *rational* explanation for all this bugaboo reporting?
If you ask them about the delay, Elon might cancel your order.
#DeleteChrome
Bottlenecks in a production line are extremely difficult to address. There's been tons of excellent books about it (such as The Goal) but it remains a major issue in companies with a normal growth so it's not surprising to see Tesla struggling with that given their insane expansion pace.
I spent years in the manufacturing world and countless times I've seen stuff like HR authorizing crazy overtime in the weeks following a layoff or plant managers scrambling to rent containers to store surplus of a part that was backorder the week before. You got JIT? Next thing you know Texas is blown away and gas prices skyrocket, making parts more expensive to get delivered. You decide to build up inventory? Real estate prices go up and you end up paying top dollar for low quality warehouses.
Supply chain, project management and interest rates: all examples of things that are too complex for the human mind to fully comprehend.
lucm, indeed.
"Musk can't build a rocket"
Later... "Okay but he can't build a cheap rocket"
Later... "Okay but he can't make them reusable"
Later... "Okay but he needs the military and they'll never use him"
etc etc
"Electric cars will never work"
Later... "Okay but they'll never have the performance of petrol cars"
Later... "Okay but car manufacturers will never embrace them"
Later... "Okay but Musk isn't a car manufacturer"
Later... "Okay but they'll never have a range of more than 100 km"
Later... "Okay but there's no practical way to charge them quickly enough"
Later... "Okay but they'll never be able to mass-produce them"
etc etc
Take a look at Boeings woes with the 787 production, or Airbuses with the A380 - highly trained, experienced workforces on both sides, but significant production issues in both cases.
In the case of the A380, the production models suffered from issues that weren't apparent in CADCAM phases, and in the case of the 787 it was a company fuck up top to bottom (when your fastener supplier says "12 months lead time" 18 months before you need them, you don't leave your order for another 15 months and expect them to deliver in 3...)
Even established companies with serious experience behind them can have issues with a new products ramp up - Tesla isn't unique.
Tesla is basically trying to compress +100 years of automobile development, infrastructure, manufacturing, and marketing within the span of about a few years, all while trying to rewrite the book. They have no where near the number of facilities(companies like Ford have 100s of acres of facilities dedicated solely for testing out transmissions, gearboxes, etc. To say nothing of their factories) or dealerships(there's like only 1 within 50 miles of where I live). They're also hemorrhaging money due to said breakneck expansion.
They do have an excellent PR however that's been able to convince enough investors(or donors, depending on your perspective) to keep dropping money on the company despite plenty of reports noting that they aren't really do very well.
That said, you could argue that Tesla has achieved it's goal of convincing people to want EVs, and other companies to start developing their own. I doubt Tesla will ever really break out of its status as a small time car company though, and it's overvalued stock may come to bite investors in the ass.
Slashdot users usually prefer to insist that a new thing is completely impossible and cannot be done until the thing is commoditized and ubiquitous, at which point they roll their eyes and declare it old news.
Your rocket is too small.
Ezekiel 23:20
Your best bet is to hit the Airliners.net or Pprune forum archives, lots of back story there.
The A380 issues were due to a mismatch between design software versions, resulting in wiring looms being the wrong size - the first few airframes built for development are always basically hand built with tonnes of design changes, but the production issues didn't become apparent until customer cabins were being installed as that meant a huge increase in wiring that needed to be installed. And that wiring simply didn't fit.
The 787 was pushed for a PR rollout on the 8th of July, 2007 - or 7/8/7 in US format. If you look at the photos taken at the time, the aircraft was a shell, despite it supposedly taking to the air later that year (you could see down the length of the cabin through the cockpit windows - there was *nothing* in there). The shell was also put together using fasteners from your local DIY store, not aviation grade ones - they all had to be removed and replaced prior to flight.
Then there was the aviation grade fasteners that were wrongly installed - this resulted in cracking, which had to be repaired, and those fasteners replaced.
And then the "side of body" issue, where the wing connection to the fuselage wasn't strong enough and had to be strengthened.
And the fire on the first aircraft which resulted in damage (specifically a hole in the fuselage).
And the fuselage barrels being delivered from suppliers which were misshapen and had to be reworked.
Boeing changed both the production method *and* technologies involved - moving from a "everything built in the factory on one location" to "fuselage barrels built in separate locations around the world, prestuffed with wiring and cabin outfittings, and simply joined by Boeing on an integration line", as well as moving from a normal aluminium based technology to a CFRP one. Boeing ended up having to buy most of the third party suppliers they had farmed work packages out to.
Diverted resources to Australia batteries? Though if bottlenecks unrelated to batteries then the Australia project might help use some idle capacity .
Wow, you surely showed that strawman what's what.
They did actually all of those targets in the past, just never on time. It's more like:
"Tesla reached their target several years too late"
Later... "Tesla reached their (other) target about a year too late"
Later... "Tesla reached their (other) target a month too late"
Even though they are now 80% below expectations in September, that simply corresponds to the expected output in August. I would say they're getting better.
In what world do you live in?
Tesla was late with the Roadster and had a slow rampup. (*Cue the doomsayers!*) .... then they ramped up and hit their production target, and everyone who ordered a Roadster got one.
Tesla was late with the Model S and had a somewhat slow rampup. (*Cue the doomsayers!*) .... then they ramped up and hit their production target, and everyone who ordered a Model S got one (and continues to).
Tesla was late with the Model X and had a very slow rampup. (*Cue the doomsayers!*) .... then they ramped up and hit their production target, and everyone who ordered a Model X got one (and continues to).
Tesla was moved the Model 3 launch date up significantly, and actually launched on time, but at present is one month late with the rampup. (*Cue the doomsayers!*)
This is pretty insignificant, for a number of reasons, and is the reason why TSLA isn't plunging today (as of time of writing, the pre-market has it down less than 2%, and I bet it'll close similar to or higher than it started, because there's a lot of bulls looking to buy on weakness). Mainly, though, everyone already knew this. Anyone who cares, at least. The vin number count has been low this past month. Articles had already discussed first a problem with welds that they had to go back and correct, and then later a problem with grounding bolts that they had to go back and correct. Normal production ramp stuff. The Q3 report mentions a couple parts in limiting supply as well, which again, while news, is normal production ramp stuff. Meanwhile, every other part will continue its rampup while the whips are cracked on that which are in short supply.
With most companies, there's not much public attention on rampup issues on new vehicle architectures; only investors generally care about it. Most companies also don't begin sales until rampup is already well underway. But obviously, Tesla is a different story. Overall, unless there's a serious design flaw or other issue with the parts that are in short supply or their production lines that mean it'll take many months to catch up, there's not much to this. For most people waiting for a Model 3, how many lines Tesla ultimately decides to open matters a lot more than how long it takes them to get the first line running right. Also, they're just making one specific configuration right now (LR, with PUP, without dual motor/air suspension). The rate at which the other configurations mature and their config-specific parts go into production also constrains most customers a lot more than this.
"If there was an antonym to 'Elon Musk', it would be 'Richard Branson'."
Except half a million waiting for a car with a 1 1/2 year waiting list - except for that, there's clearly no demand.
(Cue the "lots of people cancelled all at once" myth in 3, 2, 1....)
"If there was an antonym to 'Elon Musk', it would be 'Richard Branson'."
I wish this weren't actually the case. 20 years ago it wasn't the case, not sure when everyone became old curmudgeons.
It's almost as if there's some money being paid to write slam articles about certain companies who are either disruptive or successful, who are not also paying those same sources to write glowing fluff pieces. If we called it protection money...it would sound like the mafia. So let's call it marketing money. These companies don't need to pay the marketing money because their products sell themselves, so instead we write trash pieces.
Tesla makes excellent cars. All the rest of this is just stupid. If you paid your money for a pre-order, you probably knew that delivery was TBD if you were paying any attention at all.
How did you miss the fact that there have been deliveries going on for months? Did you not even read the headline, let alone the summary, let alone the article?
People with vehicles are already taking and posting videos, chatting on the Tesla forums, etc. And the general reaction is, although there's some features yet to come on the touchscreen (thank you, over-the-air updates!), the car is amazing. One person, when asked whether it was fun to drive, simply posted a picture of black sticky stuff splattered across their wheel wells with words along the lines of "That's not road tar ;)" and "I'll be lucky if these tires last 2000 miles"
The first delivery was 30 vehicles. The next month was supposed to be 100, then 300, then 1500. However, they're only up to around 250-ish, by the vin count. More and more people on the forums however, keep getting notified of their delivery dates, so it's exciting to watch :)
"If there was an antonym to 'Elon Musk', it would be 'Richard Branson'."
If you're going to be pedantic so will I. It depends on how the goal was defined. If I say "I'll do X, and I'll do within Y years", but end up managing to do X after Y+5 years, I've still met the goal of doing X.
Sorry, I was writing that while having some naan bread, rice pilaf and chai tea after a stop at the atm machine, and the LCD display was too dim for me to notice my erroneous mistake.
"If there was an antonym to 'Elon Musk', it would be 'Richard Branson'."
Heck, most people's delivery dates are a three-month window. Mine (Europe) is very nonspecific "late 2018" ;) It actually got moved forward from "early 2019" ;)
"If there was an antonym to 'Elon Musk', it would be 'Richard Branson'."
The difference now is that Tesla is trying something an order of magnitude bigger than they've ever done before - and they weren't very successful the previous attempts. And they are quickly burning their cash reserves in doing so. It's going to be a race to see if Tesla can get production ramped up before they need to sell a ton more bonds, massively dilute their shares - or go bankrupt.
Browsing at +1 - no ACs, I ignore their posts. So refreshing!
Nobody makes you burn out your tires. You don't have to drive with the pedal to the floor.
"If there was an antonym to 'Elon Musk', it would be 'Richard Branson'."
In our esteemed Slashdot colleague's homeland, orchards are an important part of the economy and relieve stress by making a healthy snack always at hand. Yes, you indeed had better get your grove in place, and you want the soil down packed (but not too much) so the roots for the newly planted trees can get established.
This is a tree analogy to a car, but Elon Musk had better heed that lesson.
Or, more politely than the AC:
The Model 3 has 2x dual-axis+click assignable steering wheel controls, designed so that for most tasks you never need to even take your hands off the wheel. As for the screen itself, first off, it responds to whatever you do at the wheel. To pick an example, while Model 3 has rain-sensing windshield wipers, if you flick the stalk for a single manual wipe, the wiper config options come up on the display. As for interaction with the display itself, the reason it's out on a stalk is to make it right in your peripheral view, and without any reaching required to interact. Your line of sight never has any need to go anywhere below "dashboard height", nor do your hands ever have to go more than slightly away from the wheel. The sheer size of the display means that all buttons on the screen are very large (don't need accurate presses, your finger can be way off without problems) and easily recognized in your peripheral view. More to the point, "common interactions" are on the left-hand side of the screen, making them even closer to your fingers and even more in your line of sight, with the upper left corner being the "prime real estate". The right hand side is used more for things like the nav and such. At the bottom are "always on" icons for various common features. Beyond the steering wheel controls and the screen, there's also voice commands.
Or, you can just believe that they never thought to try the vehicle out for usability.
"If there was an antonym to 'Elon Musk', it would be 'Richard Branson'."