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Analysts Expect Tesla To Miss Its First 2018 Model 3 Production Target (usnews.com)

Posted by BeauHD on from the slow-and-steady dept.

schwit1 shares a report from U.S. News & World Report: In October, Tesla reported that it produced 220 Model 3 vehicles in the third quarter. CEO Elon Musk had previously said the company would produce more than 1,600 Model 3s by September. Loup Ventures analyst Gene Munster isn't the only analyst to doubt Tesla's fourth-quarter Model 3 production. KeyBanc analyst Brad Erickson reduced his fourth-quarter Model 3 production target by two-thirds, cutting it from 15,000 to only 5,000. According to Munster, Tesla investors may need to wait several more quarters for the Model 3 story to play out. "We predict a breakout year for the Model 3 in 2019 which means, until then, other elements like solid Model S and X production numbers, increasing energy deployments like the South Australia installation, and future vehicles (Roadster, Semi, Model Y, and pickup truck) will stoke investor optimism," he says. schwit1 adds: "Elon Musk promised Tesla would produce 500,000 Model 3 sedans in 2018 and has accepted refundable $1,000 deposits on nearly that many. At current production rates, it will be years before pre-orders are filled. The Model 3's good will and good reviews won't matter much if Tesla can't ramp up production, which even bulls like Munster believes is running at least a year late."

10 of 120 comments (clear)

  1. Of Course by segedunum · · Score: 4, Interesting

    Ramping up production like this to the required volume is hugely capital intensive, even when you are just producing a single model, which is what they should be concentrating completely on. They will likely have to cut many corners, and given the build quality of many Model S and X cars they have already been doing so.

    The trouble is, the Model 3 is a mass market car that will need to work and need to be spot on in every respect. Those who would be looking to buy a Model 3 in the heavily competitive market it operates in are not Tesla fanboys who will cut them slack. It's a completely different ballgame.

    1. Re:Of Course by green1 · · Score: 4, Insightful

      Range even when using air con and heating, charging stations, the time it takes to charge versus filling up (whatever did happen to those quick replace batteries?), build quality, everything has to be spot on perfect.

      And here's one of the reasons Tesla is in a segment with zero competition, they're the only automaker that has actually figured that part out. And until another company comes along with an actual long-distance charging network of fast-chargers we're not going to see any actual competition to Tesla.

      As for what happened to quick replace batteries, the Tesla model S has them, and they ran a trial, nobody cared. Quick replace batteries have never been a good idea, they simply don't provide any benefit at all over a reasonable fast-charge Network, and add an awful lot of complications and expense. In fact the only reason Tesla did them at all was because California gave extra CARB credits for them at the time. Not because they were a good idea.

    2. Re:Of Course by green1 · · Score: 2

      There were no adhesives, it was simply nut and bolt. the real problem was that the battery shield had to come off (it was added to the car after the fast charge system was developed) which turned it in to a more manual process which took about 2-3 times as long as originally promised (of course it was still about the same speed as a gas fill-up)
      A few customer cars were battery swapped, but very few. The reason? not because it was slow or hard to do, but because the swap station was across the street from a fast-charger, and the fast charger was a better way to travel. Still is.

      Fast-charging beats battery swaps every single time. There's never a good reason to do battery swaps, and nobody who's ever driven an EV with a true fast charging option has ever actually wished for it. It was included simply because government bureaucrats who didn't even understand EVs let alone drive them on a regular basis thought it would be a neat idea and increased the CARB credits if a car could do it.

      Use the Tesla Supercharger network and I can guarantee you that you'll have no interest in battery swaps ever again. The logistics and expense just don't make any sense when your car can charge faster than you can eat your lunch, and get you far enough to make it to your next meal.

  2. In other news: water is wet. by green1 · · Score: 2

    Tesla hasn't met a timeline, target, or marketing promise in their entire career, why start now?

  3. Re:Underpromise, overdeliver by green1 · · Score: 2

    In the new world it's over promise, and rake in capital from investors. Delivery at all is an afterthought, and not really required if you can talk a good game.

  4. Difference is they produce real product by SuperKendall · · Score: 3, Insightful

    Tesla has survived until this day by missing just about every target they ever set and making pie-in-the-sky announcements to divert attention every time that happens.

    The thing about Tesla is, they have a track record of delivering.

    Yes they deliver really late. But that does not matter to the people investing in them and buying from them, because they have already baked in the understanding of these delays. When someone was waiting in line for a model 3, they knew it may well be years before they get the car. But they do not care, as long as it is eventually be delivered - and since Tesla is indeed producing model 3's, it eventually will be. That is enough.

    --
    "There is more worth loving than we have strength to love." - Brian Jay Stanley
  5. Re:Underpromise, overdeliver by green1 · · Score: 2

    You are WAY too charitable towards Tesla here..

    Tesla has been selling a full self driving option for over a year. Here's Musk's estimate of when the feature will be delivered to people who already paid and who are on 2-5 year leases:

    2015: in 2 years
    2016: in 2 years
    2017: in 3 years

    Why start in 2015? the 2014 and 2015 models were promised to have all sorts of driver assist features that not only do they not have, they will obviously never have, and Tesla refuses to even admit they promised despite images of their website and video recordings of the media event where they announced them. Full self driving on the 3 isn't "2-3 years away" even accounting for "Tesla time", it's NEVER on these cars. There is absolutely ZERO chance that these cars will ever have full self driving capability with the current hardware. It's simply not possible, they have no corner or rear radar or lidar, and rely 100% on cameras, only one of which has a method of clearing debris (an ineffective method at that) Full self driving needs the ability to see around a dirt spec on your windshield, the cameras on Tesla vehicles can't do that.

    The absolute best case scenario for Tesla is that the "full self driving" feature manages to do what they promised at the "D" event for cars sold in 2014 with the original Autopilot, promises they have since tried to pretend they never even made.

    They make great cars, but really over-promise.

    That's the understatement of the century. I say "they make the best car available, but lie through their teeth about it and are the slimiest company I have ever done business with"

  6. I'll just reiterate what I have said before by bravecanadian · · Score: 2

    Tesla is most likely not going to survive as an independent car maker.

    Maybe they'll make it as a niche luxury brand, but unless the miraculously start producing, they are going to be crushed by the real carmakers.

    All the majors have EVs and hybrids on the way, and they can actually build them across the globe and in large quantities.

    I think they are going to be bought up after their stock crashes, or turn into a battery company. Making money on cars is a very tough business.

    1. Re:I'll just reiterate what I have said before by drinkypoo · · Score: 2

      As for the competitiveness, well EV is pretty much a battery pack with wheels

      The unibody is harder to get right and costs more than the battery pack, so no. No it is not.

      --
      "You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
    2. Re:I'll just reiterate what I have said before by srichard25 · · Score: 2

      The major car manufacturers don't seem to WANT to play in this specific space. Sure, each of them have a token EV. But they are mostly ugly and slow and don't sell extremely well. Nobody other than Tesla seems to want to make an EV that is fast, fun and looks nice. Maybe the majors don't make as much money on maintenance of EVs and that's why they don't want to play in that space.