Tesla Is Making Over 2,000 Model 3s a Week, Falling Just Short of Its Goal (theverge.com)

According to an email from Elon Musk, Tesla has increased its production of its mass-market electric Model 3 to over 2,000 units per week. "It's an impressive ramp up of production, but it still falls short of Musk's goal of 2,500 Model 3s per week by the end of the first quarter of 2018," reports The Verge. From the report: In the companywide email (which was obtained by Jalopnik, Electrek, and Autonocast host Ed Niedermeyer), Musk sounds a celebratory note on the 2,000-vehicle per week benchmark, while ignoring the larger issue of missed deadlines: "It has been extremely difficult to pass the 2,000 cars per week rate for Model 3, but we are finally there. If things go as planned today, we will comfortably exceed that number over a seven-day period! Moreover, the whole Tesla production system is now on a firm foundation for that output, which means we should be able to exceed a combined Model S, X, and 3 production rate of 4,000 vehicles per week and climbing rapidly. This is already double the pace of 2017! By the end of this year, I believe we will be producing vehicles at least four times faster than last year." With Q1 now behind us, we can expect to see Tesla report its official production numbers to investors sometime this week.

Comments

Over promise

[phalse phace]

under deliver.

Re:Over promise

[Anonymous Coward]

The only got that number by shutting down model s and x production. There are no where even close to meeting their production goals. Not that it matters on 30% of reservations are turning into actual sales.

Re:Over promise

[Rei]

S and X production were only down for one day. Lines have to go down periodically regardless; tooling does not last forever, even if you're not doing upgrades.

Re:Over promise

[Anonymous Coward]

Why do they bother with battery’s when musketeers spin could power their cars.

Re:Over promise

[Rei]

Welcome to Bear World, where pointing out facts is "spin".

The only reporting that described people from the S and X lines working on the 3 line described it as a 1-day downtime.

Re:Over promise

[Anonymous Coward]

So its harder to mass produce cars than everyone might like to imagine it is.

Every other car maker thats in existence today has been around for decades and has had decades to tune their processes and supply chains.

Re:Over promise

[Rei]

Meanwhile, Tesla produced its first 10k Model 3s in the time it took GM to produce its first 1000 Bolts. I guess that's that "decades to tune their processes and supply chains" they had going for them, eh? And it costs Tesla $10k less per vehicle.

Re:Over promise

[LynnwoodRooster]

Toolings typically last for hundreds of thousands, if not millions of operations. Tesla should still be on its first toolings UNLESS they've redesigned parts, forcing tooling changes or new tools altogether.

Re:Over promise

[haruchai]

S and X production were only down for one day. Lines have to go down periodically regardless; tooling does not last forever, even if you're not doing upgrades.

If they're reaching the 2000/wk mark with 2 shifts, not much overtime, solid build quality with minimal reworking, and can sustain it across several weeks, then this is a real milestone. Otherwise, they've still got a ways to go and much to learn.
The above may sound like a tall order but it's what established automakers do by the 10s of 1000s - or more - every week.

Re:Over promise

[Anonymous Coward]

Toolings typically last for hundreds of thousands, if not millions of operations. Tesla should still be on its first toolings UNLESS they've redesigned parts, forcing tooling changes or new tools altogether.

Yes, the tool lasts that long. Of course it never needs to be sharpened, or never chips, or rebuilt, or damaged, or, or, or, or, or

Re:Over promise

[Rei]

What "moving the goalposts"? Even with their delays, they brought a new EV to market in higher volumes faster than GM. So where's your "the big automakers are going to teach upstart Tesla a lesson" coming from? If they're so good at making EVs, well, why don't they? Why is it that Tesla, even with half a year of delays, can tool a brand new line and churn out EVs faster than them?

Give it 5 years. The traditional, old school makers will put Tesla out of business.

Exact same line we've been hearing for the past ten years. Meanwhile, Tesla sells more nearly-six-figure-average vehicles in the US than its closest EV competitors sell econoboxes to a vastly larger customer base and half a million people are waiting on the Model 3, a vehicle designed to - like the S and X - turn a profit 25% margin.

Did you ever stop and think that maybe, just maybe, the ability to make a good, affordable EV doesn't just get magicked into existence because you're a "big automaker", that you actually have to invest billions of dollars a year in research and infrastructure to make it happen? Did you ever stop and think that the reason that the big automakers haven't pushed harder on EVs is because they don't want to, because they're all tooled up and researched to build ICEs?

Re:Over promise

[Anonymous Coward]

Toolings typically last for hundreds of thousands, if not millions of operations. Tesla should still be on its first toolings UNLESS they've redesigned parts, forcing tooling changes or new tools altogether.

Yes, the tool lasts that long. Of course it never needs to be sharpened, or never chips, or rebuilt, or damaged, or, or, or, or, or

As someone who has worked in a factory, it is normal to change tools very regularly, so as to not make bad parts that need rework or scrapping.
Do you actually think a drill or a tap can just run forever?
And those are quite good compared to an endmill, to say nothing of a facemill.

I'm not sure what sort of tooling is required for building a Tesla, but even a drill needs to be changed, and I'd be surprised if at least something wasn't tapped.

Re:Over promise

[haruchai]

Meanwhile, Tesla produced its first 10k Model 3s in the time it took GM to produce its first 1000 Bolts. I guess that's that "decades to tune their processes and supply chains" they had going for them, eh? And it costs Tesla $10k less per vehicle.

I wouldn't put too much faith in that. Tesla 25% margin is not plausible even for their higher-end cars except perhaps the Performance trims. As for the Bolt, a car that I wouldn't buy unless it were 1/2 the MSRP, GM is mostly selling them for the EV credits. But they do have the facilities, manpower and skillsets to turn up the production as needed.
Ford, for example, converted their largest NorthAm truck factory to aluminum production of their flagship F-150 in only 8-10 weeks and by mid-November were producing 1400 per DAY at the new plant.
https://www.popularmechanics.c...

That's a "machine-that-builds-the-machine" that Tesla can still only dream of building.

Re:Over promise

[Anonymous Coward]

Toolings typically last for hundreds of thousands, if not millions of operations. Tesla should still be on its first toolings UNLESS they've redesigned parts, forcing tooling changes or new tools altogether.

Millions of operations?
You're either completely clueless, or insane.
Even hundreds of thousands is simply not going to happen. I'm struggling to think of any sort of tooling used in a factory that could somehow last that long.

Re:Over promise

[Rei]

I wouldn't put too much faith in that. Tesla 25% margin is not plausible even for their higher-end cars except perhaps the Performance trims

So you're saying that Tesla has been lying to the SEC for years? The average margin on S and X was 25%. Their overall automotive margin is down to 18% now because of the problems with the 3 dragging down their average, but that's to be expected; you can't have a line designed for 5000/wk running at a fraction of that and still expect to get your design profit margin.

Ford, for example, converted their largest NorthAm truck factory to aluminum production of their flagship F-150 in only 8-10 weeks

From your link:

was a four-year process that involved no shortage of nail chewing, because to pull it off required, essentially, building an entirely new factory where a perfectly good one was already standing

Four. Years. The line downtime was 8-10 weeks, but it took four years to tool up.

Re:Over promise

[Mr D from 63]

The exact words from the communication were; "If things go as planned today, we will comfortably exceed that number over a seven-day period!”. So it sounds like they had not done it yet. What remains to be seen is if they have sustainable production at that level yet. It will be interesting to hear what they officially report.

If they hit above 2,000 per week sustainable, it will quieten the critics. But they'll need to show a steady ramp up going forward to keep them quiet.

Re:Over promise

[Anonymous Coward]

Don't worry, everyone will scramble to justify it or spin it into some kind of positive.

Re:Over promise

[Anonymous Coward]

Toolings typically last for hundreds of thousands, if not millions of operations. Tesla should still be on its first toolings UNLESS they've redesigned parts, forcing tooling changes or new tools altogether.

Yes, the tool lasts that long. Of course it never needs to be sharpened, or never chips, or rebuilt, or damaged, or, or, or, or, or

None of that comes under the category of retooling, that is just standard maintenance and repairs.

Re:Over promise

[Anonymous Coward]

Meanwhile, Tesla produced its first 10k Model 3s in the time it took GM to produce its first 1000 Bolts. I guess that's that "decades to tune their processes and supply chains" they had going for them, eh? And it costs Tesla $10k less per vehicle.

Wow. You are kidding right? GM never planned to ramp up production like Tesla, and never made claim as such. Did you know GM uses the same production line for another car as well? Let's see Tesla pull that off on a new line.

As for the cost numbers from the article you cite, they are based on Tesla's 'claims'. But Tesla has been known to leave capital cost out of their stated costs. They are just guessing at the costs overall.

Re:Over promise

[Anonymous Coward]

Tesla production performance vs Musk's states performance targets.

http://www.coyoteblog.com/wp-content/uploads/2018/03/999x-999.png

Re:Over promise

[Anonymous Coward]

Depends on the operation. I've run tooling that has lasted millions of cycles needing nothing more than maintenance (sharpening/cleaning) and only done once quality is affected.

It all depends on the material, the operation and the cycle rate.

Re:Over promise

[Rei]

1) I don't know why you linked to a blog when you can get that graph (up to date) straight from the Bloomberg site.
2) That's actually a terrible graph from Bloomberg, since those are supposed to be S curves, not straight lines (aka, starting out slower, then speeding up).
3) Go further back.

Re:Over promise

[Rei]

*Swoon*! Oh you spoony bard - I am vanquished.

I shall retreat for the evening and drown my sorrows with Teslaquilla.

(Rei has left the party)

Re:Over promise

[Mr D from 63]

Meanwhile, Tesla produced its first 10k Model 3s in the time it took GM to produce its first 1000 Bolts. I guess that's that "decades to tune their processes and supply chains" they had going for them, eh? And it costs Tesla $10k less per vehicle.

I wouldn't put too much faith in that. Tesla 25% margin is not plausible even for their higher-end cars except perhaps the Performance trims. As for the Bolt, a car that I wouldn't buy unless it were 1/2 the MSRP, GM is mostly selling them for the EV credits. But they do have the facilities, manpower and skillsets to turn up the production as needed. Ford, for example, converted their largest NorthAm truck factory to aluminum production of their flagship F-150 in only 8-10 weeks and by mid-November were producing 1400 per DAY at the new plant. https://www.popularmechanics.c...

That's a "machine-that-builds-the-machine" that Tesla can still only dream of building.

The Bolt comes off a line that also produces the Sonic. They produce two Sonics for every Bolt, so the production of that line is three times Bolt production. CM has a different model.

Re:Over promise

[Anonymous Coward]

If you're going to write "battery's", why don't you also write muskeeteer's, or car's?

What is it with you semi-literate types and your fear of plurals? One battery, several batteries. That's it. That's all.

No motherfucking apostrophe!

Re:Over promise

[Mr D from 63]

>So you're saying that Tesla has been lying to the SEC for years?

There are various accounting methods to state cost. That should be considered when comparing between two companies. They may or may not include certain overhead or capital costs. They would naturally have to claim them elsewhere.

Re:Over promise

[HornWumpus]

To be fair. one day down isn't generally 'retooling' either. Even with planning and staging.

Re:Over promise

[Anonymous Coward]

LOL

Re:Over promise

[haruchai]

1) I don't know why you linked to a blog when you can get that graph (up to date) straight from the Bloomberg site.
2) That's actually a terrible graph from Bloomberg, since those are supposed to be S curves, not straight lines (aka, starting out slower, then speeding up).
3) Go further back.

That S-curve or "stepped exponential" as Elon also referred to it, got scaled back quite dramatically.
In the dim & misty past known as August 2017, he said quite emphatically
“What people should absolutely have zero concern about, and I mean 0, is that Tesla will achieve a 10,000 unit production week by the end of next year. [] I think people should really not have any concerns that we won’t reach that outcome from a production rate.”
"https://electrek.co/2017/08/03/tesla-model-3-elon-musk-production-reservations/"

I don't hear that 10k/wk number bandied about any more by anyone at Tesla.

Re:Over promise

[Anonymous Coward]

They don't have to lie to the SEC, margin is a very "flexible" word, you can redistribute costs quite easily to other parts of the business. when you hear any manufacturer use those words you need to take them with a grain of salt and understand the current market, PR and financial pressures they are under.

Re:Over promise

[Applehu Akbar]

Does REI stand for 'Reeks of Elon's Intestines"?

I've never seen a poster so in the tank for any company or person.

Versus a bunch of no-account ACs, who have no real idea why they hate Musk, it's just a reason to make up fake stats.

Re:Over promise

[Anonymous Coward]

Fuck off Rei.
You think logging in another account will purge your stench?

Re:Over promise

[haruchai]

"So you're saying that Tesla has been lying to the SEC for years? The average margin on S and X was 25%. Their overall automotive margin is down to 18% now because of the problems with the 3 dragging down their average, but that's to be expected"

I know a few folks who know quite a bit about automaking including an old fogey who worked at Fremont decades ago both before & after it became NUMMI.
He's says there's no way Tesla's overall margins are that high. But even if they are, their R&D costs relative to their revenue is much higher than the competition.

https://seekingalpha.com/artic...

"Four. Years. The line downtime was 8-10 weeks, but it took four years to tool up"

No it didn't. The total time including planning may have been years because Ford didn't dare screw up their cash cow. After converting Dearborn, they pulled off the same feat 6 months later in Kansas City.
By the way, the reported numbers of employees at Dearborn and Kansas City are ~8000 combined and produce 800000 trucks annually. Tesla Fremont has 10k employees and has yet to surpass 100k.

Re:Over promise

[goose-incarnated]

The only thing that matters is whether Tesla can meet their numbers before their money runs out. We all know that they'll hit their targets eventually, but if they run out of money and can't raise any more then it doesn't matter if they hit their targets next quarter because they'll already be out of business.

Personally I'll wait and see, but I have to admit it isn't looking good for them - the last time they sold stock it turned to junk bonds immediately.

Re: Over promise

[c6gunner]

Did you ever stop and think that the reason that the big automakers haven't pushed harder on EVs is because they don't want to, because they're all tooled up and researched to build ICEs?

I think this was precisely his point; if they wanted to, and were willing to cut down on their ICE production, they could pump out enough EVs to eclipse Tesla overnight. (whether those EVs would be as good as Tesla's designs is a different question)

The two of you seem to be in violent agreement.

Re:Over promise

[rtb61]

Well, yeah, everyone knows exactly where the Tesla attacks are coming from. The big automakers advertising departments via ad buys, stories as ads. Especially those eyeing to buy a discounted Tesla. Why develop your own, when you PR department can work with advertisers to target that upstart competitor, try to attack it's credit line and FUD the investors and then buy on discount, all that development work and product line.

So the big makers produce more, out of how many factories, in how many countries and who had to sell of the parts of themselves that they bought, to stave off bankruptcy, even when rescued at tax payer expense.

This without new direct competition out of China and India heating up. There is a idea, to increase production perhaps Tesla should consider a partnership with a automotive company in China, for much, much, much, higher levels of production for regular consumer level entry into the all electric market. So upper end manufacture in the US and more main stream manufacture in China, not necessarily even for the US market, more the international market. Investment would be minimal, Tesla providing the expertise and the China partner supplying the manufacturing, with Tesla supervising quality of production for a base model 3i (i for international).

Re:Over promise

[whoever57]

Well, yeah, everyone knows exactly where the Tesla attacks are coming from. The big automakers advertising departments via ad buys, stories as ads.

There are also some large funds that have sold TSLA short. They are overtly involved in the attacks on Tesla.

Re:Over promise

[Uberbah]

Except Tesla has been "running out of money" because they've invested profits plus investor money in the business. They aren't sitting around spending billions on bleaching Elon's asshole, they could stop at any time and just focus on what they already have.

Re:Over promise

[goose-incarnated]

Except Tesla has been "running out of money" because they've invested profits plus investor money in the business.

Irrelevant. It doesn't matter what they've been spending their money on if they are unable to pay their bills.

they could stop at any time and just focus on what they already have.

It's too late for that - they've already stopped the capital investment, for over a year already, which is why I said that they need to make enough revenue to meet their costs.

In order to do that they have to hit their targets for both production and sales. Sales doesn't look like a problem, what with people lining up to buy their product, but production appeared to be a problem. If they make enough cars they'll get enough revenue to meet their bills.

If they don't hit certain production numbers they are going to have to raise money (again) via investors or go bankrupt and let their creditors tear them apart.

Re:Over promise

[Anonymous Coward]

Except Tesla has been "running out of money" because they've invested profits plus investor money in the business. They aren't sitting around spending billions on bleaching Elon's asshole, they could stop at any time and just focus on what they already have.

It doesn't matter why you are bankrupt only that you are bankrupt. Tesla has a pile of debt and it is growing, this means more money is more expensive for them and eventually this reaches a point where investors/bankers etc say "sorry the risk is too high, we are calling in your debts"

Re:Over promise

[Anonymous Coward]

Can you math? Because in My country they teach 2,000 x 52 is more than 100,000.

Re: Over promise

[WindBourne]

What is really being missed, is that GM had 1,000 cars done at 9 months. Tesla is over 10,000. In addition, this line is going to scale rather rapidly after this, and should have same quality .

Re: Over promise

[WindBourne]

Same thing were said of Toyota in 1969.

Re:Over promise

[BadDreamer]

Having worked a lot with installing factory automation, I can actually parse what is stated in that article. The four years were not spent planning, but actually building the replacement factory content.

That is how installing factory assembly lines work. They are built offsite, one sub-assembly line at the time, complete with SAT acceptance, and then moved to the factory and installed and tested there.

That is what the article explains. They spent four years speccing and building sub-assembly lines, and then budgeted 8 weeks to remove the old assembly line and get the new ones running. Which is a crazy schedule, which they almost managed to keep - which is amazing.

But no, they did not shift over production in 8-10 weeks total implementation time. The new factory already existed at the start of those 8 weeks, only spread out at the integrator sites.

Re:Over promise

[Anonymous Coward]

Tesla should consider a partnership with a automotive company in China, for much, much, much, higher levels of production for regular consumer level entry into the all electric market

The day they do this, they will be toast. China will eat their production effort, and they will turn into a brand corporation, just like the big ones. One day they will wake up and find their brand is not better appreciated than the lattest Korean builder, and the dream will be over.
If they want to learn how to grow up, hire talent. And put them to do things. Actual things, not spreadsheet engineering.

Re: Over promise

[Anonymous Coward]

They are not being asked to cut down ICE production - unless people buy less ICE and that hasn't happened yet.

However, you'd expect these big automakers to be able to make EVs in any number (as long as they sell) easier than Tesla. Even if the electric drivetrain is 'new' to them, the bodywork, brakes, etc. is not. Te rest of the car is the same old thing they know - unlike Tesla who also had to learn to make the parts not specific to electric cars. Not only to design & make them, but mass-produce efficiently.

A few are making EVs now - BMW, Nissan & Hyundai springs to mind. Most don't - and that can only be because they don't want to or don't dare.

Re:Over promise

[Tom]

Nobody sane goes to China with new tech. They will be happy to cooperate with you. One year later, an almost identical car from an almost identical factory in a different city will hit the market. That factory will be owned by your cooperation partner. But unlike your joint factory, only by them. In fact, they'll not even tell you that the other factory exists, despite if you were put in either one without being told which one it is, you wouldn't be able to tell the difference.

Tall story? Happened to Mercedes Benz.

Re:Over promise

[LynnwoodRooster]

Then you've never actually built anything, have you? Most injection molds made from from hardened steel will flow hundreds of thousands to millions of shots. It's quite common in consumer electronics to do that; for example, when i worked at SONOS they used to regularly get 2.5MM shots from a plastic tool before redoing it. Steel stamps can last just as long, for one product I do I regularly get 750K stamps out of a forge tool, pressing 12mm thick 1008 steel plate (disc shape, 83mm ID/175mm OD). Of course, when you're making 400-500K units a month, you need that kind of longevity; most big-volume manufacturing doesn't have the luxury of only doing 2K units per week...

Re:Over promise

[LynnwoodRooster]

Sharpening, rebuilding, cleaning a tool is a few day job at most; cutting a new tool is typically 40-50 days (or longer, if it's a large sheet metal press process). Tools will last quite a long time, and if your tooling lifetime is impacting your ability to make product - then you're either using the wrong process, have a crappy tool engineer - or both. And yes, products I've personally designed ship in the 500K+ per month range individually (collectively, somewhere around 4MM per month).

Re:Over promise

[amalcolm]

Clearly you are not a greengrocer

Re:Over promise

[LynnwoodRooster]

FYI - BASF has a good overview on this, and what's typical for plastic mold toolings that run 1MM+ lifespans. Think about it - if a tool lasted 100K shots or so, and you're making 10MM+ parts a month (like some of the consumer electronics products out there, or even automotive like relay bodies and such), you'd go through 100 tools a MONTH. Given a typical 30-40 day lead-time to cut, polish, dial-in, and harden a tool, you'd need upwards of 4000 days of work per month just to keep the product rolling. That's a very large tool shop that is 100% dedicated to just that part.

One transducer I designed is used for a major headphone company. It uses a plastic frame. They shoot about 6MM units a month with it, and the tool typically is replaced every other month (8 cavity tool). They get about 1.5MM shots from that single tool. Tooling life that is under 1MM for a hardened tool is really indicative of either the wrong process OR a bad tool design.

Re:Over promise

[Barsteward]

and Land Rover

Re:Over promise

[LynnwoodRooster]

Everyone here talks about how much more complex an IC vehicle is compared to an electric vehicle, because of all the extra parts in the motor, gear drive, etc. Note that in one month - December 2017 - Ford produced about 9 TIMES more F-150s than the first 10K Model 3s. And that is just ONE model of vehicle from a smallish auto maker.

Re:Over promise

[Barsteward]

Not really, Rei just doesn;t put up with cr*p from anti-tesla trolls and tries to educate you at the same time.

Re:Over promise

[LynnwoodRooster]

a vehicle designed to - like the S and X - turn a profit 25% margin

Designed to turn a profit, sure - who doesn't design to turn a profit? The problem is, Tesla has had exactly ONE profitable quarter in the last 5 years, and that was when the booked all the pre-order sales for the Model 3. Historically, they're running about a -13% profit margin. That's the fact - unless you have actual, GAAP numbers that say otherwise?

Re: Over promise

[LynnwoodRooster]

Or the market simply does not support the demand for that many full EVs. Hybrids seem to be catching on left-and-right, especially here in China (where I am right now), but pure EVs are still lagging - presumably because of the charging and range issues.

Re:Over promise

[LynnwoodRooster]

I wouldn't put too much faith in that. Tesla 25% margin is not plausible even for their higher-end cars except perhaps the Performance trims

So you're saying that Tesla has been lying to the SEC for years? The average margin on S and X was 25%. Their overall automotive margin is down to 18%

Those are lies, Rei - plain and simple. I've called you on them before and you still spout them. The reality is that Tesla has had exactly ONE profitable quarter in the last 5 years (when they booked the Model 3 preorder income), and average about a -13% loss. That's straight from the GAAP numbers from their annual reports. If you have other numbers - put them up.

Re:Over promise

[LynnwoodRooster]

Telsa has yet to actually BUILD 100K model 3s. Elon says they can finally deliver at that rate - but it's not been seen yet (his weasel words "If things go as planned today" actually hint that they may not hit that rate).

Re:Over promise

[Hognoxious]

I saw that on the news. IIRC the knock-off factory isn't even in another city like GP said - it's just round the corner.

Pretty convenient. If they run out of parts they can just get their mole to chuck some over the fence.

Re:Over promise

[Rei]

It's too late for that - they've already stopped the capital investment, for over a year already,

Tesla spent, $1,7B on R&D last quarter alone. And capital investment at both Fremont and Gigafactories 1 and 2 continue, and the Supercharger network is expanding faster than it ever has (just in the past week work has started on the Trans-Canada highway and the North Dakota gap)

If they don't hit certain production numbers they are going to have to raise money (again) via investors or go bankrupt and let their creditors tear them apart.

Read this.

Re:Over promise

[jeremyp]

2,000 a week is 104,000 a year which is well short of their targets. At one point, Elon Musk was talking about doing 500,000 a year which is clearly still way out of reach. Even 200,000 a year (not enough to clear the order backlog in a year) looks unattainable right now.

So, no, it will not keep the critics quiet.

Re: Over promise

[jeremyp]

General Motors makes around 10 million cars per year. The difference between 1,000 cars and 10,000 cars is about a single shift for them.

Re:Over promise

[Anonymous Coward]

Well, at least Tesla (under)delivers a whole lot more electric vehicles than the "big automobile producers" do who rarely venture beyond the "concept cars" displayed at automobile fairs but never actually going to market.

The turnaround times from "fiction" to "product" on Tesla may not match their hype all the time but they crank out a whole lot more tangible and marketable innovation per revenue than basically everybody else.

Re:Over promise

[Rei]

Learn the difference between margins and profits. Thanks.

Re:Over promise

[Rei]

Ed: year, not quarter. Shuold prorfraed betur :P

Re:Over promise

[bgarcia]

Rei is talking about each car sold turning a profit, and that is correct. The cars are revenue positive, with margins that other automakers are jealous of.

You're talking about the profitability of the entire company. And you're conveniently ignoring the fact that Tesla is in growth mode. They're buying infrastructure for building a half-million cars per year. They're designing several new vehicles to bring to production in the next two years (A semi-truck, a new roadster, a small SUV, and a pickup truck, to name just a few). I don't expect the company itself to turn a profit until they've filled out their product portfolio.

Re:Over promise

[Anonymous Coward]

Oh for fuck's sake, no they won't. They haven't yet, because they can't. Experience building ICE cars does not translate over 100% to building BEV cars. They don't have the materials contracts, they don't have supply chain (most importantly battery supply in sufficient volume), and they don't even have the will to try very hard at the moment. Tesla is right on the verge of becoming too stable of a company for them to squash, and in 5 years Tesla will definitely be too successful to get rid of. Some of the old ICE brands are not going to make it. You're also missing the giant point that Tesla is not a car company. It's a battery company that happens to sell many of them on 4 wheels. The traditional car corps are going to have a hard time competing with that over the long term.

Re: Over promise

[bgarcia]

It's lagging because the legacy automakers are still creating EVs that look like econo-boxes, and nobody wants to pay luxury-car prices to end up with a Nissan Versa competitor. Tesla doesn't make econo-boxes, and the sales of the S and X are actually greater than other popular combustion vehicles in their class.

Re:Over promise

[jabuzz]

Sure but even if Tesla where churning out 10k Model 3's a month then they don't need tooling that lasts for millions especially if there is a possibility of a part redesign in the interim.

The entirely rational thing might be to go with cheap tooling that only lasts for 10k (which would have been good for at least six months up till now) and you are sure it's not going to be changed before buying the expensive tooling that lasts for millions.

Re: Over promise

[LynnwoodRooster]

Mercedes E class outsold Tesla S, and I believe Audi A6 and A8 did the same as well. BMW's luxury series - 5/6/7 sedans - outsold the Tesla S (note that BMW splits up their "high end" models into 3, whilst Tesla has a single model - compare luxury-to-luxury would be the 5/6/7 versus the S). MOST cars sold - IC or EV - are econoboxes for a reason - most people don't want to dump that much money into a vehicle. Looking at ALL new passenger vehicles sold in the US (cars and trucks), the average is around $36K - about half that of the entry-level Model S. And for every new car sold, there are about 2 used cars sold - and they average around $17K. The Model 3 MAY make a dent, but it starts at the average new price, and is really well out of the average price most people want to pay (about $24K, between new and used).

Re:Over promise

[LynnwoodRooster]

Where's the numbers? I posted my link - the margin is negative when you use actual, real GAAP numbers. ANYONE can claim a product "makes profit" if you discount massive amounts of overhead and expenses required to make that product... Blow away infrastructure, marketing, NRE, tooling, pensions/stock options, and you can make anything look good! The reality is, though - you cannot do that. At least per GAAP. That's called fudging the books, and Tesla got into a lot of hot water over that, a few years ago. And so now they report the truth - and the truth is that they lose money on every car they sell.

Re:Over promise

[LynnwoodRooster]

Standard practices is to do soft tooling first, especially at proto stages. THEN you do a hard tool so you can hold a tighter tolerance, reduce wear and tear on the tool, etc. over time. The cost differential is about 20-30%. Unless you mean that Tesla is shipping with soft-tooled parts? With consumer electronics, you typically do soft tools for prototype and EVT stages, sometimes for DVT (mostly hard tools for DVT), and hard tools for PVT and mass production - because it gives you the best insight into long-term production tolerances you'll get from your process and thus informs what your product will do over time.

Re:Over promise

[Anonymous Coward]

Yes but he was directly comparing the rate not the total.

Re:Over promise

[Anonymous Coward]

You obviously know what you're talking about.

What are your thoughts on AvE?

I always wonder where he got his experience...

Re:Over promise

[Rei]

Read.

Gross margin = Gross profits / sales = historically around 25%, down a bit recently due to Model 3 production issues Your graph is operating margin, which is EBIT/sales. EBIT = gross profits - operating expenses (SGA, etc) - non-operating income + interest. In 2017, gross profit for TSLA was $2,2B, SGA was $2,5B, and R&D was $1,4B, yielding a net loss of $1,6B (plus everything else = -$2B). But a gross margin around 25% is quite solid for the auto industry. Tesla ran a negative not because of negative automotive margins, but because 1) SGA is scaled up to the size Tesla is actively growing to, not to the company's current sales, and 2) likewise for the R&D budget. Which are both exactly what you want to see in a rapidly growing company. None of Tesla's investors want to see them sit back on their laurels right now and live off of S and X; the point of investing in Tesla is to have a stake in a company that's transforming the automotive market. And that requires rapid scaleup. Gross margins prove the economic case for your products; operating margins remain negative until you've grown large.

Re: Over promise

[Anonymous Coward]

They are not being asked to cut down ICE production - unless people buy less ICE and that hasn't happened yet.

However, you'd expect these big automakers to be able to make EVs in any number (as long as they sell) easier than Tesla. Even if the electric drivetrain is 'new' to them, the bodywork, brakes, etc. is not. Te rest of the car is the same old thing they know - unlike Tesla who also had to learn to make the parts not specific to electric cars. Not only to design & make them, but mass-produce efficiently.

A few are making EVs now - BMW, Nissan & Hyundai springs to mind. Most don't - and that can only be because they don't want to or don't dare.

The chassis is perhaps the most critical and time-consuming component and it's not as simple as just throwing batteries in the trunk and calling it a day, not unless you absolutely don't care about the weight distribution and handling dynamics. Just about any existing chassis is going to need some significant reengineering to be repurposed for an EV.

Re:Over promise

[MachineShedFred]

They're not done increasing production. The stated (revised) goals were 2500/week by the end of Q1, and 5000/week by the end of Q2.

Whether they can do that or not is the question. Breaking 2000/week goes a bit of distance to show progress in comparison to the doom and gloom stories we're seeing from the hedge fund whore financial press.

Re:Over promise

[Anonymous Coward]

The 30% turning into final sales might be because of the lack of options that people want. Anecdotally, my friend got approved for his Model 3 order and he chose to delay it because they still don't have the dual motor option available. Here in Canada that's what you want in the Snow. Rear wheel drive doesn't work so well on most cars when it's icy. Every other Canadian Tesla pre-order'er he knows is doing the same thing. Tesla told him June (or August I forget which, but I think June) is when that option is going to become available. Waiting a few months longer isn't that much of a big deal. (He still has his Model S and Volt to get him around in the mean time)

Re:Over promise

[Anonymous Coward]

Yeah, because Ford/GM/Chrysler have shitloads of experience with manufacturing battery packs suitable for an EV at volume.

No, wait, practically nobody except Tesla / Panasonic does.

Re: Over promise

[Anonymous Coward]

What automaker makes their own brakes and such commodity components? They all buy them from companies that make brake calipers, pads, rotors, etc. by the thousands and bolt them on in the assembly line.

Why would Tesla feel the need to manufacture every single part that goes into their cars? That assumption is patently ridiculous, especially since they just announced a recall on some bolts made by Bosch...

Re:Over promise

[Anonymous Coward]

When talking about Tesla (or really anything else), never quote "seekingalpha" as any kind of authoritative source - it's crowdsourced "news" that is replete with "articles" that are written by people that can and do hold positions on the stocks they are talking about. They are filled with cherry-picked "facts" and assumptions that ignore massive parts of reality so they can try to get more lemmings to take their position and pay off their gambles.

If the shorters are able to write the news that for some reason always appears at the top of Google News, don't you think that may skew impressions and bias?

Re:Over promise

[MachineShedFred]

Your graph shows quarterly profits / loss, which factors in all non-capEx business costs (EBITDA). This is sometimes referred to as profit margin.

He is talking about product margin, which is the percentage of profit over sale price on a per-product basis.

The two are not equal, and the terms are being confused. Profit margin is a totaling of all product margins, plus some other calculations that don't have anything to do with actually producing products for sale - various regulatory overhead, one time costs, debt servicing, etc.

Here is why the distinction is important: The cost to manufacture and deliver a Model S to a customer in Virginia has the square root of jack shit to do with the cost of installing a retrofit PV system on a roof in Nevada. Your chart would include both since November 2016 when Tesla and SolarCity merged, where product margin would be calculated separately for each. But the product margins on both of these business activities is different, and just a component of the profit margin of the business as a whole.

In the context of these posts, it's easy to confuse the two because terminology is being thrown around with reckless abandon and vagueness.

As an aside, why would you have this graph linked in your signature? Are you enough of a Tesla hater that you have to show this information in every single post you make, regardless of if it has anything to do with Tesla or not?

Re: Over promise

[be951]

Or the market simply does not support the demand for that many full EVs.

But somehow, half a million people not only signed up to get on the waiting list for a Model 3, but put down $1000 to do so (in a time when nearly half of Americans could not pay for an unexpected $400 expense), even knowing it would be more than a year and probably more than two before they'd get it. Nah, it's not lack of demand. If another automaker could produce an EV with a similar feature set and price point to the Model 3, they could probably sell them as fast as they could make them.

But maybe Tesla is a unique case, between having the best range by a significant margin (until the Bolt came along, nearly double anyone else), the supercharger network, plus an advanced driver assist (aka autopilot), maybe it is a mistake to think of it as just an EV.

Hybrids seem to be catching on left-and-right, ... but pure EVs are still lagging

Pure EV sales are continuing to increase across pretty much across the board. But the Bolt vs. Volt numbers make for an interesting comparison, since they come from the same automaker (so any differences wouldn't be affected by brand preference), are priced in the same range, and share many features. And right now, it looks like the pure-EV Bolt is killing the hybrid Volt in sales numbers (I'm looking at U.S. sales. It may be different where you are). So perhaps it is not so much that demand is not there for EVs done well, but more so that most EVs on the market are not done very well.

Re:Over promise

[bluefoxlucid]

Why do you rich kids all have to be Canadian?

Re: Over promise

[bluefoxlucid]

Tesla is selling S3X and S3X sells.

Re:Over promise

[Bearhouse]

You're right, but this is not the "tooling" they're talking about - there are two levels:

1 - The really big stuff; the production line and associated robots, presses, other machines and dies, jigs etc. that help with producing and moving the major components around and getting them built. This is the stuff that takes months or years to setup. (Of course, a lot of this stuff is now based at suppliers, rather than in the same factory, and Tesla needs less than typical, since there's less stuff in their cars than a traditional ICE one.)
This stuff requires maintenance, but does not "wear out" that fast.

2 - The small "consumable" tools, such as dies, punches and drills that are indeed replaced on a daily or sometimes even hourly schedule, depending on job and production volumes. (Drilling or milling stainless steel, for example, kills your tooling pretty fast)

Re:Over promise

[Anonymous Coward]

You keep spouting the same bullshit every time you are told you are talking about different things to other people. You just hand wave away and ask for numbers.Perhaps work on your comprehension skills and less with the obvious trolling 'questions' you repeat ad nauseam.

Re: Over promise

[Anonymous Coward]

Why do you think BMW splits their high end products into 3?
Answer that and you will be part way along the path to understanding why your comparison is severely flawed.

Re: Over promise

[Anonymous Coward]

I think there are a couple of different meanings for re-tool. When you speak of re-tooling an automated assembly line, it does not have quite the literal meaning that it does when you are talking about an old machine shop production sequence where things were cut with mills and guys with calipers operating milling machines and lathes. Obviously, parts need replacement and tuning no matter what, but retooling an assembly line may mean moving large sections of tracks, conveyors and robotic tools, not sharpening blades.

Re:Over promise

[Anonymous Coward]

A) Ford is not "smallish"
B) Comparing a new model to a model that has been in production for decades is not apples to apples comparison.
C) Comparing build time for an ICE and a EV, is not apples to apples.

Please provide more evidence to back up your assertions, as it is now it seems to be lacking as no one reasonable can draw the same conclusions you have.

Re:Over promise

[Anonymous Coward]

I don't hate Elon Musk. I hate all the people that choose to believe him when he has a career as a spinmaster and utilizing various forms of lying.

He is the new Steve Jobs.

No one learned the lesson. So many are treating future predictions as present realities. That gave us the dotcom bubble. That gave us the housing market crash and the global recession. That gave us the boom and slow bust of the gig economy. People used to salivate over how great Uber was and how terrible and anti-capitalistic taxis are. Now, normality has reversed tune with no self-reflection. Similar happened to Wikileaks.

The people are trusting futurism, are accepting suspension of disbelief in the real world. They are heavily putting everyone at risk yet again because they desperately want their sci-fi fantasies to be true they refuse to be anything but credulous when they should know better by now.

Re: Over promise

[Green Mountain Bot]

But somehow, half a million people not only signed up to get on the waiting list for a Model 3, but put down $1000 to do so (in a time when nearly half of Americans could not pay for an unexpected $400 expense), even knowing it would be more than a year and probably more than two before they'd get it.

H.L. Mencken comes to mind for some reason.

Re: Over promise

[Anonymous Coward]

GM has over two dozen plants and has been around in one form or another for 100 years. Tesla is about 15 years old with 1-3 plants (1 automotive and 1-2 battery plants). Complaining that they aren't producing equivalent numbers to a long established company is like complaining that a toddler isn't writing its doctoral thesis in applied math at 2 years of age.

Re:Over promise

[Thelasko]

They will be happy to cooperate with you. One year later, an almost identical car from an almost identical factory in a different city will hit the market.

The way I've seen it happen is the corporate partner decides to terminate the partnership once the factory is up and running. They continue churning out widgits, and you don't get any of the profit.

Every company I've seen enter the Chinese market does it with a product they can't sell anywhere else. They use it to recover some of the development costs on products that didn't sell well in Western markets.

Re: Over promise

[Rakarra]

However, you'd expect these big automakers to be able to make EVs in any number (as long as they sell) easier than Tesla. Even if the electric drivetrain is 'new' to them, the bodywork, brakes, etc. is not. Te rest of the car is the same old thing they know -

The problem is the big automakers also suffer from a lack of imagination. Too often to them, making an EV is as simple as replacing the ICE components with EV components, done. Rather than design an EV from the ground up. Then they just stick batteries in the trunk or something ridiculous and you end up with no storage space. Of the big automakers making EVs (in 2016), I felt Nissan was the only one who got it right. Chevy EVs were cramped with no cargo space. Volkswagon and Fiat piped in artificial ICE engine sounds through the stereo system, a feature you could not turn off. The GM cars were cramped with absolutely no visibility through the windows. The Leaf was decent and had a better range then most of the others at the time, so that's what I went with.

Re:Over promise

[Anonymous Coward]

Sure, battery packs in other brands of EVs just magically appear out of thin air.

Re:Over promise

[Anonymous Coward]

You must be new here. Rei is one of the most prolific pro-Tesla trolls on the internet and (s)he hardly ever misses an opportonity to preach the gospel of Elon.

Re:Over promise

[HornWumpus]

2k/month now. 10k/month target.

Tesla could do production shooting into hard anodized aluminum. Safe bet they outsource the fasteners and other high volume stuff.

Re:Over promise

[Anonymous Coward]

Well, at least Tesla (under)delivers a whole lot more electric vehicles than the "big automobile producers" do who rarely venture beyond the "concept cars" displayed at automobile fairs but never actually going to market.

Most larger car makers have at least one EV. Some are preparing for a massive EV launch, others are already selling more EVs than Tesla.

The turnaround times from "fiction" to "product" on Tesla may not match their hype all the time but they crank out a whole lot more tangible and marketable innovation per revenue than basically everybody else.

The only things innovative about Tesla are their lies, deceits and excuses.

Re:Over promise

[Uberbah]

Such a non-response that I'll copy and paste, since you didn't address it the first time: Tesla has been "running out of money" because they've invested profits plus investor money in the business. They aren't sitting around spending billions on bleaching Elon's asshole, they could stop at any time and just focus on what they already have.

Hell, just look at Uber, that has yet to come up with a viable business model and yet they're able to throw billions in a dumpster every year and set it on fire. If self-driving technology doesn't advance fast enough for them to put taxis and trucking companies out of business, they're screwed. Whereas Tesla is building out their capacity and investing in R&D now that will pay off later.

Re: Over promise

[Luckyo]

Are people buying a vehicle from tesla expecting a toddler's version of what a built car would be, or something that actually competes with the guy writing the doctoral thesis?

In real life, Tesla competes directly with all other automotive companies building consumer vehicles. Therefore no one cares if they're a "toddler" in your eyes or not. They have to perform just like everyone else in the field. Competitive production has nothing in common with child rearing.

Re: Over promise

[Luckyo]

BYD is huge through. They build everything from buses to taxis.

It's always funny to watch the dick measurement contest between Tesla fans and critics when they talk volumes, as they never realise that there is actually an electric vehicle company that grows faster than Tesla (analytics suggest that it passed Tesla in revenue some time last year) and has none of the Tesla's "production issues" while apparently making far more vehicles, DIFFERENT vehicles on top of it, profitably. It's just Chinese, so they never hear about it.

Re: Over promise

[Anonymous Coward]

"On some great and glorious day the plain folks of the land will reach their heart's desire at last, and the White House will be adorned by a downright moron." ~ H. L. Mencken

Re:Over promise

[Uberbah]

Irrelevant. It doesn't matter what they've been spending their money on if they are unable to pay their bills.

Of course it matters. If Toyota, Ford, BMW etc were young motor companies instead of being around for a hundred years, they would be in the red as well. Because it takes serious capital investments to build up a new manufacturer from nothing, plus a network of fast-charging stations.

Tesla has an actual business model, as opposed to Uber that will completely implode if self-driving technology doesn't evolve fast enough for them to drive taxi and shipping companies out of business. Obviously Tesla shareholders are hoping that they will be more like Amazon, which operated on losses for a decade before turning a (tiny) profit. And yes, Tesla has their fingers in different pies, just like Amazon - maybe their battery factories or fast-charging network will be their AWS cash cow.

Worst-case scenario, a large auto company yet to make a bet on EV's buys out the Tesla name and infrastructure, like Honda.

Re:Over promise

[Luckyo]

China doesn't need Tesla. It has BYD, which does electric vehicles in China much better than Tesla ever could dream to do.

Re:Over promise

[Anonymous Coward]

As we all know 70% of the worlds population is Canadian.

Re: Over promise

[dgatwood]

Nah, it's not lack of demand. If another automaker could produce an EV with a similar feature set and price point to the Model 3, they could probably sell them as fast as they could make them.

No, they really couldn't. It isn't just car features like extended range that sell Teslas that the other car makers lack. It is also the ability to fully fill the battery in less than a day.

None of the other car makers have a nationwide network of fast DC chargers to rely on. A decent percentage of Tesla's customers rely heavily on superchargers, and that's a big selling point for their cars even among people who don't have to rely on them very often.

Unless they partner with Tesla's supercharger network, short of a revolution in battery tech that allows 10000-mile range and battery swapping instead of oil changes, the other automakers are likely to take at least a decade to get to the point where they can adequately compete with Tesla. They are just way too far behind, both in charge speed (most CHAdeMO stations aren't the 150 kW variety) and in quantity (most CHAdeMO stations are single-car stations).

Re: Over promise

[David Gould]

It could even be rephrased as "They _are_ doing it, it's just that they're making the transition more slowly than they could if they were willing to write off _all_ the investments in their current tooling, etc., all at once (which would be financially impossible, because shareholders)."

Re:Over promise

[LynnwoodRooster]

So you are talking GROSS margin, yet you always say "margin" or the car's profit margin - both of which are not correct. It's easy to show a big gross margin when you discount all the costs associated with making and selling a product! Cost Of Goods Sold ignores everything except the Bill Of Materials and the labor involved - and that is what you base a gross margin on. In other words - you're looking at an irrelevant number, because even if Tesla stopped "investing" in growth, their actual profit margin would still be negative (albeit not as much) - because of all the other costs associated that a gross margin ignores.

Gross margins prove the economic case for your products; operating margins remain negative until you've grown large.

False. Many companies, small and large alike, start off with positive profit margins, or manage to become profitable within a few years (not the 13+ of Tesla). On one hand you and the Teslerati keep arguing that Tesla is the biggest and owns the market, yet here you argue they are too small to make a profit - meaning the market really is small, too. Which is it? Are you happy that Tesla dominates an essentially-zero-sized market, or are you happy they are losing money on every car they sell because growth?

Re:Over promise

[LynnwoodRooster]

Extrapolating from a one-time event to a historical norm is rather dubious, don't you think?

Re:Over promise

[DarthVain]

Yeah I saw that a few years ago. You know the cheeky bastards don't even care when they call it "Landwind"...

Re:Over promise

[mesterha]

You keep confusing the marginal cost to make a car with profit margin of the entire company. They are different things. If you want to make your argument, you need to say why the marginal cost of making a Tesla is wrong.

Re:Over promise

[stoatwblr]

Neither of these are on the assembly line and neither of these should be affecting production schedules.

Just in time production methods mean that if you have scheduled downtime in the feedin lines, you overproduce slightly to ensure that you have sufficient buffer stock that final assembly isn't compromised, else you're faced with the spectre of unscheduled pausing of the line or sending incomplete items off the end and straight into rework, either is expensive.

The line machinery itself may need maintenance, but this is typically either done on the fly, at shift changes or in a monthly cycle, etc.

Anyway, Tesla getting their rates up is good, butspeaking as a european consumer having spent some tier looking over one of their vehicles they have the same problem as every other USA-built vehicle: Inferior fit, finish, panel alignment and final QC to virtually anything coming off a european or asian line. Tesla's execs could do with spending some time studying how the european majors do things.

Re:Over promise

[rtb61]

You do not understand business at all, nothing about a countries ego, just whether a company in China could benefit as a company, with that partnership. Grow up.

Re:Over promise

[Luckyo]

What would such partnership offer to BYD? It's better at batteries, it's better at vehicle building, it's better at scaling things up. Partnership is about offering each other something that other doesn't have. BYD has a lot of things that Tesla doesn't, but I struggle to think of what Tesla has that BYD doesn't that would be of any meaningful value to BYD and worth giving their competition access to things where they're massively ahead.

Re:Over promise

[Anonymous Coward]

Branding, design talent, luxury market, better export potential.

Re:Over promise

[Luckyo]

Branding is not about partnership in any way, they don't need "design talent" that can't design a car where panels come together properly when they have far better design talent who can make cars that come together properly in less time and for less money, luxury market is not the key or even main target market for BYD as they're actually aiming to make electric popular among populace, not just the top earners.

With all that down, how exactly would Tesla be able to offer BYD any better export potential, that they couldn't get from literally any other company that is in US and actually has a distribution network?

Bloomberg estimate 1214 per week

[Michael Woodhams]

https://www.bloomberg.com/grap...

However, their methods are inexact. They are doing the best they can without access to inside knowledge. Musk has inside knowledge, and there are laws against lying to the stock market.

Re: Bloomberg estimate 1214 per week

[Anonymous Coward]

However, their methods are inexact. They are doing the best they can without access to inside knowledge. Musk has inside knowledge, and there are laws against lying to the stock market.

Michael, Blomberg's estimates are actually ahead of Musk's public disclosures... That might give a clue?

Re:Bloomberg estimate 1214 per week

[Rei]

Bloomberg's figures have always been messed up; they seem to have some sort of very long running average and thus catch neither downtimes nor increases in production rates.

Re: Bloomberg estimate 1214 per week

[mapkinase]

I wish there laws against journalists misleading stock market

Can't they just add more 3D printers?

[Anonymous Coward]

I mean I was assured that we are already way past the point where we can 3D print cars and houses, so I find it interesting that we are still using Luddite factories in 2018?

What am I missing? I thought 3D printing changed the game thoroughly, completely, and irrevocably?

Can't the people that assured me we can 3D print cars print out a Model 3??

not Just Short

[Anonymous Coward]

umm... 20% is not just short.

Re:not Just Short

[Rei]

The full quote was, "If things go as planned today, we will comfortably exceed that number over a seven-day period”".

Given they were begging

[stabiesoft]

their employees to work extra hard, I am surprised he missed at all. I was expecting him to fudge it up to 2400 or 2500 for the week ending Q1 by doing whatever (stop X/S production and reassign bodies, hold cars from the prior week, ...) and then go back to the 1200/wk. Technically he is not lying then. But we will see as Q2 moves along. Bloomberg is likely going to keep tallying up deliveries. It will be interesting what happens tomorrow on share price.

Re:Given they were begging

[Anonymous Coward]

That's the thing. Musk doesn't seem to do things like that. He consistently seems to play the long game. Weird, yes. Most CEO's play the short game, so not surprised that his behavior is confusing. Looking at his past history though, he is consistently sacrifices the short term for the long.

Re:Given they were begging

[Uberbah]

Maybe ask Rei what is going on internally. Obviously his income is related to these stories somehow.

Not much being paid out right now for hit pieces on Julian Assange, gotta make the rent somehow.

Re:Given they were begging

[Barsteward]

just because you don;t like the facts turned out by Rei does not make it "trollish, flamebait behavior." - you're the one with the problem if you can't separate facts from fiction. all you have to do is refute his points with facts, trolling, name calling etc is a childish response.

Re:Given they were begging

[Anonymous Coward]

Interesting. I did not state I "don't like the facts". That was your claim.

Your claim is that I am trolling and name calling in a childish manner because of stating that Rei predominantly gets +4 and +5 mods in the only sort of article he is heavily active in while he is doing what you are claiming I am doing.

Classic psychological mirroring. Can't refute the argument so resort to a strawman tu quoque.

People that disagree with Rei, or say anything remotely not positive about Tesla and gain traction on these articles gets modded down as a troll. Then people like you come by and harass other users. Whatever Rei says is modded up repeatedly, despite his comments not being considered insightful or informative enough to be modded up in other areas.

Rei has been around for a long time. Anyone paying attention knows how common sockpuppet accounts are used on slashdot.

It's easy to see his bias. It's easy to go through posts and see how Elon Musk made wild claims that were later proven false but Rei defends, spins, distracts, or ignores. There is this concentrated effort by Rei going on for years. Why would anyone spend that amount of effort on a car manufacturer they do not work for and have no investments in?

Perhaps you are ignorant of that. Perhaps you are one of his sockpuppets. In any case, all you have added is harassment to the conversation.

Re:Given they were begging

[Anonymous Coward]

-1?
Rei is taking this personally.

Flack, incoming

[PopeRatzo]

According to an email from Elon Musk...

This article is a press release. It comes on a day when Tesla Motors stock declined over 11%. In one day. Elon is trying to staunch the bleeding by emailing this "story" out to every single media outlet on the planet.

I've seen Slashdot editors fall for press releases before. It's not even that uncommon. But this one is so much more blatant than the others that it should be noted, and BeauHD should be a little bit ashamed. At least, Musk should have been required to buy an advertisement here before this manufactured story was posted on the Slashdot front page.

Re:Flack, incoming

[Rei]

This article is a press release. It comes on a day when Tesla Motors stock declined over 11%. In one day.

Meanwhile, in the real world, Tesla declined 5,13%, only 3,23% worse than the Dow (which also declined today).

Elon is trying to staunch the bleeding by emailing this "story" out to every single media outlet on the planet.

The "story" was an email sent to employees. Not to the media. Now you may argue that it was sent to employees with the expectation that some of them would leak it to the media. But please get your facts right.

Re:Flack, incoming

[110010001000]

The Dow declined 1.9%. TSLA was down 5.13%. Pretty sure that is 270% worse. TSLA is an insane investment. Way too much risk.

Re:Flack, incoming

[gravewax]

Over in the real world we can look beyond the current day and see that todays 5% is in Addition to the big losses from last week. down about 17-20% in the last week.

Re:Flack, incoming

[PopeRatzo]

Meanwhile, in the real world, Tesla declined 5,13%, only 3,23% worse than the Dow (which also declined today).

My mistake. It was 307 five days ago. It's 251 today.

I'll let you do the math.

Re:Flack, incoming

[Anonymous Coward]

NASDAQ was down 2.7% and if you look at tech only it was worse than that. Amazon was down 5.2%. Today was primarily a tech bashing day because they are catching the brunt of the eye of the orange one this week - so desperately need to be able to put an eye of sauron image in here :(.

I bought some Tesla today and hope to buy more at an even lower level tomorrow. I'll sell half when it hits 300 again sometime in the next month (it's not good to be too greedy) and hold the rest in hopes of the normal 345 peak.

Re:Flack, incoming

[110010001000]

We are talking about the Dow, not NASDAQ. You would have to be a maniac to buy Tesla at this point. You know what their P/E ratio is? It doesn't exist, because there is no E. Insanity.

Re:Flack, incoming

[Anonymous Coward]

I wish you the best of luck with your gambling. Personally as an investor companies like TESLA are big no go's. Their is a small chance they could make you some reasonable amount of money if they go back up to 300 (that is a big if at the moment), whereas their is huge downside where if they don't get their act together you could take a bath on that investment. Their are far better investment opportunities in the market at the moment that have better upside without the huge downside. Either you are a TESLA fan that doesn't care about losing money or you have some extra insider information that the rest of us don't have (hence why we are all fleeing from tesla as an investment).

Re:Flack, incoming

[Applehu Akbar]

For my part, I ordered two more items from Amazon today. And yes, it pays state sales tax here.

Re:Flack, incoming

[goose-incarnated]

That's not how you math.

Re: Flack, incoming

[c6gunner]

Holy crap. I haven't been posting attention to the market recently, so thanks! Great time to buy.

Re:Flack, incoming

[whoever57]

Elon is trying to staunch the bleeding by emailing this "story" out to every single media outlet on the planet.

Its quite clear that there are companies and people out there with an agenda to push Tesla's share price down and they are planting stories of dubious accuracy in the media.

Of course Elon is responding to this.

Re: Flack, incoming

[Anonymous Coward]

no it is a great time to stay away. The crash is because of the increasing risk to the shares value, this is not like the general market dip and has potential for far bigger falls for them yet, if you think this is a great time to buy then you probably need to take some lessons on share trading before flushing money away.

Re: Flack, incoming

[gravewax]

If you understand the risks and believe it has bottomed out then sure. Looks to me like it has a long way to fall yet, the drop is a direct reaction to the very poor news out of them and the increased risk of money becoming more expensive for them.

Re:Flack, incoming

[Anonymous Coward]

which are the dubious stories? The market has reacted to three items, 1. a recall which is always unpleasant and expensive, 2. The fact they are going to miss manufacturing targets yet again, 3. the mounting debt which may result in ratings downgrades causing debt to be more expensive. Those are the items affecting the stock price, they all appear to be true unless you have information the rest of us don't?

Re: Flack, incoming

[c6gunner]

Oh it's the typical overreaction of ignorant crowds. It'll correct in a few weeks, or a couple months tops. All the "bad news" is taken completely out of context; their finances are far better today then they were a year ago. The only reason to NOT buy stock now is if you think it was massively overpriced to begin with.

Re: Flack, incoming

[gravewax]

how can you possibly say their financials are better, if anything the market has thus far underreacted to the news? they have taken on massive debt and missed numbers. that is really bad news, when it is just investors then missing is bad but not financially disastrous, when you have to service debt missing your numbers is really bad and leads to increased funding costs.

Re: Flack, incoming

[Anonymous Coward]

I have to agree. Trump's trade war is far from over, and $DEITY knows what other idiotic plans he has. This not a time to buy any shares, the risks are too great. Tesla could be swept along, no matter how good or bad they are.

Re: Flack, incoming

[Anonymous Coward]

wtf? Tesla had their credit rating downgraded, they have issued large amounts of bonds in the last 12 months and have missed production numbers. They are also in need of more funding which due to the downgrade is going to be a fuck load more expensive for them or they will need to dilute investor holdings (Either of which are really bad news for share holders). I see no overreaction here at all, if anything it has been relatively mild reaction as they are only down about 25% or so in the last month, that sort of news can totally collapse a companies share price.

Re:Flack, incoming

[Michael Woodhams]

That is a really silly calculation. If the Dow went down by 0.01% and on the same day TSLA went down by 1%, that would be 9900% worse, but it doesn't tell you anything useful. It makes even less sense if TSLA went up by 1% on that day, now your 'difference' would be -9900% or -10100% (I can't even decide which one makes more sense.) Using a number (Dow) that is the sum of lots of positives and negatives as a denominator is silly. TSLA underperformed the Dow by 3.2% is the correct way of looking at this.

Re:Flack, incoming

[PolygamousRanchKid]

Its quite clear that there are companies and people out there with an agenda to push Tesla's share price down and they are planting stories of dubious accuracy in the media.

I saw a pseudo-documentary eons ago that claimed Detroit's "Big Three" + Michigan Senator Carl Levin conspired to sabotage DeLorean . . . which was deemed to be a danger to the status quo.

I've often wondered if Detroit's now "Big Two" + Turin's "Big One" would sit by idly as Tesla eats their lunch. Sure, they are reluctantly also going electric . . . but dirty tricks are an essential part of doing business these days.

Re:Flack, incoming

[Barsteward]

its a pointless exercise posting specific stock market fluctuations as they'll be out of date as soon as you post

Re:Flack, incoming

[Rei]

TSLA is up 1,2% in afterhours trading. Is this all the shorts have? Surely they're not "going wobbly" so soon!

Re: Flack, incoming

[Rei]

It was a bunch of news with short term and/or minimal financial repercussions, except for the Moody's downgrade, which itself was based on said news with short term and/or minimal financial repercussions. And it is irrelevant to Tesla as, even if one believes they're "running out of money" (which is a nonsense claim), with $3,4B in the bank they'd still have no need to go to the markets in the short term and they have fixed terms with their suppliers, so whatever rating Moodys happens to give them today is of little to no bearing.

I don't expect the Q1 results to shut these people up (as the current increase in production rates won't be well represented in it), but I expect the Q2 results to do a pretty good job at it. Even if production rates average 2k/wk and even if margins didn't improve at all (which they obviously should as the line gets up to higher rates), across Q2 that'd be a massive revenue increase without a correspondingly large SGA increase.

Re:Flack, incoming

[Rei]

Now up 6,15% pre-market. Aww, whatever happened to Tesla going bankwupt?

Re:Flack, incoming

[MachineShedFred]

Yeah, except it was an email to employees, and leaked by employees. If he emailed it directly to the press that would very likely run afoul of public disclosure responsibilities with the SEC.

Did he send it to all employees knowing it would be leaked? Probably. But the distinction is important.

Re:Flack, incoming

[Anonymous Coward]

The fact that speculators continue to buy a stock does not somehow fix the underlying value being a sinkhole.

Re:Flack, incoming

[Anonymous Coward]

Let’s look at long term trend. Over the last month. -23% Over the last year -9%.

Re: Flack, incoming

[Anonymous Coward]

Those are short term financial impacts for a company that can't afford financial impacts. they have a need to raise approximately 2 billion in the short term. 3.4 billion won't last the year. The financial impact of the downgrade plus the recall should not be underestimated, they will need to go for funding by the end of next quarter

Re: Flack, incoming

[gravewax]

The financials announcement seems to have calmed the situation slightly, but only slightly. They hit 2020 in final week but many suspect that is purely by lots of overtime and short term reallocation of people to make the numbers look better. Either way I think they have precisely 3 months to prove they can exceed new quarters target and get their financials in order, if they miss again the current drop will seem like a paper cut compared to the oncoming bloodbath.

Re: Flack, incoming

[bingoUV]

If TSLA stock is that underpriced, why don't you make a fortune with it ? Invest borrowed money in it, and voila - Rei is richer than Jeff Bezos within a decade. By informing others about this great opportunity, you are spoiling your own chances of profit.

Muskese to English translation

[SlaveToTheGrind]

"After throwing practically every resource in the company at getting Model 3s out the door, we managed to make 2000 in one week."

We'll see if it sustains. Given how badly he needed some positive scrap of news to come out to try to stop the stock price, bond rating, etc., from cratering further, I remain skeptical.

Re:Muskese to English translation

[Rei]

Reminder: at the end of Q4, it was ~250/wk average in December, a ~450/wk average in January, and an "extrapolated" 1000/wk rate from the last few days of the quarter. This is significant growth regardless.

Meanwhile, the Grohmann line (replacing the downed zones #1 and #2 on the battery line) was shipped to Tesla last month and should be going live over the course of the next couple months.

Re:Muskese to English translation

[Anonymous Coward]

significant growth yes, but a long long way short of what was required and more importantly what was promised to investors and buyers.

Re:Muskese to English translation

[Daralantan]

I liked seeing: "but it still falls short of Musk's goal of 2,500 Model 3s per week". Followed immediately by: "Musk sounds a celebratory note on the 2,000-vehicle per week," and "while ignoring the larger issue of missed deadlines".

Impressive Ramp Up

[PPH]

Would this be a crash program?

In the meantime...

[Balthisar]

Popular models usually run at 50 to 80 jobs per hour. If he's talking seven days (!) instead of the normal five, and two shifts, he's running at 18 jph. Hardly impressive.

Considering how autopilot's been working

[Anonymous Coward]

... Is that two kilocars per week or two killer cars per week?

Dude, where's my car?

[Anonymous Coward]

Elon doesn't know. He can't make production quotas or generate a net profit, but he can sell you a flamethrower.

Very positive spin for missing low target by 20%

[Anonymous Coward]

The revised goal went from 10,000 per week to 5000 per week to 2500 per week and now Musk says 2000 is good and not failing the goal by 20 percent. Tesla has always liked to stretch the limits of finance and has taken big risks. Tesla almost went to bankruptcy in 2008 but was saved by government bailout. Tesla has financing constraints that put it into tight schedule and it's debt is already in junk loan category. Any rudimentary financial spreadsheet-fu exercise reveals how ROI for investors is almost certainly getting diluted and stock valuation will fall. They must take more expensive debt, then sell more stock, then reach their 10K per month goal at the end of the year.

It's spreading

[Actually, I do RTFA]

Can we stop having versions go, 3, 3s, 4, 4s, etc. I don't get the "s", or why cannot just go 3, 4, 5, 6, etc.

Re:It's spreading

[Jeremi]

Can we stop having versions go, 3, 3s, 4, 4s, etc. I don't get the "s", or why cannot just go 3, 4, 5, 6, etc.

The reason the model names are 'S', '3', and 'X' is so that when you've bought the whole set, it (sort of) spells out 'SEX'. Yes, really. (They originally wanted the Model 3 to be named the Model E, but Ford has the rights to the name 'Model E')

And if/when the model Y comes out, you'll be able to spell out SEXY, so there's that.

Re:It's spreading

[Actually, I do RTFA]

I was playing off the headline talking about "Model 3s", and Apple's habit of naming models things like "6s". But I never noticed that, and I believe its true.

Re:It's spreading

[Anonymous Coward]

Probably obvious, but:

SPACEX

(Phonetically) SPACE-SEX

20%

[Anonymous Coward]

Is not âjust shortâ(TM)

I'm not a fan of Tesla

[Anonymous Coward]

But I'd like to see you make 2,000 cars per week.

Why?

[Anonymous Coward]

What is tesler?

none thanks I'm good

[AndyKron]

My Mazda 3 costs half as much so no Tesla for me

Re:none thanks I'm good

[hipp5]

My Mazda 3 costs half as much so no Tesla for me

And the Chevy Spark costs half of the Mazda 3. So what?

Re:none thanks I'm good

[Anonymous Coward]

That buying a model 3 to save money is pointless?

Tesla skipped prototype tooling

[sjbe]

Toolings typically last for hundreds of thousands, if not millions of operations.

That depends entirely on the tooling in question. In many cases you are right but not always.

Tesla should still be on its first toolings UNLESS they've redesigned parts, forcing tooling changes or new tools altogether.

The problem Tesla has is that they apparently skipped prototype tooling and ordered the production tooling. That means that if they didn't get it right they'll have to tear it out and replace it or spend a lot of time and money fixing it. It's a gamble but one with a non-trivial chance of rolling snake eyes. If it works they get to production faster and save a lot of money. If it doesn't then they have a huge problem to fix.

Re:Tesla skipped prototype tooling

[LynnwoodRooster]

Skipping proto tooling would be a big gamble for a well-established company; for a start-up, that's suicide and IMHO just further confirms the team at Tesla really doesn't have much experience in manufacturing.

Assembly tooling not component tooling

[sjbe]

I'm not sure what sort of tooling is required for building a Tesla, but even a drill needs to be changed, and I'd be surprised if at least something wasn't tapped.

The tooling in question here isn't generally disposables like drills and taps but robots, paint, jigs, welding automation, material handling, presses, (big) die sets, etc. They aren't drilling and tapping anything on the main assembly line. All that stuff is done long before the parts reach the line. The tools in question are the ones on the line that can really affect production rates.

Cheap tooling is expensive in the long run

[sjbe]

Sure but even if Tesla where churning out 10k Model 3's a month then they don't need tooling that lasts for millions especially if there is a possibility of a part redesign in the interim.

They have orders for 500K units already. They need tooling that can last.

The entirely rational thing might be to go with cheap tooling that only lasts for 10k

You'd think so but that's not how it works. You can get prototype tooling that will last for a short time but you do NOT want to do production runs with it if you can avoid it. I've seen auto companies do this and it rarely ends happily. It wears out in unpredictable ways much too quickly. Ends up costing you more in the long run. The cheap tooling is actually more expensive on a per unit basis when you are at production volumes because of downtime, replacement cost, and maintenance.

Re:Cheap tooling is expensive in the long run

[Anonymous Coward]

They have orders for 500K units already.

No they do not have 500K orders. They had 500K reservations for a chance to order. So far only 30% are turning into actual orders.

Re:Cheap tooling is expensive in the long run

[dgatwood]

How many of them are turning into later reservations? I'd imagine a lot of folks are deferring their orders until the dual-motor version is ready.

Re:Cheap tooling is expensive in the long run

[Anonymous Coward]

70% are not waiting for dual motors.

Re:Cheap tooling is expensive in the long run

[Anonymous Coward]

70% of people aren’t waiting for dual motors.

Trying something different

[sjbe]

Skipping proto tooling would be a big gamble for a well-established company; for a start-up, that's suicide and IMHO just further confirms the team at Tesla really doesn't have much experience in manufacturing.

If they are adequately funded it might not matter. Yeah they are taking some risks and they know it. But I work with some of those big established auto makers and I can assure you that they waste HUGE amounts of money and time in endless meetings and reviews and prototypes that often don't actually make things better. My company makes a part for an EV for one of the big automakers and given how much time we spent in meetings with 10-15 engineers in attendance about this one little part I cannot imagine how they are making money on it. If Tesla tried to operate like the big automakers do Tesla would be out of business in a big hurry.

Re:Trying something different

[Anonymous Coward]

If they are adequately funded it might not matter

The problem there is that they aren't adequately funded. They've been through something like 4 rounds of funding, their currently credit rating is C+, which for a company is pretty fricken garbage. And if they don't start turning a true profit by the end of the year, they're in serious trouble as their debts start to become due at the end of this year.

Comparison

[sjbe]

At one point, Elon Musk was talking about doing 500,000 a year which is clearly still way out of reach. Even 200,000 a year (not enough to clear the order backlog in a year) looks unattainable right now.

For perspective the Ford F150 which is the fastest selling vehicle in the US most years has an annual production volume of around 800K/year.

Tesla doesn't have to please their critics - that's probably impossible. They just have to please their customers. The question is whether they can do so fast enough to keep their customers excited about the product. I know I wouldn't buy a car I had to wait 3 years to receive.

Re:Comparison

[Anonymous Coward]

At one point, Elon Musk was talking about doing 500,000 a year which is clearly still way out of reach. Even 200,000 a year (not enough to clear the order backlog in a year) looks unattainable right now.

For perspective the Ford F150 which is the fastest selling vehicle in the US most years has an annual production volume of around 800K/year.

Tesla doesn't have to please their critics - that's probably impossible. They just have to please their customers. The question is whether they can do so fast enough to keep their customers excited about the product. I know I wouldn't buy a car I had to wait 3 years to receive.

And there have been numerous complaints about quality from customers who have received them so far, especially on cosmetic stuff like body panel fitment that even the crappiest of car makers have little trouble getting right. That and the reports of Tesla cars needed a very high amount of rework when coming off the assembly line compared to the industry average.

It may be making them but.....

[Computershack]

It may be making 2000 a week but how many of them are actually fit for purpose and would pass a final pre-delivery inspection with any other car manufacturer? I suspect many of that 2000 are going out with problems meaning they'll be spending their first few weeks getting the manufacturing faults fixed.

Fast follower

[sjbe]

If they're so good at making EVs, well, why don't they?

The answer is because they don't have to. he strategy they are using is called fast follower and it has been used very successfully by a lot of companies. Ford, GM and the rest can afford to wait and let Tesla prove the market and make the mistakes for them. It takes them about 18-24 months to bring a completely new vehicle to market and start production at scale which isn't very long in the car industry. Once they decide to move they can move very quickly and they know it. So they are playing wait and see because establishing a new market segment is expensive and risky. The big automakers are well funded, experienced in manufacturing, and are doing a lot of research into EVs even if they aren't bringing them to market yet.

Now there are risks in waiting. The longer they wait the more chance that Tesla takes market share that they cannot get back. There also is the risk that they will not invest enough in key battery vehicle technology putting them at a competitive disadvantage. Being a first mover does have advantages as well.

Re:Fast follower

[b0bby]

Right, I see the big automakers dipping their toes into the water now, since they are still mostly interested in selling big SUVs which make them a ton of money (in the US at least). With the cost of batteries still being high, they can't hope to make that much from EVs yet. On the other hand, a switch to EVs seems inevitable over the next 10 years or so, they just have so many advantages once the batteries are cheaper. So they sell a trickle, work on their battery designs, and wait for battery prices to come down. When that happens, maybe they'll just buy batteries from Tesla or LG or China or make their own, that remains to be seen.

Re:Fast follower

[Pascoea]

There also is the risk that they will not invest enough in key battery vehicle technology

I think this is going to be the key disadvantage that the other major automakers will face when they finally decide that EVs make sense. They may know how to make the batteries, but actually being able to get them made is going to be difficult. I think they are making a mistake by letting Tesla get out ahead of them on battery production, that's going to be a harder gap to close than making the rest of the car.

Fast isn't always good

[sjbe]

Meanwhile, Tesla produced its first 10k Model 3s in the time it took GM to produce its first 1000 Bolts

That doesn't really tell you some very important information. What good is it to produce something fast if the quality stinks? I'm not saying Tesla's quality is good or bad but as the saying goes you can have it good, fast, or cheap. Pick two. Furthermore, it is pointless to run a production line faster than demand for the product. Tesla has a huge backlog of orders for the Model 3. The Bolt? Not so much even though it is a respectably good vehicle. I think the production line in Lake Orion has a capacity of something like 25-50K vehicles per year which is probably reasonable given expected sales.

And in all seriousness, do you REALLY doubt that GM's ability to ramp up production in a big hurry if they decide to do so?

Incidentally I'm distantly involved in the supply chain for the Bolt and I can see why GM is losing their ass on the Bolt based on the meeting I've had to sit through. The part I was involved in was a inexpensive piece and we had innumerably meetings with 10-15 people in attendance which had to have cost FAR more than the sales value of the part could ever amount to. Unbelievably inefficient.

Margins

[sjbe]

Learn the difference between margins and profits. Thanks.

Are you talking about Gross Margins or Net Margins? Net margin ARE profits - the terms are literally synonyms. I'm an accountant so I should know. Gross margins are just revenue minus cost of goods sold but have nothing to do with profits directly until you include overhead, taxes, etc. A manufacturing company will have gross margins around 25%-35% but the most profitable car companies in the world have net margins around 10%. Tesla's net margins are negative since they are losing money.

Re:Margins

[LynnwoodRooster]

No no no, you're all wrong. The gross margin is all that matters and if you have a positive gross margin then everything is great and your company will never die! Rei has said as much - and that you don't understand a margin is different than profit. Gross or net... Too many of the Tesla fanatics love to talk about a 25% gross margin, but fail to acknowledge the 20% loss on every product sold, at the end. It's not just capitalization of the factory (NUMMI was nearly complete in the first place), but advertising, marketing, distribution, and other costs that will never really go down, even as shipments go up.

Re:Margins

[Anonymous Coward]

Is that what the kids are passing off as admitting they were wrong now? Strange times indeed.

Expensive stock

[sjbe]

Holy crap. I haven't been posting attention to the market recently, so thanks! Great time to buy.

TSLA isn't even close to being cheap enough to be a good buy. It's a fine company but their stock price is ludicrously overvalued even after the recent pullback.

This will be bad for your local mechanic

[Anonymous Coward]

Tesla vehicles are famous for falling apart, they're about as reliable as a Yugo (except owners don't notice this because the vehicles monitor themselves enough that various parts are replaced just ahead of them failing, rather than leaving you stranded). For no other vehicle do owners find it acceptable to go through MULTIPLE motors and door handles in the warranty period, but that's standard for Tesla.

The trouble is that Tesla does everything they legally can get away with to prevent independent mechanics or YOU from servicing their vehicles, so all these repairs, once out of warranty, are done at extremely high stealership rates with no competition.

For example, they won't sell you a service manual unless you live in Massachusetts, and even then, you will pay $100 a day to access it. They simply refuse to let you have access to their special tools and diagnostic tools, including refusing to sell them.

This is unlike all other manufacturers, where independent mechanics' main complaints are they make all that available, but at high prices (like $300 service manuals and $5000 diagnostic equipment). In the case of Tesla, if your car breaks, you have no choice, it is only serviceable by Tesla.

Worse than that, if someone buys a salvage Tesla to rebuild, and Tesla had their hands on it before it made it to the salvage yard (likely case), Tesla BRICKS the car and refuses to unbrick it even if you have a safety inspection completed.

Don't buy a Tesla. They are destined for the landfill before they are worn out.

Financing

[sjbe]

The problem there is that they aren't adequately funded. They've been through something like 4 rounds of funding, their currently credit rating is C+, which for a company is pretty fricken garbage.

Doesn't matter as long as investors are still willing to throw money at them. Given the ludicrous value of the stock price that obviously hasn't been a problem to date.

And if they don't start turning a true profit by the end of the year, they're in serious trouble as their debts start to become due at the end of this year.

Only a problem if they cannot find additional financing. You really want to bet Elon isn't going to be able to sweet talk investors into another round of financing? Possible of course but I wouldn't bet against the guy.

Re:Financing

[Anonymous Coward]

Elon himself is the investor of last resort.

Re:Financing

[Anonymous Coward]

Their stock is tanking. Investors are no longer willing to throw money at them.

TSLA hugely overvalued as a stock

[sjbe]

I bought some Tesla today and hope to buy more at an even lower level tomorrow.

Your money but as much as I like Tesla's cars I wouldn't touch their stock with a borrowed dick. WAY too overpriced even after a pullback. Tesla's stock price should be 1/10th of it's current market cap even under the most optimistic valuation. The fact that it peaked higher than Ford is just absurd.

~Re:Over promise

[Anonymous Coward]

STFU AvE shill.

Re:~Re:Over promise

[Anonymous Coward]

WTF?

Overreaction equaled overpriced stock

[sjbe]

Oh it's the typical overreaction of ignorant crowds.

The overreaction of ignorant crowds is why TSLA had a market cap greater than Ford. The ignorance is on the upside. TSLA market cap should be at most 1/10th of its current value. Currently it is ludicrously out of line with any reasonable projection of future profits.

Uber

[sjbe]

Designed to turn a profit, sure - who doesn't design to turn a profit?

Uber as far as I can tell. They are burning through cash WAY faster than Tesla and I don't really see how Uber becomes magically profitable.

Gross margins

[sjbe]

But a gross margin around 25% is quite solid for the auto industry.

Tesla doesn't have a gross margin of 25% and in fact since 2016 it has only approached that level twice. Good but not mind blowing and likely to go down as it will be difficult to maintain the same margins on the Model 3 as they get on the much pricier Model S and Model X. Luxury cars for obvious reasons tend to carry higher gross margins. Most manufacturing companies have gross margins somewhere between 10-30%. My company works primarily in the auto industry and we have gross margins around 27% but we serve mostly aftermarket customers. That said it doesn't really matter. Gross margins matter a lot but they are just the starting point.

Plus there are some important differences in how Tesla books Cost of Goods Sold that make it something of a misleading comparison.

Tesla ran a negative not because of negative automotive margins, but because 1) SGA is scaled up to the size Tesla is actively growing to, not to the company's current sales, and 2) likewise for the R&D budget.

Your analysis is flawed. You cannot claim that all of SG&A isn't related to the cost of producing the vehicles because a LOT of it definitely is. It's just that it gets lumped into SG&A because it is hard to tease out fixed costs and assign them. Stuff like the salary of the top management falls into SG&A and it's obvious that a non-trivial percentage of their time should be allocated to the cost of each vehicle but it's hard to assign an exact cost number. Similarly the cost of selling a vehicle cannot be dismissed as unrelated to the cost of the vehicle.

You are correct that Tesla has scaled up SG&A in anticipation of growth so that should be considered but you cannot simply dismiss all SG&A costs the way you did. I'm a cost accountant and it would make my life a LOT easier if I could.

Gross margins prove the economic case for your products; operating margins remain negative until you've grown large.

Gross margins by themselves prove nothing about the case for a product. It's one bit of data among many that must be considered.

Re:Gross margins

[Anonymous Coward]

WHAT???
Rei is full of shit???
Say it ain't so!!!

Slashdot is just a product placement site now

[Anonymous Coward]

2475 produced would be "just short". Coming in 20% below your production target is horrifically poor performance.

Nice try, BeauHD, you shill

Controlling battery production

[sjbe]

I think this is going to be the key disadvantage that the other major automakers will face when they finally decide that EVs make sense. They may know how to make the batteries, but actually being able to get them made is going to be difficult. I think they are making a mistake by letting Tesla get out ahead of them on battery production, that's going to be a harder gap to close than making the rest of the car.

I think the risk is that Tesla is vertically integrated with their battery production and Ford and GM etc are not. This means two things. 1) Tesla may ultimately have a cost advantage since automakers without their own battery production will have to buy them from a third party at a markup. Only a few percent but selling cars is not a high margin business. 2) Tesla can sell their batteries to Ford and GM (or whoever else) meaning they make a profit even if they don't sell their own vehicles. In theory Tesla doesn't have to remain in the car market once the market for EVs is proven - they could just build more gigafactories and sell the batteries to the incumbents.

Ironically GM became huge precisely because they were vertically integrated but over time they outsourced more and more instead of continuing to capture that margin for themselves. That's not to say outsourcing is always a bad decision - it can make a lot of sense sometimes. But I think there is a real risk to big automakers who don't effectively control their own battery production.

Re:Controlling battery production

[Pascoea]

Agree wholeheartedly. Buying things like brake discs or air conditioning pumps from a supplier is probably a safe bet, as there are likely dozens of OEMs that could ramp up volume quite quickly. But "I need to ramp up to 5000 battery packs per week within 6 months" is likely to get you laughed out of the room.

Re:Controlling battery production

[bingoUV]

Except for patents, is there any reason why GM etc. cannot quickly start battery production of their own? For double points, they hire ex-Tesla employees or conduct some good-natured spying / social engineering to learn from Tesla's manufacturing ?

And if Tesla sues GM etc. for patent infringements - can't they use 2-fold strategy ?
1. At least produce batteries where Tesla hasn't registered those patents. GM etc. have presence in around hundred countries , I guess ?

2. Counter-sue Tesla and keep the lawyers busy until patents expire. Past century of automobile production experience has to count for something ?

thanks

"just short" = 20%?

[Anonymous Coward]

Since when did 20% below a goal count as "just short"?

Battery production

[sjbe]

Except for patents, is there any reason why GM etc. cannot quickly start battery production of their own?

In principle not that I'm aware of. It would probably make more sense for them to buy an already existing battery manufacturer at this point since they would be a bit behind the curve otherwise. Or they would need to establish a partnership on similar terms to the one Tesla has with Panasonic.

For double points, they hire ex-Tesla employees or conduct some good-natured spying / social engineering to learn from Tesla's manufacturing ?

Remember that Tesla is partnered with Panasonic for the gigafactory and Panasonic is the worlds biggest battery maker. So Tesla isn't really the company to worry about as far as GM is concerned. Most of the big battery manufacturers are Asian companies.

Doesn't Matter

[tmjva]

Yes, but did they SELL them all?  Doesn't matter how many are made, they have to be sold also.  (Of course I could be wrong here.  How long is the waiting list?)

You cant think of any reasons? LOL

[Anonymous Coward]

Are you in any way connected to reality as the rest of us know it?

Re:You cant think of any reasons? LOL

[Luckyo]

Not one that someone with your level of intelligence/investment in Tesla fanboying could understand, no.

You proved again how clueless you truly are.

[Anonymous Coward]

Tesla has hundreds of thousands of people lined up waiting to buy one of its cars, but you couldn't figure it out, even with all the clues.

Re:You proved again how clueless you truly are.

[Luckyo]

Thank you for confirming my point.

Re:You proved again how clueless you truly are.

[Anonymous Coward]

Thank you again for confirming mine.