Slashdot Mirror
Tesla Temporarily Stops Model 3 Production Line (theverge.com)
An anonymous reader quotes a report from The Verge: Tesla is temporarily stopping production of its Model 3 electric car, amid a long waiting list and several missed targets. The company, however, says the shutdown is intended to resolve some of the problems that have contributed to the numerous delays in getting the cars to hundreds of thousands of reservation holders. The automaker said Monday it would halt production of the Model 3 sedan for 4-5 days at its Fremont, California assembly plant, BuzzFeed reported. Tesla, however, says this is part of a planned period of downtime that was similar to another shutdown in February, and it isn't intended to have an affect on the company's current production targets for the car. "Our Model 3 production plan includes periods of planned downtime in both Fremont and Gigafactory 1," a Tesla spokesperson told The Verge. "These periods are used to improve automation and systematically address bottlenecks in order to increase production rates. This is not unusual and is in fact common in production ramps like this."
Why such obsession over trivial and routine manufacturing decisions at Tesla? Are we also going to get "Janitors at Tesla factory had to put overtime to unclog plugged toilet" headlines?
Musk is the Donald Trump of car company CEOs.
In other news, Slashdot temporarily shut down it's web site this morning. But no comment on that.
Because Slashdot shutdowns happen pretty often and many think it's a good thing, so it's not news worthy.
A production shutdown at Tesla doesn't happen too often and some might not think it's a good thing, making it news worthy.
Personally, I don't care about either.
"File to fit, pound to insert, paint to match" - Aircraft Maintenance 101
Why such obsession over trivial and routine manufacturing decisions at Tesla?
Experienced automakers wouldn't be going through that. They know how to deal with it.
Of course they would. It just doesn't make the news when they do.
Tesla is the most shorted company right now.
The problem with the situation is that most investors *want* Tesla to fail so that they can make money from the short sales.
OTOH, Elon Musk is aware of the shorts and tends to do something to prop up the stock price whenever it drops a little. Like announcing a new model or a new production goal. (The production goals are never met, but the announcements make the stock tick up a couple of percent.)
So right now we're awash in bear market opinions, and many suggestive (but worthless) statements keep making the rounds such as:
"Tesla has never made a profit"
"Tesla loses money on every car they sell"
"Tesla only survives due to government handouts"
"Tesla is so far behind that some people will get their cars $SOMENUMBER years from now"
"Tesla is burning through cash, will be bankrupt in $NUM months"
"Musk is a serial liar"
Those are the highlights - have I missed any?
To analyze #4 as an example ("burning through cash"), note that this is something the CFO and CEO keep track of and anticipate, and are responsible for raising more cash before the bankruptcy actually happens. Also, specifically Tesla predicts that they won't need another round of financing, but that option is certainly open if they need it.
It's nigh impossible to get an accurate assessment of Tesla's worth right now, due to corruption in reporting.
Tesla expects to turn a profit for the first time later this year. Their stock will probably skyrocket when that happens.
Yet we hear that the ancient car companies can't improve because their lines are so inflexible. That's at least something that Tesla has promised to avoid.
My God, it's Full of Source!
OUTSIDE_IP=$(dig +short my.ip @outsideip.net)
Meanwhile, even with the delays, Tesla made their first 10000 Model 3s in less time than it took GM to make their first 1000 Bolts, from the start of tooling. And the first Model 3s were rolling off the line well sooner than the first Bolts (again, relative to the start of tooling).
Bankwupt! Bankwupt, I say! ;)
Hey, let's put or skeptic's hat on. Let's say that Musk is wrong about 5-6k/wk at the end of this quarter. Let's say they only do 4k at the end of this quarter. That would still be 80% of the line's initial design spec, aka the point where it's designed to be turning a 25% gross margin. Even a miss this quarter still means that they've pretty much succeeded with line development. Yes, they'll tune it over Q3 to get the rate up as high as they can, and this might mean a couple weeks downtime here and there. Sure, they'll probably take a quarter or two to realize the full margin. But at the end of this quarter, they're probably going to be earning at least 10% margin on at least 4k cars per week with an average sale price in the early run of around $45k (it's worth pointing out that the early cars are option-heavy and likely to have higher margins, so 10% is very pessimistic). That's Model 3 profits of $234M in Q3 (positive-$234M, vs a Model 3 loss in the last quarterly report) if Q3 averages only 4k/wk across all of Q3 (vs. the target of 5k/6k per week at the start of Q3). If Q3 averages 5/wk and 15% margin? That's $438M. Q4, at say 6k and 20%? $702M. I mention these numbers to contrast with the 598M quarterly loss they had in Q4.
Even if we ignore everything else - how the solar gigafactory is finally starting consumer sales, the huge boom in energy orders, the half billion or so they're going to get from deposits on the Y, etc, etc - Tesla's cash burn is all but over in Q3, and they're profitable in Q4. And even in Q2, their burn is heavily slashed from Q4/Q1.
And this is just the start of reasons I could go into as to why this "bankwupcy" thing is nonsense; there's about a dozen more. The shorts, strangely enough, always only develop their hindsight in the rearview mirror. To them, Tesla is always bankrupt in six months. Last summer, Tesla was going bankrupt this winter. Last fall, they were going bankrupt this spring. This winter, the bankruptcy was scheduled for summer. Here we are in the fall sweeps. Well, sorry to rain on the parade, but their predictive ability is worth squat. They keep pointing to reasons that Tesla did better than they expected, and it's always, "Well, of course they could do that, but they can't do it again, so now they're doomed!". Yeah? Well where were you pointing out what they could do? They were just off screaming "Bankrupt!" to their Seeking Alpha echo chamber, only developing their "foresight" after the fact. It's like listening to the Nostradamus crowd insisting that he predicted the 11 September attacks - if the predictions were so great, where were you on 10 September?
I will pull over this spaceship right now!
"See, the obsession is that investors have dumped BILLIONS into Tesla and it has been lost - yes, LOST - period."
The money hasn't been lost yet, but Tesla is burning through it's cash at a stunning rate. It looks to be a crapshoot as to whether Tesla will end this year flying high, dead broke, or struggling off into the future having sold off much of whatever it has in the way of marketable assets. See https://www.cnbc.com/2018/03/3...
Moody's downgraded Tesla's credit rating to "Negative" a few weeks ago. That's not good.
You can't see ANYTHING from a car, You've got to get out of the goddamned contraption and walk...Edward Abbey
Mostly you are spot-on. However:
As for mid-production product change, that's potentially worse than a manufacturing change, as you now have to let all your service centers know that the 2018.2 model is different than a 2018.1 model, what those changes are and, potentially, new parts you are going to need to service those changes.
While this stuff is technically true, Tesla has few service centers, and they are light-years ahead of other car companies in all other respects in regards to software — I'd bet their service documentation software is at least as good as anyone else's. To wit, when you insert the VIN into the software, it retrieves model- and vehicle-specific information from the main office. If a vehicle hasn't had a service recall, that will show up. When you look up parts, the numbers returned are specific to the model. The complete list of included options is retrieved. The service manual may even automatically hide sections which do not apply to the model being serviced.
Anyway, this is all a long-winded way of saying that none of that stuff impacts Tesla as much as anyone else; at least not at this point, but probably going forward as well. They may not have as much competence building vehicles (clearly) but they do seem to have more competence with software.
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
Oh, and speaking of margins. A majority of buyers get Autopilot ($5k). A minority get FSD ($3k). Software margins are huge, as in over 95%. Let's just say that Tesla made *no* profit at all on a $35k car and someone added AP. The car instantaneously has a 14% profit margin, just from that one option. Let alone premium interiors, dual motor, air suspension, long-range pack, performance package, 18"/20" wheels, paint options, etc, etc - just that one option alone can turn a zero-margin car into a 14% margin car.
I will pull over this spaceship right now!
The money hasn't been lost yet, ....
Yes, the money has been lost. Salaries, utilities, day to day expenses, insurance, etc .....
That money is all gone - forever.
The money spent on CAPEX, although in tangible assets, won't be worth that much when the company goes bust.
Cite: Every goddamn cash flow statement for the last 15 years. See the huge NEGATIVE number "Cash Flows from operations"
LOST.
You need to learn how to read a financial statement and understand what the numbers mean.
And don't cite CNBC because they all have shit for brains. The Economist, Bloomberg, WSJ (for financial subjects only) are valid sources.
Found the guy that works at Tesla
Or has invested in them :D
Fair point: I am invested in Tesla.
FSD doesn't exist yet. They need to write the software and do any upgrades necessary on the cars for less than $3k per customer. Good luck with that.
All I want is a secure system where it's easy to do anything I want. Is that too much to ask ~~ Randall Munroe
I am not saying Tesla is this or that but history of at least relatively modern economy shows that every major breakthrough failed economically. This happened to both great canals in Egypt and in Panama and with few other endeavors - railways in few places did that i.e.burning the investors' money, too. Whether this is going to be a great success or not is still in the future. The guy sis a genius whether he succeeds or not. At least he is trying which is the only known method of getting things done.
If it weren't for the massive injections of credulous investors' cash, Tesla would already be bankrupt. The problem with the model 3 production line is not "can they get it up to capacity" but "can they get it up to capacity in time". All the while they are not profitable, they are accruing debt and that debt is getting more and more expensive (because their credit rating is getting downgraded). It may get to the point that Tesla cannot increase production of the model 3 fast enough to produce the required profit per car to service their debt.
Then the FSD issue might become a millstone. What if they can't do FSD without expensive upgrades that have been promised for free? What if people start taking legal action because FSD hasn't arrived or the advertising is deemed fraudulent.
Don't buy Tesla stock right now unless you are up for high risk investments.
All I want is a secure system where it's easy to do anything I want. Is that too much to ask ~~ Randall Munroe
Wow, if investors didn't invest in a company, it would have no money? Imagine that.
BTW, we're going to be having a meeting of the Tautology Club next week, if you want to join us; it will be the first time that the Tautology Club meets.
See the post you're replying to.
Wrong. Tesla's debt is relatively stable. You're confusing cash with debt.
For Tesla to run out of cash, they have to literally not get the Model 3 profitable and up to significant numbers by next spring, and do nothing else financially to prevent it (e.g. eliminating R&D/capex, more asset-backed securities, etc, etc). And that's simply not going to happen. Even a miss on the Q2 target will put the line up to near its design spec by the end of this quarter.
Then they got a $3k interest-free loan, which they have to in part pay back later for the new hardware or refund. With no hard date on when the "loan" needs to be paid back.
And the wording concerning self driving is, and I quote:
Good luck to whatever lawyer is tasked with arguing that Tesla had actually promised some specific date. Also good luck with arguing that Musk isn't sincerely a massive believer that super-capable AI for things like self-driving is right around the corner.
I will pull over this spaceship right now!
And yet, the cash for FSD very much does exist. I think people are stupid for putting down money on FSD, but some people actually are. A nice interest-free loan for Tesla, on an option that has more than enough weasel wording in its description to insulate them from any liability for not delivering in the remotely near future.
I will pull over this spaceship right now!
They must need to shut shut down the line to let those robots cool off from that air friction!
Meanwhile, even with the delays, Tesla made their first 10000 Model 3s in less time than it took GM to make their first 1000 Bolts, from the start of tooling
Maybe that's because GM knows how to bring a car into production.
In 2017 GM made over 22,000 Bolts, meanwhile Tesla has only made a total of just over 17,000 Model 3's to date. GM is crushing Tesla.
Really /.? No more content than an LOL and a jab at the totally unrelated topics of an ex-president and an entire generation of people with no discernible purpose for the jabs other than "being a dick" and this gets modded up? Cool.
But then, when you have a loss of money on every car, you have to talk about something else to make it look not as bad as a 20% annual loss...
Browsing at +1 - no ACs, I ignore their posts. So refreshing!