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Tesla Meets Self-Imposed Deadline For Model 3, Rolls Out 7,000 Cars In a Week (cnbc.com)
Elon Musk tweeted on Sunday that the company produced 7,000 cars last week, including 5,000 Model 3 electric sedans. "Beating a self-imposed deadline, the final car rolling off the assembly line on Sunday morning, several hours after the midnight goal set by Musk, two workers at the factory told Reuters on Sunday." CNBC reports: The 5,000th Model 3 finished final quality checks at the Fremont, California factory and was ready to go around 5 a.m. PDT (1200 GMT), one person told Reuters. It was not clear if Tesla could maintain that level of production for a longer period of time. Tesla had a goal of producing 5,000 Model 3s per week before the close of the second quarter on Saturday to demonstrate it could mass produce the battery-powered sedan.
What if they hadn't beat that self-imposed deadline?
Oh. They would not have twittered.
I ... see. Well, nothing to see here, carry on...
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
At the thought of all those day traders with HUGE shorts against Tesla realizing that they're going to get absolutely frickin' REAMED.
... and his crew succeed a million times over and become filthy rich while doing it. The penance with which Musk pursues his visions is inspiring and he serves as a very neat role model.
Two thumbs up for scaring the living sh*t out of the leading German car industry which, IMHO, has become way to complacent with its success.
And thanks for paving the way into carbon neutral traffic and land-transport.
My 2 eurocents.
We suffer more in our imagination than in reality. - Seneca
"Beating a self-imposed deadline, the final car rolling off the assembly line on Sunday morning, several hours after the midnight goal set by Musk, two workers at the factory told Reuters on Sunday."
Um, if the final car rolled off the line several hours AFTER the midnight deadline, then they didn't actually beat it.
sure. And why wouldn't they be able to put in those extra shifts all the time?
You can't run a line 24/7/365. There's routine maintenance, cleaning and various other reasons that production equipment needs to shut down for a period of time.
Makes me think of that 80's movie Gung Ho where they rushed production to keep from being closed and cars were rolling off the line missing tires...
Plus with Tesla's penchant to make production changes on the fly, and the questionable build quality of the Model 3's they've already produced.. yeah, pass.
Meanwhile, in the real world, despite shorts insisting that last quarter's weekly numbers (2k) would be an unsustainable burst rate, they maintained it for weeks, all the way up to the next scheduled downtime. Then they got back up to 3,5k and maintained that until the next set of upgrades. Now they're at 5k. But if you really think the 5k is a burst, by all means short that.
Why must all aquatic villains play the organ?
he does consistently meet his targets
he is just consistently to optimistic in his predictions of when he'll meet those targets
Corporate goals/deadlines are generally always 'self imposed'. Seems folks think Tesla deserves some type of credit for this?
Not where there are big interest payments coming due in the near future.
It is the mark of a well run company to be able to accurately predict performance and then to hit those goals on schedule.
That's one way to measure it but the most important measure is their ability to consistently develop and maintain substantial free cash flow. Nobody really cares if a company meets artificial expectations if they consistently generate substantial profits. Companies generally can only "predict" performance accurately by fudging the numbers anyway. If you see a company that consistently "beats" wall street expectations by just a little every quarter, you can be dead certain there is some financial engineering going on. (I'm an accountant so I should know) In reality businesses are rarely so predictable so some amount of variation should be expected. You just don't want any huge negative surprises but a little up and down is generally fine unless you are some wall street asshat who only cares about the current quarter.
Musk isn't very good at defining targets that can be hit on schedule and/or hitting them on schedule. That doesn't mean he will fail, but it is generally a bad sign.
For most companies I would regard this as a negative but it's no secret that Musk sets very hard to achieve "deadlines" all the time so I think that is baked into the stock price. In a way it's kind of genius in that he acts a little irrational so it makes it harder for analysts to hold him to a standard of performance. He's also taking a page from the Amazon playbook in not really giving a shit about short term results and apologetically so.
Read what Elon actually said. 5000 Model 3s were 'factory gated', not produced. That means, according to Elon himself, a chunk of that number were already built at the beginning of the last week of June. Knowing this week was coming up, that chunk could be a significant portion. They are counted in the final tally even though in the last week Tesla may have done as little as move them from one lot to another. So Tesla didn't even pull off a true 5K burst week. This is why sustained production numbers are the only accurate ones. Those numbers are what Moody's pays attention to.
If I had stock in Tesla (or any car company) I would rather want to know how many cars they sell, not how many they produce.
Every car they produce at the moment is effectively already sold so at least for now it's the same number. Once they get through the initial bolus of orders then it will be more interesting. Of related interest Tesla doesn't maintain large stocks of inventory like the traditional automakers (they are basically building to order), nor do they account for when a sale occurs in precisely the same way either.
However, nobody else brags near his level and where he underachieves, nobody else goes to start with.
"Underachieve"? Seriously? Yes he sets unrealistic self imposed deadlines and misses a fair number of them but anyone calling Musk an underachiever is delusional. The guy has started PayPal, SpaceX, Tesla, SolarCity, and The Boring Company and he actively manages the last four. He has completely reshaped the space launch business and it looks likely he will do the same to the auto business. If that's underachieving then give me some of that.
Frankly if you had achieved 10% of what he has you'd be bragging about it too. And bragging isn't really a problem if you can actually back it up and so far he mostly has.
The shorters are the ones who set themselves up to profit from the misfortune of others, and collectively have also been working to bring about that misfortune.
When a stock is as irrationally over priced as Tesla there is nothing wrong with betting that it will fall back toward sanity. Honestly we need people who are willing to bet with their own money when something seems wrong. Tesla is doing some really interesting things but there is no rational basis for them to have a market cap larger than Ford. I honestly am kind of a fan of Tesla but I'm also a fan of financial sanity.
Furthermore when you are in a mature market like automobiles ANY investment is de-facto a bet on the misfortune of others. If you buy stock in Ford you are effectively hoping for misfortune for Toyota or GM. It's near as makes no difference a zero sum game. If you buy stock in Tesla you are hoping for misfortune for their competitors. That's fine but it's not really much different than shorting TSLA directly.
If it fails then it fails expensively, which discourages people from that practice thereby reducing the amount of misfortune in the world.
They are taking a risk and they are well aware of that fact but I think their thesis is correct. Tesla's current stock price cannot be justified with any rational analysis of likely future free cash flows. A $60 billion market cap on a company with $11 billion in revenue that has never made an operational profit? That's bananas. The only real question is when Tesla's stock price will come back to Earth. Might take a while but sooner or later it has to happen.
And you claim that with what authority?
Simple logic. Ford made $8 billion in PROFIT last year on $156 billion in revenue and has a market cap of $40 billion or so. Tesla lost $2 billion on $11 billion in revenue and has a market cap of $60 billion? Further Tesla has shown no credible path whereby they will generate profits superior to Ford's in the future. If you think that makes any kind of sense you are out of your mind. There is no rational scenario you can propose whereby Tesla is going to generate enough profit to justify that market cap in less than 15 years (and that's being generous) even with ludicrously optimistic assumptions.
I'm not entirely disagreeing, but I'm not willing to make the claim that it's "irrationally over priced", because Tesla is in a position that few companies have ever been in.
Evidently you do not recall the dotcom era around 1998-2000. Irrationally overpriced companies are nothing even remotely new and Tesla is not covering any new ground there. Seriously, show me any credible story whereby Tesla generates enough profits to justify their current market cap in less than 15 years. At the end of the day stock prices and market caps are all about profits (including expected profits), otherwise investors eventually have to look elsewhere to make money. If I invest $1000 in Tesla but have to wait 15 years to recover my money while playing a game of who is the greater fool then I'm an idiot.
Tesla has already sold pretty much all of the vehicles it will produce this year, and maybe next year, without sales people, showrooms or a national advertising campaign.
Impressive but let me know how you think they are going to manage that trick when they sell as many vehicles as Ford does. It's easy to sell out when you cannot produce all that much to begin with. 5000 vehicles a week? Ford makes and sells about 17,000 F-150s each week just on that model alone and they aren't scrambling to do it either. And more importantly they are making huge profits along the way.
Yes, compared to the established car companies, Tesla's valuation looks insane.
Compared to pretty much ANY company Tesla's valuation IS insane.
It will be a dire week for short sellers. I finally sold my TSLA last week, so it's sure to double next week!
Socialism: a lie told by totalitarians and believed by fools.
Everybody with whom you disagree is a Russian bot.
Now, that's not actually what I said at all. I said there are bots and sockpuppets on both sides, but they're focusing more on stirring up anger than having actual discussion. For example, one of the preferred tactics on both sides is "whataboutism", where they will bring up a completely unrelated subject like a recent court decision to steer the conversation away from rational analysis and towards partisan vitriol.
Did you know the Supreme Court, in effect, just destroyed public sector unions?
Oh look, there it is!
Why don't you focus on issues instead of the stupid Russian interference fantasy?
Foreign interference is an issue. It is probably the most important issue, because it undermines the legitimacy of every other democratic process.
Take your example, for instance. The SCOTUS has determined that collective bargaining is not necessarily always something a non-union worker wants (regardless of whether it's in their best interest), so under the First Amendment, non-union workers have the freedom to choose not to associate with the union.
Now, it's certainly easy to think this is a purely American problem. It's a case in an American court about American workers interpreting American laws governing American business practices. However, it's still a matter of international interest, as those American public-sector organizations are responsible for handling how the United States executes the duties of government, which in turn affects how the United States can compete globally with foreign efforts. If a foreign power can sway the American policy in a way that harms America's economic capabilities, they will create opportunities for their own advancement.
Similarly, American elections are vitally important for determining American policy. If a foreign government is able to promote a narcissistic President, for example, they would be able to sway any policy or political negotiations by simply rolling out red carpet and offering copious amounts of insubstantial flattery. It is imperative, then, that we fully investigate any allegation of impropriety during elections. Everything - from campaign funding to personnel selection, and beyond - should be open to scrutiny, even if nothing is ultimately found.
Even if the investigation ultimately finds no foreign influence, having a thorough investigation process itself deters foreign powers from trying to influence elections, as they can be sure the investigation will make such influence difficult to hide, at best.
You do not have a moral or legal right to do absolutely anything you want.
The stock valuation is definitely high because of speculation, but it's long term not short.
How long do you think is "long term"? Even a long term play still needs to have a justifiable ROI. It doesn't matter if it returns a 10% gain if it takes 10 years to do it based on the companies operating fundamentals.
If they can actually maintain sales and production of 5000 Model 3's a week that will generate profits around a couple billion a year, working from the assumption that their gross profit margin is only 20%.
Gross margin is not relevant here except insofar as it affects net margin. If Tesla builds 5000 Model 3s per week and sells them for $50K each then that is ~$13 billion in revenue (slightly over double their current revenue). 20% gross margin is in line with other automakers so the question is what the net margin will be. The most profitable automakers out there top out at around 11% net margins. Let's pretend Tesla can match that somehow even though they clearly won't in the near term. That would be a profit of $1.43 billion assuming some ludicrously optimistic assumptions come to pass. But realistically Tesla would be lucky to capture a fraction of that in the next few years. They might be very profitable in time but it won't happen in the next 12 months and they have some debt to serve next year.
Then you have to figure out how long it would take for the shareholders to recoup their money. With a market cap of $60 billion (equity) plus $10 billion in debt (debt gets paid first over equity) and profits of $1.43 billion it will take 49 YEARS for TSLA to generate a positive return on that investment at current share prices. ROI = Annual Cash Flow / Equity and that works out to around a 2.8% ROI under completely unrealistic profit assumptions of 11% net margins. I'm a patient guy but I need an ROI before I'm dead.