Slashdot Mirror
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.
it'll stop all the whiners who said they'd never do it. i bet the shorters are a bit worried now.
"The hands that help are better far than lips that pray." - Robert Ingersoll (1833-1899)
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.
All of them.
The layoffs will be a benefit in Q3. They're a hit in Q2 due to severance.
Correct that the Q2 delivery numbers will be low. Which is actually a very important thing, to keep the tax credit from expiring in Q2. That credit is potentially worth half a billion dollars to Tesla's customers, and some proportion will be used in buying more options. Options are high margin - sometimes almost pure profit. You want it to expire at the start of a quarter, not the end of one. Not like any manufacturer would ever admit to trying to "time" it.
500k Model 3 per year will still require significant expansion; current production is 250k Model 3 per year (+100k S+X). However, they've clearly found a way to expand cheaply. Tesla's last announced plan was to hit 6k in Q3. Doesn't sound particularly difficult given how much they scaled up in Q2.
Nobody, not Tesla or any serious analyst, expects them to be positive in Q2. But more and more analysts appear to be agreeing with Tesla's forecast (widely panned by analysts a couple months ago) of being sustainably profitable later this year. Tesla believes it'll be Q3.
There's no need for more cash, so the topic of loans or stock offerings is right out.
As a reminder to anyone reading this who disagrees with anything written above: you have a tool to financially profit off your disagreement with me - short selling. Unless you don't like earning money or something... or unless you don't actually believe what you preach. I mean, even if you had to put it on your credit card, how could you turn down such a rate of return?
Why must all aquatic villains play the organ?
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?
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.
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.