They know at least SOME of the demand - those tens of thousands of $35K model 3s presold. But I guess better to spend extra on batteries than deal with the problem. This just screams of a company that is immature in its internal warehousing/stocking/manufacturing processes and will spend hundreds - thousands? - more per vehicle rather than optimize their manufacturing processes to handle what is considered normal throughout the rest of the industry (build to spec, on a production line).
This should be no more difficult than installing different colored interior panels. Same physical dimensions, same connections - just differences in the internals of the component which is irrelevant to the production line process.
Maybe they don't make a Model 3 "competitor" because there's not enough consumer demand for that? Name a single Tesla that competes with the Golf.
..Crickets...
Why does Tesla have thousands of Model 3s sitting around, getting charged with diesel generators?
...Crickets...
The bottom line is that VW built 11 million cars last year. That means in 2 weeks they built and sold as many cars as Tesla has EVER built. VW knows how to scale, knows what the market really is, and is probably going to bring a new vehicle to market a lot faster, smoother, and scaleable than Tesla.
Or do you still want to this Tesla is in the same league as VW, Toyota, Ford, GM when it comes to manufacturing and roll-outs?
Unless LG Chem has a greater ability to scale? LG has been doing massive production for about 60 years, they may know how to scale better than Tesla. Panasonic probably could have helped out, but they're backing out of paying more into the Gigafactory for a reason, so...
Is that why there are thousands of them, sitting lots, getting recharged with diesel generators, because they cannot sell them fast enough? Oh, that's right - you said make them fast enough. Unfortunately, that's not what matters - sales is what matters, not necessarily production rate.
VW makes cars, too. EV and ICE. By the millions. And they tend to have a much better track record of launching vehicles on-time, and in all promised configurations, unlike Tesla.
Yes, better to let them camp right in the middle of your yard, than ship them off! How many homeless do you have living in your house? Why do you not allow it? Is it because - like Pelosi and her compatriots when it comes to illegal aliens - you want all those "undesirables" to have a place, just not YOUR place? Personally, I'll take institutionalizing the mentally ill and drug addicted over letting them wander free in the middle of our cities.
Having literally just returned from a few weeks in Shanghai, I can 100% confirm that San Francisco is MUCH worse than Shanghai. Human feces in doorways doesn't exist in Shanghai. Heroin needles in the parks doesn't exist in Shanghai. Homeless and drug addicts wandering around and camping in doorways doesn't exist in Shanghai. Worn-down, unreliable, slow, noisy subways don't exist in Shanghai. And much more. MOST high-density cities around the world are a lot better than San Francisco...
Same steel. All you do is make a filler block to replace some of the cells internally. It literally is like taking a battery pack for your cordless drill, removing some of the cells, filling that in with a plastic spacer and a piece of wire, and being done with it. If the excuse is "it's too expensive", then what the heck is your manufacturing configuration management software doing to not enable you to save $1000+ per car, like every other car manufacturer?
You're affected for up to 27 seconds after you put down the phone. Yes, there is a problem with screwing with your phone at a red light - it impairs you, short term, when the light switches. Which is also a relatively dangerous time (everyone accelerating, potential for late intersection runners, etc).
If you hit them when they have the right of way, yes - you should be fined and go to prison for serious injuries or death. If they step out in mid-block between two parked cars? I am quite confident you will NOT be cited for the accident. The crosswalk is their domain, they rule supreme there.
According to the National Safety Council, reading/texting at a stoplight will degrade your attention on the road for the next 30 seconds. So you are more of a danger as you start to move forward when the light turns green.
Crosswalk, right of way, you turning - yeah, those pedestrians are walking into traffic! You're 100% at fault in all States, guaranteed. If you're not sure it's clear - then slow down and confirm. YOU have the yield to pedestrians legally in the crosswalk. YOU have the ability to maim and kill. YOU are the only solution. Slow down, confirm. A few seconds won't kill you - but it could kill someone else.
Here's an idea: you don't have to completely fill the battery case with batteries! You can use a block-out to fill the dead space. Then it's exactly the same effort on the production line. Seriously, this is trivial to solve. This is a case of Tesla trying to force upsells as much as possible.
What? Really? In this case, we're talking about software changes (no more than 1 man year to do, and that's being generous) or a change in design of a battery pack (perhaps 3 man years, again being hugely generous). Well under $500,000 in NRE costs. But you're probably spending at least $500 - if not $1000 - per "throttled" battery. If you're going to sell more than a few thousand cars, you're money ahead to make the smaller battery.
As far as Boeing, they do not build only 737-900s and "throttle" the software so it's a 737-500. They build the different models on the same production line, and equip them as ordered - model version, interior configuration, livery, etc.
Intel builds all their processors on the same die line, but then check each and every CPU to see what speed it can reliably run at. They don't purposefully take a 3.8 GHz processor and throttle it down to 3.2 GHz so they can sell it for less money. They sell the 3.8 GHz unit as a 3.8 GHz unit. and the one that runs at 3.2 GHz reliably is sold as a 3.2 GHz processor.
And note that pretty much all other car companies build multiple versions - including different powerplants, transmissions, rear ends, suspensions, body styles (even as radical as convertible and hardtop) all on the same production line. They change the build of each vehicle based upon what was ordered. Ford doesn't have 85 F150 production lines; Honda doesn't have 32 Accord production lines. They build one production line, make all variants on that line - and will add another production line when they hit capacity.
Hmmm, Ford, GM, Fiat, Toyota, Honda - they all use a single production line per model. They manage entirely different powerplants and transmission combinations (not to mention even body styles, like convertibles and hard tops, and of course different interior packages), not just a battery pack with different internals (which would be akin to a gas tank with the same external dimensions and connections and mounting points, but a different internal capacity). Honda doesn't sell you a V6 and disable a pair of cylinders and call it a V4, with a software upgrade to get a full V6. Because it makes no sense.
In fact, most things are NOT done that way. Last few times I've been to Flextronics and Compal, a single model of laptop was built on a single production line - but they would build all the different configurations of laptops on that same line (which is pretty trivial to manage with modern production management software and dynamic SOPs and binning per station).
Battery packs are connectors, cells, and steel. The cost of the steel will be the same - it bolts in the same way. There are less connectors (wiring) and fewer cells. It should scale about linearly. I guess if you want to give away another few thousand dollars per car, you could - but no one does that, because it doesn't make fiscal sense if you're selling more than a few thousand a year. I believe it's just Tesla trying to push people to pay an extra $4000+ to get the "upgrade" car, and having Yet Another Reason to not launch the $35K version (that was due in, what, 2017?)
Um, hate to break it to you, but Musk is still the CEO of the company; he's still at the helm. He is not the chairman, but the chairman doesn't run the company - the chairman heads the board which is responsible for ensuring the CxOs and VPs are managing the company correctly. The directors are the captains; the VPs are the colonels, the CxOs are the generals - and the board are the politicians back home. They do not control the company, they hire and manage others to do that.
As far as profits, how can it be more profitable to give away extra batteries? That is literally what is happening here. You buy the $40K model 3, you get a big battery you can use. You pay $5000 less, you get the exact same battery - but it's software crippled so you cannot use it all. I guess giving away hundreds or thousands of dollars worth of batteries makes sense if you're going to build a few thousand cars; if you're going to do the volume that Musk has been talking about (hundreds of thousands a year), that is literally tens of millions of dollars just going away for free.
So - the car still COSTS Tesla the same amount of money to make
No. The retail price and the package is not related to the cost 1:1. You're not paying Tesla for labour and materials.
Actually it's quite the opposite. The car will cost less to make due to less downtime / retooling for a different model which has the effect of increasing their margins. This is something that is done by most companies which offer a wide product selection where something is controllable by firmware.
Example, please? I work in high-volume consumer electronics and I've never seen this done. It could be done - software "disable" features from a higher-end product, and sell at a lower cost. But I've never seen it done, because if you're going to sell in any appreciable volume, the costs "wasted" in production vastly outweigh the supposed savings in tooling/NRE. Especially when the major components (for a car, that would be the engines, interior, body, suspension, etc) are not affected at all.
Not directly. You repatriate the funds, you have to pay 21% right then. You spend it on buildings/capex, and you can amortize that spending over 5 to 7 years - so you pay all the taxes now, and "get them back" over a 5 to 7 year spread. There's a break-even only if you ignore the time value of money over those years.
So - the car still COSTS Tesla the same amount of money to make, they will just sell it to you for cheaper if you let them set a few bits in the firmware - thereby cutting their own margins. And now you have to buy in person at the stores they closed - then re-opened - so that consumers haven't a clue going on? C'mon Tesla, just come out and say it - you cannot sell a $35,000 car, and you have no intention to do so, and you're just playing games to get people to "move up" to the $40K version.
Hard to take IP discounts if you're selling tangible goods... VERY few companies can do this. And still, even if you can - when you bring those profits back into the US - you pay taxes on them. So Company X2 returns profits back to parent company? Taxed right there. Want that money to pay for more employees/space/toys in the US? It's brought in - and taxed right there.
It's called a CVT, or a lot of gears. It's why a scooter with a 10 HP engine can really accelerate quite well - the engine runs at its peak power output, and the transmission (geared or CVT) handles the rest.
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They know at least SOME of the demand - those tens of thousands of $35K model 3s presold. But I guess better to spend extra on batteries than deal with the problem. This just screams of a company that is immature in its internal warehousing/stocking/manufacturing processes and will spend hundreds - thousands? - more per vehicle rather than optimize their manufacturing processes to handle what is considered normal throughout the rest of the industry (build to spec, on a production line).
This should be no more difficult than installing different colored interior panels. Same physical dimensions, same connections - just differences in the internals of the component which is irrelevant to the production line process.
Maybe they don't make a Model 3 "competitor" because there's not enough consumer demand for that? Name a single Tesla that competes with the Golf.
Why does Tesla have thousands of Model 3s sitting around, getting charged with diesel generators?
...Crickets...
The bottom line is that VW built 11 million cars last year. That means in 2 weeks they built and sold as many cars as Tesla has EVER built. VW knows how to scale, knows what the market really is, and is probably going to bring a new vehicle to market a lot faster, smoother, and scaleable than Tesla.
Or do you still want to this Tesla is in the same league as VW, Toyota, Ford, GM when it comes to manufacturing and roll-outs?
Unless LG Chem has a greater ability to scale? LG has been doing massive production for about 60 years, they may know how to scale better than Tesla. Panasonic probably could have helped out, but they're backing out of paying more into the Gigafactory for a reason, so...
Is that why there are thousands of them, sitting lots, getting recharged with diesel generators, because they cannot sell them fast enough? Oh, that's right - you said make them fast enough. Unfortunately, that's not what matters - sales is what matters, not necessarily production rate.
Probably from other suppliers, who supply about 65,000 cars a month in China. There are other big battery sources than the Gigafactory, you know...
VW makes cars, too. EV and ICE. By the millions. And they tend to have a much better track record of launching vehicles on-time, and in all promised configurations, unlike Tesla.
Dunno if it's any worse than the 100 miles per charge you get in a Model X...
Yes, better to let them camp right in the middle of your yard, than ship them off! How many homeless do you have living in your house? Why do you not allow it? Is it because - like Pelosi and her compatriots when it comes to illegal aliens - you want all those "undesirables" to have a place, just not YOUR place? Personally, I'll take institutionalizing the mentally ill and drug addicted over letting them wander free in the middle of our cities.
Having literally just returned from a few weeks in Shanghai, I can 100% confirm that San Francisco is MUCH worse than Shanghai. Human feces in doorways doesn't exist in Shanghai. Heroin needles in the parks doesn't exist in Shanghai. Homeless and drug addicts wandering around and camping in doorways doesn't exist in Shanghai. Worn-down, unreliable, slow, noisy subways don't exist in Shanghai. And much more. MOST high-density cities around the world are a lot better than San Francisco...
Same steel. All you do is make a filler block to replace some of the cells internally. It literally is like taking a battery pack for your cordless drill, removing some of the cells, filling that in with a plastic spacer and a piece of wire, and being done with it. If the excuse is "it's too expensive", then what the heck is your manufacturing configuration management software doing to not enable you to save $1000+ per car, like every other car manufacturer?
Hit someone stepping out between cars, in the middle of the block? You're not going to go to jail...
You're affected for up to 27 seconds after you put down the phone. Yes, there is a problem with screwing with your phone at a red light - it impairs you, short term, when the light switches. Which is also a relatively dangerous time (everyone accelerating, potential for late intersection runners, etc).
If you hit them when they have the right of way, yes - you should be fined and go to prison for serious injuries or death. If they step out in mid-block between two parked cars? I am quite confident you will NOT be cited for the accident. The crosswalk is their domain, they rule supreme there.
According to the National Safety Council, reading/texting at a stoplight will degrade your attention on the road for the next 30 seconds. So you are more of a danger as you start to move forward when the light turns green.
Crosswalk, right of way, you turning - yeah, those pedestrians are walking into traffic! You're 100% at fault in all States, guaranteed. If you're not sure it's clear - then slow down and confirm. YOU have the yield to pedestrians legally in the crosswalk. YOU have the ability to maim and kill. YOU are the only solution. Slow down, confirm. A few seconds won't kill you - but it could kill someone else.
Here's an idea: you don't have to completely fill the battery case with batteries! You can use a block-out to fill the dead space. Then it's exactly the same effort on the production line. Seriously, this is trivial to solve. This is a case of Tesla trying to force upsells as much as possible.
What? Really? In this case, we're talking about software changes (no more than 1 man year to do, and that's being generous) or a change in design of a battery pack (perhaps 3 man years, again being hugely generous). Well under $500,000 in NRE costs. But you're probably spending at least $500 - if not $1000 - per "throttled" battery. If you're going to sell more than a few thousand cars, you're money ahead to make the smaller battery.
As far as Boeing, they do not build only 737-900s and "throttle" the software so it's a 737-500. They build the different models on the same production line, and equip them as ordered - model version, interior configuration, livery, etc.
Intel builds all their processors on the same die line, but then check each and every CPU to see what speed it can reliably run at. They don't purposefully take a 3.8 GHz processor and throttle it down to 3.2 GHz so they can sell it for less money. They sell the 3.8 GHz unit as a 3.8 GHz unit. and the one that runs at 3.2 GHz reliably is sold as a 3.2 GHz processor.
And note that pretty much all other car companies build multiple versions - including different powerplants, transmissions, rear ends, suspensions, body styles (even as radical as convertible and hardtop) all on the same production line. They change the build of each vehicle based upon what was ordered. Ford doesn't have 85 F150 production lines; Honda doesn't have 32 Accord production lines. They build one production line, make all variants on that line - and will add another production line when they hit capacity.
Hmmm, Ford, GM, Fiat, Toyota, Honda - they all use a single production line per model. They manage entirely different powerplants and transmission combinations (not to mention even body styles, like convertibles and hard tops, and of course different interior packages), not just a battery pack with different internals (which would be akin to a gas tank with the same external dimensions and connections and mounting points, but a different internal capacity). Honda doesn't sell you a V6 and disable a pair of cylinders and call it a V4, with a software upgrade to get a full V6. Because it makes no sense.
In fact, most things are NOT done that way. Last few times I've been to Flextronics and Compal, a single model of laptop was built on a single production line - but they would build all the different configurations of laptops on that same line (which is pretty trivial to manage with modern production management software and dynamic SOPs and binning per station).
Battery packs are connectors, cells, and steel. The cost of the steel will be the same - it bolts in the same way. There are less connectors (wiring) and fewer cells. It should scale about linearly. I guess if you want to give away another few thousand dollars per car, you could - but no one does that, because it doesn't make fiscal sense if you're selling more than a few thousand a year. I believe it's just Tesla trying to push people to pay an extra $4000+ to get the "upgrade" car, and having Yet Another Reason to not launch the $35K version (that was due in, what, 2017?)
Um, hate to break it to you, but Musk is still the CEO of the company; he's still at the helm. He is not the chairman, but the chairman doesn't run the company - the chairman heads the board which is responsible for ensuring the CxOs and VPs are managing the company correctly. The directors are the captains; the VPs are the colonels, the CxOs are the generals - and the board are the politicians back home. They do not control the company, they hire and manage others to do that.
As far as profits, how can it be more profitable to give away extra batteries? That is literally what is happening here. You buy the $40K model 3, you get a big battery you can use. You pay $5000 less, you get the exact same battery - but it's software crippled so you cannot use it all. I guess giving away hundreds or thousands of dollars worth of batteries makes sense if you're going to build a few thousand cars; if you're going to do the volume that Musk has been talking about (hundreds of thousands a year), that is literally tens of millions of dollars just going away for free.
So - the car still COSTS Tesla the same amount of money to make
No. The retail price and the package is not related to the cost 1:1. You're not paying Tesla for labour and materials. Actually it's quite the opposite. The car will cost less to make due to less downtime / retooling for a different model which has the effect of increasing their margins. This is something that is done by most companies which offer a wide product selection where something is controllable by firmware.
Example, please? I work in high-volume consumer electronics and I've never seen this done. It could be done - software "disable" features from a higher-end product, and sell at a lower cost. But I've never seen it done, because if you're going to sell in any appreciable volume, the costs "wasted" in production vastly outweigh the supposed savings in tooling/NRE. Especially when the major components (for a car, that would be the engines, interior, body, suspension, etc) are not affected at all.
Not directly. You repatriate the funds, you have to pay 21% right then. You spend it on buildings/capex, and you can amortize that spending over 5 to 7 years - so you pay all the taxes now, and "get them back" over a 5 to 7 year spread. There's a break-even only if you ignore the time value of money over those years.
So - the car still COSTS Tesla the same amount of money to make, they will just sell it to you for cheaper if you let them set a few bits in the firmware - thereby cutting their own margins. And now you have to buy in person at the stores they closed - then re-opened - so that consumers haven't a clue going on? C'mon Tesla, just come out and say it - you cannot sell a $35,000 car, and you have no intention to do so, and you're just playing games to get people to "move up" to the $40K version.
Hard to take IP discounts if you're selling tangible goods... VERY few companies can do this. And still, even if you can - when you bring those profits back into the US - you pay taxes on them. So Company X2 returns profits back to parent company? Taxed right there. Want that money to pay for more employees/space/toys in the US? It's brought in - and taxed right there.
It's called a CVT, or a lot of gears. It's why a scooter with a 10 HP engine can really accelerate quite well - the engine runs at its peak power output, and the transmission (geared or CVT) handles the rest.