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For people who can spare 20 secs, here is a great comment on Tesla's lawyers (skip to 2m 33s, I cannot get that to work with the link):
FirebirdAlpha
Member
Yes, I think that possibility is priced in.
Edited my post, but the more concerning part is that Tesla is still trying to get more cars out of existing lines.
If the existing lines are already profitable, wouldn't it just be smarter, easier, and cheaper to raise more debt and buy more lines? That's what other manufacturing companies do, auto and otherwise.
Instead, they're trying to squeeze more out of existing lines. Given that they're promising a profit this quarter, it's unclear why they wouldn't go this way. (Reminder: CapEx is depreciated and doesn't impact income/profitability.)
So, I see one of two scenarios playing out:
- Tesla is going to hit 10k/week by the end of this year, because they'll get more financing and buy more lines.
- OR Tesla's access to capital markets is more constrained than some might think.
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Reminder: expenses cost money, even if you get to deduct it off your taxes...
Buying another GA line is not free.
Staffing another GA line is not free.
I doubt this. They said GA3 will hit 5k/week soon, and GA4 is supposed to ultimately be better than GA3, so that should hit 5k/week too.
They will need mote equipment elsewhere though, particularly for battery modules above 6k/week. The paint shop might need a lot of work too.
FirebirdAlpha
Member
Right, so if their GA lines are profitable, shouldn't it be simple for them to raise money?
I mean, the pitch is really simple:
"Hey there, banker. I want you to loan me X billion dollars to buy a new general assembly line for the Model 3. I already have 2 lines that are extremely profitable with a Y% gross margin. I just need money for a new line. Oh, and I've already got a backlog of 400,000 preorders."
If I'm a banker, this is an easy, slam-dunk loan.
Elon does not want lots of under performing lines (standard approach). He wants few high output lines (high GM, low overhead, high efficency approach.) He goes for the long term goal, not the short term fix.
FirebirdAlpha
Member
Just seems a little strange.
It seems like Tesla is planning to reinvest Q3 profits into the Model 3. Wouldn't it be better for them to be reinvesting profits into the Semi? Or the Solar Roof? Things that aren't proven yet and too risky for traditional loans?
He's gone to debt financing several times in the past. And he's building cars in tents now.
Just makes me wonder... Have they proven that they can make a profitable 35k Model 3, or not?
If they have figured it out, shouldn't they be getting financing so that they can scale a lot faster?
Making more money is better than making less money. Tesla has said that GA3 will be able to do 5000/wk. It makes more sense to take the lessons learned on GA3 and GA4 and implement them on GA2, bringing it also up to 5000/wk. Then they can use GA4 for Semi/Model Y/Roadster or whatever, and produce the Model 3 efficiently on two GA lines, GA2 and GA3.
I expect most of the planned Model 3 capex is for the paint shop, body-in-white production and the Gigafactory. In my view, it seems like general assembly won't be a significant bottleneck, going forward.
Given the current state of his gofundme page, Tripp is likely without legal advice at this time. Also, he is not under oath, and (desperately) trying to convince people to donate money.
Now, if he gets to a point where he is questioned after having been informed of his Miranda Rights, then he may choose to answer differently. So given that he was fired and given the subsequent allegations, I would not worry much about the statements he makes on the web.
So the question is the direction of incrementally increased cash flow from revenue vs depreciation of new assets and human capital expense. Also note that with higher volume, battery cells and resulting battery packs + powerwalls + powerpacks may see increased margin. Panasonic already signalled they would step up their game if asked. https://www.nasdaq.com/article/pana...eslas-gigafactory-if-requested-20180701-00103
MartinAustin
Active Member
It didn't take me long to move a certain new (and very prolific) TMC account to my "quickly scroll past" list, but it has now been promoted to the ultimate list-in-the-sky. The person or persons behind that account have wasted my time for the last, er, time.
They can manipulate costs transferred from the gigafactory enough to ensure good looking margins on the model 3. Analysts are going to want to see positive net income.
No reason Tesla can't show a decent net income in Q4 at well below 10K model 3.
Esteemed Sir, your history of postings indicate that you have a technical background.
In that case the world seems to have missed out on a great prosecutor.
Even if GA4 stays at ~1k/wk, if GA3 can hit 5k/wk (as has been touted), that will give them the breathing room to reconfigure GA2 to be more like GA3 (perhaps even better using lessons learned on GA4). We know GA4 was at 1k/week, and there's been some theories but AFAIK no hard evidence that GA2 contributed little to no output for the final week of Q2 (mostly based on the fact we've heard basically nothing about GA2 in ages, while GA3 and GA4 have had their virtues extolled for some time).
I suspect that GA4 being totally manual was both because it was quicker to set up, and also so they could compare which tasks actually worked better manual vs current robotic solutions on GA2 and GA3. This informs decisions for an improved GA3 and GA2 both. Realistically, this should have been done before constructing GA2, and perhaps it was but the optimizations they chose turned out not to be optimal.
Most likely reconfiguring GA2 will cost them very little in the grand scheme of things - remove some robots, move some around, set up new manual stations to take place of some robots. Perhaps they might not have enough of the right end effectors for certain updated methods of robotic assembly, so they need to buy some of those, but for the most part it should just take labor and time, and no actual CapEx to reconfigure GA2 to match or exceed the expected / intended 5k/wk output predicted for GA3.
This assumes, of course, that GA3 can hit 5k/week on it's own. If it can, then reconfiguring GA2 accordingly means they're at 10k/week for GA with just those two lines and can tear down GA4 (and can use parts of it for quick GA setup in a new GF later, though a new GF will also need a lot of long lead items like battery production equipment, etc).
So I think getting GA to 10k/week by end of year should be easy with minimal cost, assuming again that getting GA3 to 5k/week is doable.
The real question is what if any other bottlenecks are waiting.
GF might be a bottleneck, or perhaps that was already solved - if not, copy and paste the best combination of production lines (since they already have some parallel flows for module assembly with varying performance, for example). I don't think we have any real insight into Panasonic's side of GF (cell production) so there's no telling how fast they can double output if they need to (could be a couple of months to build, ship, install, and bring up another cell production line - or it might take half a year).
Paint booth might be an issue (aside from having someone constantly mash the button to restart it) - there was a rumor posted somewhere about buying more paint equipment from Japan or something.
The body in white line seems (at least from the few videos we've seen) to have a lot of waiting in it, so perhaps it can be sped up without duplicating it to 10k/week. If it requires duplication, at least it is probably easy to duplicate. Stamping might just need a few more stamping machines brought in and stamping forms ordered, surely doable in a couple of months (if perhaps not cheap). I've no idea on motor / inverter / etc production.
Suppliers ramping up might be the surprise bottleneck since they're rarely brought up - most bottleneck discussion seems to focus on what has been vertically integrated.
I suspect that GA4 being totally manual was both because it was quicker to set up, and also so they could compare which tasks actually worked better manual vs current robotic solutions on GA2 and GA3. This informs decisions for an improved GA3 and GA2 both. Realistically, this should have been done before constructing GA2, and perhaps it was but the optimizations they chose turned out not to be optimal.
Most likely reconfiguring GA2 will cost them very little in the grand scheme of things - remove some robots, move some around, set up new manual stations to take place of some robots. Perhaps they might not have enough of the right end effectors for certain updated methods of robotic assembly, so they need to buy some of those, but for the most part it should just take labor and time, and no actual CapEx to reconfigure GA2 to match or exceed the expected / intended 5k/wk output predicted for GA3.
This assumes, of course, that GA3 can hit 5k/week on it's own. If it can, then reconfiguring GA2 accordingly means they're at 10k/week for GA with just those two lines and can tear down GA4 (and can use parts of it for quick GA setup in a new GF later, though a new GF will also need a lot of long lead items like battery production equipment, etc).
So I think getting GA to 10k/week by end of year should be easy with minimal cost, assuming again that getting GA3 to 5k/week is doable.
The real question is what if any other bottlenecks are waiting.
GF might be a bottleneck, or perhaps that was already solved - if not, copy and paste the best combination of production lines (since they already have some parallel flows for module assembly with varying performance, for example). I don't think we have any real insight into Panasonic's side of GF (cell production) so there's no telling how fast they can double output if they need to (could be a couple of months to build, ship, install, and bring up another cell production line - or it might take half a year).
Paint booth might be an issue (aside from having someone constantly mash the button to restart it) - there was a rumor posted somewhere about buying more paint equipment from Japan or something.
The body in white line seems (at least from the few videos we've seen) to have a lot of waiting in it, so perhaps it can be sped up without duplicating it to 10k/week. If it requires duplication, at least it is probably easy to duplicate. Stamping might just need a few more stamping machines brought in and stamping forms ordered, surely doable in a couple of months (if perhaps not cheap). I've no idea on motor / inverter / etc production.
Suppliers ramping up might be the surprise bottleneck since they're rarely brought up - most bottleneck discussion seems to focus on what has been vertically integrated.
We must also consider solar energy & storage guidance for back half of the year (possibly 2019 as well). Margins might be as good or better then auto. There is a massive back log here, so wouldn’t be surprised if this “production line” gets some attention.
I’d like to hear how bumping up production here would make more sense then maxing speed toward 10k/week on auto. I think the right “ramping mix” announcement would help prep investors for any variance in expected auto numbers as many here have made some aggressive auto prod predictions absent the impact of energy ramping on them.
I’d like to hear how bumping up production here would make more sense then maxing speed toward 10k/week on auto. I think the right “ramping mix” announcement would help prep investors for any variance in expected auto numbers as many here have made some aggressive auto prod predictions absent the impact of energy ramping on them.
Model 3 test drives start this weekend at 8 SF Bay Area locations, as the first step in the nationwide rollout. Tesla offers Model 3 test drives for first time - in Bay Area
Four locations have test drives starting today and four starting tomorrow.
The article says the cars will be LR/PUP (not Performance).
Test drives can be scheduled on the Model 3 page.
Four locations have test drives starting today and four starting tomorrow.
The article says the cars will be LR/PUP (not Performance).
Test drives can be scheduled on the Model 3 page.
I've been wondering what the GM potential on powerpack deployments in particular is. IIRC the quoted pricing on some of these big projects is well north of the current car pack level costs, but I think that includes inverters, shipping, labor (including electricians), etc. TE might be making money hand over fist at advertised price or might have thin to no margins. This could be a surprise in either direction. I'd be curious to have more insight into these costs. The solar (production) side of TE is even more opaque currently. Once it gets really moving it will hopefully be printing money.
Todd Burch
14-Year Member
My hunch:
GA lines will not be the bottleneck to 10k.
I don’t believe pack production will be the bottleneck to 10k. (Grohmann stuff sounds like it’s hardcore).
I think it will be paint shop and body assembly (steps before GA that are robotic/automated).
I think Tesla will squeeze what they can out of existing equipment (minimize new capital costs) to see how high they can get in Q3. Then, after demonstrating a comfortable profit in Q3 (ending Q around 7k a week) and beginning to increase cash reserves, will do the spending to head toward 10k+ in Q4, but won’t exceed 10k until Q1 2019. Then I think Tesla may aim for 12k/wk by start of Q219 (additional optimization with minimal capital spending) and stop there.
GA lines will not be the bottleneck to 10k.
I don’t believe pack production will be the bottleneck to 10k. (Grohmann stuff sounds like it’s hardcore).
I think it will be paint shop and body assembly (steps before GA that are robotic/automated).
I think Tesla will squeeze what they can out of existing equipment (minimize new capital costs) to see how high they can get in Q3. Then, after demonstrating a comfortable profit in Q3 (ending Q around 7k a week) and beginning to increase cash reserves, will do the spending to head toward 10k+ in Q4, but won’t exceed 10k until Q1 2019. Then I think Tesla may aim for 12k/wk by start of Q219 (additional optimization with minimal capital spending) and stop there.
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