2015 Outlook Tesla Motors factory in Fremont, California.

[Benz]

Because it is hard to develop the brand equity to sell cars in the $70k-$140k segment and the fat margins they command. Ask Cadillac,Lexus,Infiniti,Acura and Lincoln how easy that is to do. Even Hyundai is trying to do this with very limited success. Taking the "Model S" brand down market would be incredibly stupid. It leaves profits on the table that can be used to fund superchargers,stores, service centers, R&D and Gigafactories to go downmarket.

Model 3 will sell in the $35k-$70K range and maybe overlap a bit with Model S.


Perhaps in the not too distant future Tesla will have a small medium large lineup like 3 Series-C Class-A4, 5 Series-E-Class-A6, 7 Series-S Class- A8.

Absolutely true.

The Tesla Model S is a car in the F-segment (large, luxery and sports). The growth of the global marketshare for the Tesla Model S will not only come from it's competitors in the F-segment, but besides that also from other segments too (and certainly in the next two years).

The point is that people now have an option which wasn't available before. And as the global Tesla Supercharger network is expanding more and more, this new option is becoming more and more attracting to more and more people.

Actually, a whole new segment has already been created (Tesla Model S + Supercharger network), but it has not been valued as such as of yet by most of the people. But that will come in the next few years.

You see, other brands don't offer a value propesition like Tesla Motors does. They don't sell cars with the promise of free fuel for live (for long distances). When people will start doing some math calculations, they will be surprised and they will start scratching their heads.

 

[30seconds]

The BMW 5 and 7 series share the same platform; maybe X5 and X6 as well. No reason why Tesla couldn't expand the use of the Model S platform beyond the X. With the skateboard chassis it may be even easier than with traditional auto platforms.

 

[RobStark]

The BMW 5 Series has 2698 mm wheelbase while the 7 Series has a 3070 mm or 3210 mm wheelbase.

Even if you want to call the 7 Series platform a stretched 5 Series it is so modified it is a different platform.

Since Tesla needs economies of scale and since they don't sell in the 2M unit range stretching or trimming platforms is not really an option right now.

 

[Benz]

Absolutely true.

The Tesla Model S is a car in the F-segment (large, luxery and sports). The growth of the global marketshare for the Tesla Model S will not only come from it's competitors in the F-segment, but besides that also from other segments too (and certainly in the next two years).

The point is that people now have an option which wasn't available before. And as the global Tesla Supercharger network is expanding more and more, this new option is becoming more and more attracting to more and more people.

Actually, a whole new segment has already been created (Tesla Model S + Supercharger network), but it has not been valued as such as of yet by most of the people. But that will come in the next few years.

You see, other brands don't offer a value propesition like Tesla Motors does. They don't sell cars with the promise of free fuel for live (for long distances). When people will start doing some math calculations, they will be surprised and they will start scratching their heads.

"Demand For Tesla Is Not The Problem, Switching The World To Electric Cars Is"

Link: http://www.forbes.com/sites/susanka...blem-switching-the-world-to-electric-cars-is/

 

[Red Sage]

I seriously doubt that Tesla Motors will ever develop a car to compete directly against BMW 5-Series, Mercedes-Benz E-Class, or AUDI A6. Those cars exist to fill in and bridge a gap in their product lines that was sort of artificially created anyway.

It is more a matter of perception than necessity, because it sets up a planned progression from one part of the product line to the next as buyers become more affluent. It works for traditional automobile manufacturers, because their sales of lower cost vehicles support the existence of their high end vehicles.

Tesla Motors is built the other way around. The Model S and Model X are cash cows meant to support the expansion of production into the mass market.

The management at Mercedes-Benz cringes at the popularity of CLA-Class cars. They are actually embarrassed by their being sold at levels they feel cheapen the marque. So they went even further up-market to build a nearly $1,000,000 S-Class Pullman Limousine to enhance the image of their brand as exclusive, luxurious, and rare.

Tesla Motors wants their cars to be inclusive, affordable, and ubiquitous. Elon Musk wants nothing more than to see electric cars all over the 405 FWY.

 

[RobStark]

Did the German executives have a heart to heart with Opera?

Of course Tesla Motors has different objectives than the German luxury car companies.

But to get to VW/GM/Toyota 10M unit volume you must first get to 2M BMW/MB type volume.

The segmentation of the luxury auto market is not more artificial than any other segment.

The 5 Series/E Class/A6 are not only smaller but sportier.

Because of the influence of Chinese customers the full size vehicles are becoming more and more like the American land yachts of yore.

As Tesla branches out from the from the hardcore EV buyer it will need to meet the expectations of the mainstream buyer in the $30k-$140k class before it has the resources to push even further down market. To compete head on with Corolla-Civic-Focus-Jetta-Cruze and Camry-Accord-Fusion-Passat-Malibu you really need economies of scale and very large capital expenditures.

Like all small companies, Tesla tries to cover as much of a given market with as few products as possible because of capital constraints. It can't afford to market a 5 Series, a 5 Gran Turisimo, X5 ,6 Series Grand Coupe, M5, 5 Hybrid and possibly i5 type of product variety.

 

[AudubonB]

This thread - title, at least - is the closest I could find as a platform for my question.

* In last week's 4Q conference call, Mr Musk mentioned that a logistical problem Tesla is facing is that the factory is runnning out of parking space.

* "380 acres" is the number one can find for the overall size of the compound. No idea at all how much of that is or could be devoted to parking

* We believe Tesla normally now operates 2 8-hour shifts, correct?

* We believe Tesla has approximately 6,000 employees, most of whom are factory workers, but some slice of that will be at service centers, HQ and elsewhere.

* Crunching the above will provide some approximation of # of spaces. But my puzzlement is as follows:

the Fremont factory's prior life as NUMMI was throwing out as many as 500,000 vehicles per year. A few minutes' searching suggests that the plant's workforce topped out at 5,440, but with ancillary submanufacturers the area had perhaps 20,000 workers dependent on NUMMI.

First, if Tesla's manufacturing process stands for anything, it has to be for automated production. How can the plant's current workforce be so large when production is a minuscule fraction of the factory's NUMMI days? Is the answer in all that prior outsourcing that mostly now is done in-house?

Second, if 5,440 workers formerly labored here, surely there remains room for current employees and their vehicles....or could the crunch only be a function of 2- versus 3-shift practices?

What else might be different now from before?

Also, hasn't Tesla purchased the 100+ acre adjacent tract from the railroad, I believe? Now, a parking lot does not sound to me like a very efficient use of what's probably pricey real estate, but at least in the interim pending long-term plans for the area, can it really, truly be the case that the jobsite is running out of parking room?

 

[flankspeed8]

Fremont factory's prior life as NUMMI was throwing out as many as 500,000 vehicles per year. A few minutes' searching suggests that the plant's workforce topped out at 5,440, but with ancillary submanufacturers the area had perhaps 20,000 workers dependent on NUMMI.

I wonder how those 500,000 vehicles were transported from the factory? Had to be mostly rail? Getting the cars from the single factory in a cost-effective, efficient and timely manner all around North America seems to be a big challenge. As the critical mass of cars sold starts to move eastward out of California seems like we could see some huge bottlenecks, especially around the end of the Q's (which includes the EOY tax rush). When you start thinking about logistics on this scale it is almost mind boggling.

 

[Krugerrand]

What else might be different now from before?

Likely the amount of the car that is being produced there - as in the number of pieces, is significantly more requiring more people. They do not just assembly there, but also make the motor there, the batteries packs, castings, painting, stamping, molds and whatever else I've missed. Remember that the seat manufacturer was also within the factory. They also have a service center at Fremont, and a delivery/pickup/store. And I imagine they employ way more design, mechanical, manufacturing and tooling engineers.

Elon also said that they'd be working on increasing efficiencies/production per worker. So they want to produce more without increasing the number of workers.

 

[hobbes]

I think they should organize a bus service like other Silicon Valley companies for their employees. Or is this not an option for a car manufacturer?!

 

[FredTMC]

Likely the amount of the car that is being produced there - as in the number of pieces, is significantly more requiring more people. They do not just assembly there, but also make the motor there, the batteries packs, castings, painting, stamping, molds and whatever else I've missed. Remember that the seat manufacturer was also within the factory. They also have a service center at Fremont, and a delivery/pickup/store. And I imagine they employ way more design, mechanical, manufacturing and tooling engineers.

Elon also said that they'd be working on increasing efficiencies/production per worker. So they want to produce more without increasing the number of workers.

Yep. That's it. Not just assembly at Fremont. They recently acquired a new facility to make parts/stampings. Highly automated. Central cal somewhere. So, looks as if they'll move some parts manufacturing offsite.

I think TM still says they are targeting 500k units/per at Fremont. That's good. I'm sure productivity will continue to improve YoY.
They can always build a parking garage if needed.

 

[flankspeed8]

They recently acquired a new facility to make parts/stampings. Highly automated. Central cal somewhere. So, looks as if they'll move some parts manufacturing offsite.

Lathrop Facility
Tesla Begins Manufacturing Modifications On Its New 431,000 Square Foot Facility In Lathrop, California

 

[RobStark]

Per the earnings call, Tesla now has over 10k employees.

They just purchased the former UAW Union Hall across the street from Fremont Plant that sits on ~3.5 acres of land that could easily become a supplemental parking with electric Shuttles to bring workers to factory entrance.

Also, Futuris,Tesla's Non-New Generation Seat and interior trim supplier move out Fremont Factory a few months ago into their own nearby building. Previously, they were leasing space from Tesla.

Edit LA Times Article Tesla factory racing to retool for new models - LA Times


6k Fremont Employees.

 

[Cosmacelf]

Futuris isn't doing the next gen seats? Who does make them?

 

[RobStark]

Futuris isn't doing the next gen seats? Who does make them?

Recaro

 

[Benz]

On the Conference Call Elon Musk mentioned:

"I can much easier predict like next year. Assuming people like the car, that’s where you start to see, yes, I don’t know, 40,000, 30,000 40,000 at least. Maybe, 50,000, let’s call it 30,000 to 50,000 Xs next year."

Total number of vehicles (Model S + Model X) in 2016 should be about 100,000.

 

[hobbes]

Was this Elon quote really with regard to production? That would be huge. I am afraid he meant reservations, but have to listen to the CC again for context.

On the Conference Call Elon Musk mentioned:

"I can much easier predict like next year. Assuming people like the car, that’s where you start to see, yes, I don’t know, 40,000, 30,000 40,000 at least. Maybe, 50,000, let’s call it 30,000 to 50,000 Xs next year."

Total number of vehicles (Model S + Model X) in 2016 should be about 100,000.

 

[chickensevil]

Was this Elon quote really with regard to production? That would be huge. I am afraid he meant reservations, but have to listen to the CC again for context.

Yeah that was all reference to production but based on demand. I assume the will be balancing out the two models to end up with a similar wait time. So if demand is 50/50 then they will have an even number of S and X coming off the line and that would be that 50k production number he referenced. If demand is only 75% of the S then it would be something closer to the 30k number produced. Just a guess. But the important thing is that he was talking g about 30-50k production for 2016 of the Model X.

 

[Benz]

Yeah that was all reference to production but based on demand. I assume the will be balancing out the two models to end up with a similar wait time. So if demand is 50/50 then they will have an even number of S and X coming off the line and that would be that 50k production number he referenced. If demand is only 75% of the S then it would be something closer to the 30k number produced. Just a guess. But the important thing is that he was talking g about 30-50k production for 2016 of the Model X.

Total weekly production rate at the end of 2015 (or the beginning of 2016) was supposed to be around 2,000 vehicles (S+X), right?

 

[Benz]

The Tesla Model X body line was to be established/realised in Q1 of 2015 at the Tesla Fremont factory, right?

Maybe they are working on it right now as there is still one week remaining in Q1 of 2015.

Or have they delayed it towards Q2 of 2015?

Has anybody heard anything about this?