Well, given the news of the past few days, I want to comment on where I see things are now and how I think things may play out in the next couple of months. This is a synthesis of both the official comments from Tesla as well as a number of news stories and commentators.
My view is that Tesla tried to ramp up in September as expected... and ran into battery weld problems. As they diagnosed the issue, they realized the zone 1 and 2 automated production line wasn’t working right and after some diagnosis, realized it was total crap. Tesla Grohmann people had some choice words in German. All vehicles delivered this far have manually built battery packs. Hence the “hand built” commentary as reported by a number of news outlets. The quality of the Model 3’s we’ve seen thus far don’t jive with hand welded body in white. But hand built battery modules... sure, we can’t see that and clearly that is what is going on. There was an electrek article on the hand building of the packs in the early summer. I suspect the Panasonic comments about production starting soon have to do with the first fix that Musk was talking about, but didn’t clearly delineate. They are expanding the hand building of the first two zones of the battery module assembly, including conscripting some Panasonic employees to do so... hence the complaint by an Electrek commentator with very specific info.
The real fix is fix #2, where Tesla’s “A” team of advanced automation folks including ones from Germany are redesigning zone #1 and #2 but that will take some more time. From Musk’s comments, I think they are expecting end of this month or beginning of December for that fix to be operational. If it works, they are able to make Dec = Oct and get possibly multi-thousands/week run rate. If not, they still have the production rate of fix #1.
So how fast is fix #1? Don’t know, but it has to be fast enough for it to be worth doing. WAG is that it is between 200 and 500/week, enough to get the rest of the production up and running at the initial clip so that Dec = Sept. likely this is at high cost, including a really high reject rate, but still, the cost of doing nothing is high too.
We have seen a steady stream of Model 3’s trickle out to delivery. I assume they restarted manual battery pack production at the initial slow rate once they figured out the automated line was borked. The VIN numbers will increase just based on that. The lull we saw was the period when they weren’t building any packs that pass QA/QC at all (or exceedingly few) with the automated line.
So let’s say through October they built and delivered about 600 Model 3’s. Let’s say they can build 50/week until fix #1 is in place in another week and go to 200/week, then 350/week. That’s 650 for November. 400/week in first week of December. Then fix #2 goes into place by 2nd week. So we hit 600/week by then, then 1,000, then 1,500. Production would then be 3,500 for December, for a total of 4,750. Seems plausible to me but with huge error bars. Could be 2,000 for 2017, could be over 5,000.
As for the market, well, we will likely get over exuberant once production does seem to get going somewhat. If fix #2 does seem to be likely, the market is likely to front run it. Likely we will be then disappointed by the Jan delivery realities, but if fix #2 is real by then, it won’t matter. If not, fix #1 won’t satisfy the market for long. My assumption is also that fix #2 is coming soon enough to not try to do major steps like shift to non-LR packs only in order to stretch out battery modules to vehicle ratio. The non-LR still has to go through EPA approvals, so maybe if fix #2 is later, they can do that for January.
