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2Q 2013 Model S Deliveries Potential Surprise

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I have a theory explaining the seemingly out of sequence VIN for the cars at the end of production line. It is purely speculative, as I have no information to support or disprove this theory.

The current order handling procedure includes confirming the order and the options two weeks after the order is placed. At this time order is "released" to the factory. It does not mean that the car gets into the manufacturing right away, just means that factory personnel gets paperwork and includes this order into the production planning. I believe that this would be the most logical point at which VIN is assigned. This means that looking at the factory release date in conjunction with the corresponding VIN can give a very accurate data on the current rate of reservation.

From this point on, however, nice sequential flow of VIN numbers gets interrupted because as part of the production planning factroy needs to form batches of similar cars in order to minimize re-programming and even possibly minor re-tooling of the production "line". At this point cars which are ordered not as often as most popular configuration (say P85+) need to be groupped together to form a batch big enough to minimize re-programming of the line, but not to big as to excessively increase time between the order and delivery. At this point cars with VINs that are much higher that VINs that are currently entering the production can be pulled up in the sequence. This is the process that need to be performed with every configuration that need to form a separate batch, and leads to the phenomenon of seemingly out of order VINs exiting production line.

One of the conclusions would be that in order to accurately predict the production rate it is necessary to ignore potentially much higher VINs for the less commonly configured cars. The VINs for the cars with the most common configuration (presumably 85 with air suspension) would be less likely to be out of sequence, and, therfore will most accurately indicate the production rate.

What do you think? Does this theory seem plausible, or there are competing explanations for the out of sequence VINs?
 
During the past two months, most of the EU backlog was finalized, including many orders placed two years ago. I don't know the total number, but it must be at least 3,000 orders - probably much more. I don't know enough about the process of assigning VINs to turn this info into a full-fledged theory, but there could be something there.
 
During the past two months, most of the EU backlog was finalized, including many orders placed two years ago. I don't know the total number, but it must be at least 3,000 orders - probably much more. I don't know enough about the process of assigning VINs to turn this info into a full-fledged theory, but there could be something there.

I actually think that confirmed European orders do not have assigned VINs yet. I should have mentioned in my post that the theory, for now, applies to NA orders only.
 
So there are no significant gaps between 8000 and 10'000. They were well documented back then:
https://docs.google.com/spreadsheet/ccc?key=0AgGtU6wnKp4CdDZKcGpwWkFqa1l5RjRwdTd2blNzOVE#gid=0

Then I went through the various threads, and tried gather other VINs between 10'000 and 14'000 to try and find gaps. Here are the 10 largest potential gaps. If you have, or know of a VIN in any of these ranges, please reply to this thread (first 3 numbers should be fine).

12144 -> 12805: 661
9808 -> 10357: 549
13435 -> 13812: 377
11711 -> 12061: 350
11380 -> 11711: 331

9555 -> 9808: 253
10357 -> 10600: 243
11141 -> 11380: 239
9332 -> 9555: 223
10647 -> 10843: 196

Excellent summary of gaps! Great work

Hopefully we can get owners to help fill these in and build confidence that there's no significant gaps. Our goal is to verify production/delivery is higher than guidance for Q2
 
I actually think that confirmed European orders do not have assigned VINs yet. I should have mentioned in my post that the theory, for now, applies to NA orders only.

Actually a swiss member (GP #809) on the german tff-forum.de reported his VIN being: 5YJSA2DNXDFP13888 .

The VIN was also entered into the EU Delivery Status List . As far as I know this is the first european reservation holder, who reported getting a VIN assigned.
 
Actually a swiss member (GP #809) on the german tff-forum.de reported his VIN being: 5YJSA2DNXDFP13888 .

The VIN was also entered into the EU Delivery Status List . As far as I know this is the first european reservation holder, who reported getting a VIN assigned.

So they just started to add European numbers to the system. I got my 13812 on June 9.

I originally thought that there is no reason for Tesla to assign VINs to Europen orders, unless they are about to start production. Looks like this time have just came.
 
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Actually a swiss member (GP #809) on the german tff-forum.de reported his VIN being: 5YJSA2DNXDFP13888 .

The VIN was also entered into the EU Delivery Status List . As far as I know this is the first european reservation holder, who reported getting a VIN assigned.

Reminder to Poster’s on this thread: Please update the delivery thread as well…thanks.

Joe fee

Model S Delivery Update
 
So there are no significant gaps between 8000 and 10'000. They were well documented back then:
https://docs.google.com/spreadsheet/ccc?key=0AgGtU6wnKp4CdDZKcGpwWkFqa1l5RjRwdTd2blNzOVE#gid=0

Then I went through the various threads, and tried gather other VINs between 10'000 and 14'000 to try and find gaps. Here are the 10 largest potential gaps. If you have, or know of a VIN in any of these ranges, please reply to this thread (first 3 numbers should be fine).

12144 -> 12805: 661
9808 -> 10357: 549
13435 -> 13812: 377
11711 -> 12061: 350
11380 -> 11711: 331

9555 -> 9808: 253
10357 -> 10600: 243
11141 -> 11380: 239
9332 -> 9555: 223
10647 -> 10843: 196

Why did you stop your table? You missed all of the 13,xxx entries that come immediately after the 12,061 report. You also need to list the delivery date for each VIN to get important context.

In March, we had a nice linear progression in VIN's up through ~7,400 with a week to go. But there was also a discontinuity where VIN's starting coming in around the 8,400 level and progressing up from there. We know that Tesla ended up delivering ~4,900 cars (which should have put them at ~7,700 in terms of VIN), but basically they built like 300 cars from 8,400-8,700 in that last week. Then in following weeks (beginning of April) you had all kinds of backfill, where new deliveries were back at around ~7,500 and working up until they filled the gaps in about the third week of April.

Something very similar (but on a smaller scale) happened at the end of Q4, which is when they were starting Canadian cars, and about to start 60kWh production. So the phenomenon is associated with end of quarter/and new production types (Multi-Coat Red deliveries started on April 1st).

What we are seeing now is something similar. We are near the end of the quarter, and we have a new production type (European Spec) that should be more disruptive than Multi-Coat Red was. Only instead of the disruption happening in the last week of the quarter, it is already apparent just two weeks into June.

I don't know the actual process involved that determines why Tesla has large discontinuities at end of quarter/new production points. But they exist, and once you understand that it's easier to interpret the data we do have.

Going off of memory, we started at ~7,700 delivered cars at the beginning of Q2. We were up to ~9,250 at the beginning of May, so ~1,500 deliveries for April. Then at the beginning of June we are getting close to 11,000. But after ~11,400 or so, we have like 2 data points around 11,700 and 12,000, then a huge skip to production at the 13,000 level, with serial reports after that. Assuming that there were many cars at all produced between 11,400 and 13,000 is a very iffy proposition. Even more so for anything in the gap between the datapoints at ~12,000 and ~13,000.

Given these obvious problems you need to fall back to analysis based on common sense, known production rates, and a hefty dose of guessing. From the data we see end of month clustering right around 14,000. Data up to ~11,400 is solid, which gives us 400-500 cars. Data between 13,000 and 14,000 is where we appear to be, with nice progression. That's like 1,500 cars that we have solid (or solidly projected) data for. Our natural production rate of 400 cars/week would get us to something like 1,700 cars for June. We have a couple of data points at ~11,700 and ~12,000 that indicate a couple of hundred cars could have been squeezed in there, with maybe still some unused blocks.

Combined with April and May, we easily get to the promised ~4,500-4,700 delivered cars (after removing 100 loaners) based on solid data and extrapolation, while acknowledging the current existence of large unused blocks of VIN's. Making a blind assumption that those VIN's have actually been delivered just lacks any foundation.

As to the cars being produced for Europe, we don't know where they are yet. Tesla could easily get 420 of them by working an extra Saturday every week at their current production rate of 80 units/day, which again is right in line with guidance. And as to the gaps, those will likely start to be filled in starting in July.

Back to why? Honestly, Tesla just might like to mess with our heads.
 
So there are no significant gaps between 8000 and 10'000. They were well documented back then:
https://docs.google.com/spreadsheet/ccc?key=0AgGtU6wnKp4CdDZKcGpwWkFqa1l5RjRwdTd2blNzOVE#gid=0

Then I went through the various threads, and tried gather other VINs between 10'000 and 14'000 to try and find gaps. Here are the 10 largest potential gaps. If you have, or know of a VIN in any of these ranges, please reply to this thread (first 3 numbers should be fine).

12144 -> 12805: 661
9808 -> 10357: 549
13435 -> 13812: 377
11711 -> 12061: 350
11380 -> 11711: 331

9555 -> 9808: 253
10357 -> 10600: 243
11141 -> 11380: 239
9332 -> 9555: 223
10647 -> 10843: 196

I have VIN 10756
 
It's all about labor costs. To set up a second shift on the same line there are two options:
1. Use the same people from first shift, but give them overtime. But this still isn't enough man power, so you need to hire temp labor. Overtime + temp labor is very, very pricey. No way to reach 25% margin with this approach.
2. Hire another shift worth of people. But this is basically doubling the workforce and requires a massive amount of work to hire and train people. I would imagine you keep 1/2 your people on shift #1 and move 1/2 your people to shift #2. Then, you'd hire 1/2 more new people for shift #1 and 1/2 more new people for shift #2. It would take some time for the new people to get up to speed. And there's no easy way to do 1/2 shift. It's either 1 shift (with 1 shift of workers) or 2 shifts (with 2 shifts of workers). To do 1.5 shifts is extremely difficult and I think it would require the 1 shift of workers plus overtime and temp labor.

All in all, it's easiest to just focus on 1 shift on 1 line and max out efficiency. Once you reach 25% gross margin with this, then you launch your second shift on the same line by basically doubling your workforce. But then your volume output jumps from 20k units a year to 40k units a year. Thus, this is why Elon has been forecasting 20k units (now 21k) in 2013 and 35k+ in 2014.

Lastly, my hunch is that the 20k units for one shift (one line) isn't exactly fixed. I think it's a bit flexible and they probably do a bit more on one shift and keep 25% margin (maybe up to 24k annual run-rate on one shift?).

They are currently hiring for the swing shift (5:00 PM to 3:30 AM)
Example: Careers | Tesla Motors
 
Based on 100M delivery of Model S cells from Panasonic (link in battery thread), I can come up with following number of total pack development to get a rough idea on # of Model Ss being built.

100000000 Cells
60% 85kw - 7700 cells
40% 60kw (includes 40kw) - 5600 cells

Calculation shows Tesla built around 14500 cells if no cell is wasted. To be a bit precise, the number should reflect the end of month battery pack tally. Rewind 4-6 weeks and you still get ~13000+ Model S built.