CNBC Manufacturing and Quality Control Issues Article

[lapolak]

Not sure if this has been discussed somewhere yet, but CNBC has a rather alarming article about the production issues Tesla is facing.

A bit hard not to gulp at such reports when considering dropping 56k versus buying a used CPO ICE car...

Tesla employees say automaker is churning out a high volume of flawed parts requiring costly rework

What do you all think?

 

[SteveG3]

While I don't know about this story, the author of the story in the past when writing about Tesla has been known to

- use as a source a person (Mark Spiegel) with a many years long track record of Tesla pronouncements with the credibility of the National Enquirer,

- repackage old information as if new in a sensationalist and alarmist manner.

- among other not-journalism practices I do not have time to look back over and list here at the moment

May or may not be what's going on this time, but, the track record of the author is worth considering.

 

[techmaven]

CNBC walking right up to the line of stock market manipulation and using their bully pulpit for nefarious reasons? Maybe?

If you really pull apart that article and examine the various parts, it is really built from nothing. The most inflammatory make no sense and are sourced anonymously. She throws in some other stuff, completely conflating new vehicle rework from the line versus remanufacturing in a bizarre middle section. Of course, Tesla's denials are mostly glossed over... what else can the company say? Their critics wouldn't believe them anyways.

 

[mnuser]

"May or may not be what's going on this time, but, the track record of the author is worth considering"

First time poster...long time lurker, so take that for what it is worth. Per your suggestion, I did take a look at the author - Lora Kolodny's - background - WSJ, NYT - I think the fair criticism would be that she is a tech reporter so does not have the background to deeply cover the manufacturing challenges. To say she is a hack (which was the inference) w/out evidence seems drastic.

 

[juanmedina]

"May or may not be what's going on this time, but, the track record of the author is worth considering"

First time poster...long time lurker, so take that for what it is worth. Per your suggestion, I did take a look at the author - Lora Kolodny's - background - WSJ, NYT - I think the fair criticism would be that she is a tech reporter so does not have the background to deeply cover the manufacturing challenges. To say she is a hack (which was the inference) w/out evidence seems drastic.

No sources... She is a hack.

 

[techmaven]

"May or may not be what's going on this time, but, the track record of the author is worth considering"

First time poster...long time lurker, so take that for what it is worth. Per your suggestion, I did take a look at the author - Lora Kolodny's - background - WSJ, NYT - I think the fair criticism would be that she is a tech reporter so does not have the background to deeply cover the manufacturing challenges. To say she is a hack (which was the inference) w/out evidence seems drastic.

You apparently haven’t taken a good look at either this article nor her previous articles.

 

[SteveG3]

"May or may not be what's going on this time, but, the track record of the author is worth considering"

First time poster...long time lurker, so take that for what it is worth. Per your suggestion, I did take a look at the author - Lora Kolodny's - background - WSJ, NYT - I think the fair criticism would be that she is a tech reporter so does not have the background to deeply cover the manufacturing challenges. To say she is a hack (which was the inference) w/out evidence seems drastic.

You apparently haven’t taken a good look at either this article nor her previous articles.

Yes, though I wouldn't use the term "hack", indeed, previous articles have ample evidence supporting what I said was in those articles.

What's more, apparently mnuser has not looked at the WSJ and NYT's coverage of Tesla over the years.

If you like, with the NY Times you can start with a google search for John Broder, with the WSJ, you can search for a tweet Elon sent within the last few months about the years long negativity pumped out about Tesla (about 98% sure the tweet was in reference to WSJ, but, was not able to find it and 100% confirm in the very brief amount of time I have available to look at the moment).

 

[psumarkopolo]

So this is fair. In terms of not showing Tesla's denial of the issue, does Tesla have sufficient credibility to denounce the allegations? Also you need to take into account that the only people that WILL know about an issue would be the folks who have recently left the company (VP Fin, and CAO) who probably it is in their best interest not to talk. Fired employees will be seen as sour grapes by reporters. And current employees who if they did go on record would be fired. Not saying they should be seen as gospel tellers, but there is a reason it is thinly sourced.

In regard to the story, it is pretty apparent that the minor "defect" rate on Tesla's right now is up probably around 20% + ? What is major defect %? Maybe 2-3%? Are they higher? Please note, that something that would require a software update to enhance would not be an upgrade. I.e. SW to make wipers turn on auto. But SW update to control radio from blaring would be a 'defect' as i see it. Albeit a minor one, as it costs probably less than $100 for Tesla to fix. A major defect would be something where they would have to have a truck roll with a tech to your house.

Lastly, as someone who does not own a Tesla, and is not big into cars, but is interested in Manufacturing and system engineering, if these cars were at the ~20-25K price point, do we think that that the issues would not be as reported on? Probably more right? I.E. most folks on the TMC like myslef are able to afford 2-3 vehicles and if one craps out for the day, you just take the next one. Breakdowns are not miss work type activities. Just food for thought.

 

[erthquake]

So this is fair. In terms of not showing Tesla's denial of the issue, does Tesla have sufficient credibility to denounce the allegations?

Yes, Tesla definitely has that credibility. Musk is rather forthcoming when they are battling production issues. The (lack of) credibility issue, however, lies with Lora Kolodny. In her article last month, she sourced Mark Spiegel, a known zealot short who knows nothing about auto manufacturing. Every one of her CNBC articles have been clear hit pieces with no objectivity.

 

[bro1999]

Yes, Tesla definitely has that credibility. Musk is rather forthcoming when they are battling production issues. The (lack of) credibility issue, however, lies with Lora Kolodny. In her article last month, she sourced Mark Spiegel, a known zealot short who knows nothing about auto manufacturing. Every one of her CNBC articles have been clear hit pieces with no objectivity.

I think there is enough of a track record on Elon to conclude he is not the most credible person either.
As far as this Lora person....what has she written that has proven to be unequivocally false? Because she included material sourced from a known Tesla short? Just because someone is a short doesn't mean everything they say is a bunch of lies.

 

[psumarkopolo]

Erthquake thanks for the response. IN the article, she clearly states Mark is short the company. And everything he says is pretty well documented. Do you think Tesla was manufacturing 1,000 units/ week in December? Do you believe they will hit at least 14.5K this quarter? (which would be minimum to hit his projections). DO you think they even hit 12k for the quarter?

 

[ℬête Noire]

A bit hard not to gulp at such reports when considering dropping 56k versus buying a used CPO ICE car...

?????

I find myself gulping trying to swallow the jump to this conclusion.

Frankly I'm not even sure why this thread is here instead of Tesla, Inc. ?

 

[erthquake]

Erthquake thanks for the response. IN the article, she clearly states Mark is short the company. And everything he says is pretty well documented. Do you think Tesla was manufacturing 1,000 units/ week in December? Do you believe they will hit at least 14.5K this quarter? (which would be minimum to hit his projections). DO you think they even hit 12k for the quarter?

You're conflating credibility regarding two different issues: production targets and quality of production. Tesla is absolutely credible when talking about the quality of the cars delivered to customers. Predicting the production rate ramp is very difficult, so we all should take timing of production targets with a grain of salt.

Whether they hit 8k or 14k production this quarter is immaterial to the long term success of the company. They will continue to increase their production rates. I believe they'll achieve 5k/week by June/July.

Edit: To add further, Tesla never said they were producing 1k per week in December. They said parts of their line achieved burst rates that would extrapolate to 1k/week.

That lack of distinction on your part calls into question your ability objectively review Kolodny's work. Frankly it's the same sort of distortion that Spiegel uses for his "documentation."

 

[psumarkopolo]

I would normally agree with you erth. But you are saying that Tesla has credibility more so than Evan Spiegel. I am telling you that, Elon's public statements he is not omniscient. He acts as though he is "Definitely 6 months of Autonomous" etc.

I want Tesla to succeed. I think they are responsible for a lot of the innovations in the automotive sector. I think Elon should bring in a more competent CEO however. He should be CSO or something like CTO in my opinion.

 

[erthquake]

I would normally agree with you erth. But you are saying that Tesla has credibility more so than Evan Spiegel. I am telling you that, Elon's public statements he is not omniscient. He acts as though he is "Definitely 6 months of Autonomous" etc.

I want Tesla to succeed. I think they are responsible for a lot of the innovations in the automotive sector. I think Elon should bring in a more competent CEO however. He should be CSO or something like CTO in my opinion.

See my edit above.

 

[psumarkopolo]

You're conflating credibility regarding two different issues: production targets and quality of production. Tesla is absolutely credible when talking about the quality of the cars delivered to customers. Predicting the production rate ramp is very difficult, so we all should take timing of production targets with a grain of salt.

Whether they hit 8k or 14k production this quarter is immaterial to the long term success of the company. They will continue to increase their production rates. I believe they'll achieve 5k/week by June/July.

Edit: To add further, Tesla never said they were producing 1k per week in December. They said parts of their line achieved burst rates that would extrapolate to 1k/week.

That lack of distinction on your part calls into question your ability objectively review Kolodny's work. Frankly it's the same sort of distortion that Spiegel uses for his "documentation."

Burst rate is not a quote within their earnings call. or 10k, nor is extrapolate used in that regard. Can you provide source material?

 

[erthquake]

Burst rate is not a quote within their earnings call. or 10k, nor is extrapolate used in that regard. Can you provide source material?

It's in their Jan 3 delivery report letter.

"...we hit a production rate on each of our manufacturing lines that extrapolates to over 1,000 Model 3's per week."

Tesla Q4 2017 Vehicle Production and Deliveries (NASDAQ:TSLA)

 

[psumarkopolo]

ok, so production rate... is their current production rate. So in an exponential curve it should not go down...Remember how elon says we cannot think exponentially? So that is what i am saying on Jan 1 production rate >1,000 units per week (even if they didn't hit it in Dec). So no week should do less than 1,000 (ok the unplanned shutdown in Feb we will subtract 1 week).

Nowhere in there is a "Burst" production rate.

 

[erthquake]

ok, so production rate... is their current production rate. So in an exponential curve it should not go down...Remember how elon says we cannot think exponentially? So that is what i am saying on Jan 1 production rate >1,000 units per week (even if they didn't hit it in Dec). So no week should do less than 1,000 (ok the unplanned shutdown in Feb we will subtract 1 week).

Nowhere in there is a "Burst" production rate.

"Extrapolates" is their burst rate in that it's not a sustained rate.

If you bothered to read the letter, the whole sentence reads, "In the last seven working days of the quarter, we made 793 Model 3's, and in the last few days, we hit a production rate on each of our manufacturing lines that extrapolates to over 1,000 Model 3's per week."

So NO! They did not product 1000 in any week, nor have they said they did.

But you accomplished your goal of bumping a FUD thread with your newly created day-old account. I will no longer comment on this thread as your posts have confirmed my suspicions. I'm recommending to the mod that this be moved to Tesla, Inc..

 

[bro1999]

You're conflating credibility regarding two different issues: production targets and quality of production. Tesla is absolutely credible when talking about the quality of the cars delivered to customers. Predicting the production rate ramp is very difficult, so we all should take timing of production targets with a grain of salt.

Whether they hit 8k or 14k production this quarter is immaterial to the long term success of the company. They will continue to increase their production rates. I believe they'll achieve 5k/week by June/July.

Edit: To add further, Tesla never said they were producing 1k per week in December. They said parts of their line achieved burst rates that would extrapolate to 1k/week.

That lack of distinction on your part calls into question your ability objectively review Kolodny's work. Frankly it's the same sort of distortion that Spiegel uses for his "documentation."

What was the point of them stating they were able to achieve a "burst rate" of 1,000 cars per week then? Could have just stated "we have achieved a 500/600/whatever build rate, and are on track for 2,500 by end of Q1..." or something like that. Only reason to state the 1,000 "burst rate" is the give the impression they were building 1k a week.

I can post a "burst rate" of a sub-3 hour marathon. That really doesn't mean jack though in the large scheme of things.