Conservative expected production and delivery of 5,000 Tesla Model S EV's in Q2 2013?

[Benz]

Tesla Motors, Inc. – First Quarter 2013 Shareholder Letter:

Outlook

[FONT=Arial,Arial][FONT=Arial,Arial]"While we expect to build about 5,000 Model S vehicles in Q2, some cars will be in transit to Europe for start of deliveries in Q3. As a result, we expect to deliver slightly over 4,500 vehicles during Q2, all in North America. For the full year of 2013, we expect to exceed our prior target of 20,000 worldwide deliveries and feel comfortable raising guidance to about 21,000 deliveries."
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Do they want to "surprise" us again by producing more than they expected (just like in Q1 2013)?

At a rate of 500 per week, they should be producing 6,500 in Q2 2013.

Your thoughts please.

 

[nikwest]

The production for the European cars won't be going so smooth initially I guess. I know that the factory has been halted for a week to get all the tooling for European cars in place a couple of weeks ago.

 

[yngwie_2012]

You mean the factory in Tilburg?? Where did you read that?

 

[Benz]

The production for the European cars won't be going so smooth initially I guess. I know that the factory has been halted for a week to get all the tooling for European cars in place a couple of weeks ago.

What more can you tell us about this?

So, have they all the tooling in place now?
Have they finished doing that?

 

[nikwest]

Somebody from Tesla told me. And it also was mentioned in one of the posts talking about factory visits. I don't know if everything is in place now though. I sure hope so.

 

[Benz]

Somebody from Tesla told me. And it also was mentioned in one of the posts talking about factory visits. I don't know if everything is in place now though. I sure hope so.

Well, in the past 11 months they must have figured out how to deal with certain processes in order to create a production process that goes as smooth as possible. Actually they learn every day, and that is good.

I think that it is very well possible that they produce more than 5,000 Tesla Model S EV's.

 

[DonPedro]

From the "risk factors" section of yesterday's SEC filing:

As we are now producing cars at our steady state production volume of 400 vehicles per week, manufacturing costs have started to fall.

500 was peak output achieved with temps and overtime. They need to go with a steady volume to get margins up.

 

[Raffy.Roma]

I didn't know that there is an European Tesla factory. Where is Tilburg? How many Model S produces per week?

 

[CapitalistOppressor]

From the "risk factors" section of yesterday's SEC filing:


500 was peak output achieved with temps and overtime. They need to go with a steady volume to get margins up.

Yes, this was confirmed through VIN data and discussed in the Q1 Production Report thread before the conference call. They have gone 5 weeks in Q2 at the 400/week rate and likely took the first week of Q2 off, giving us an effective production rate of only ~333/week so far. These estimates are all supported by both the 10k filing and current VIN data.

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I didn't know that there is a European Tesla factory. Where is Tilburg? How many Model S produces per week?

It's only a pseudo-factory. Tesla will send over partly complete vehicles and do all of the finishing work at their distribution center there. That said, its not clear exactly how much work is being done. It could be anything from final detailing work to installation of wheels and interior components. I haven't heard the exact details. The basic drivetrain and body need to be built in Freemont. But Tesla already is using European suppliers for their wheels (and possibly other components), so maybe they are just going to install the locally sourced parts to save on shipping them back and forth.

 

[Raffy.Roma]

It's only a pseudo-factory. Tesla will send over partly complete vehicles and do all of the finishing work at their distribution center there. That said, its not clear exactly how much work is being done. It could be anything from final detailing work to installation of wheels and interior components. I haven't heard the exact details. The basic drivetrain and body need to be built in Freemont. But Tesla already is using European suppliers for their wheels (and possibly other components), so maybe they are just going to install the locally sourced parts to save on shipping them back and forth.

I hope that as Model S and Model X orders will ramp up in Europe Tesla will decide to have a true European factory. I think that Europe could be a good market for Tesla also considering Gen III production.

 

[felixtb]

spoke to one of the head mechanics in europe the other day and he said Tilburg is for EU shipments where they will basically ship the car and the battery components separately and install there and in that way reduce import duties from car to spare-parts which is much lower. for the other stuff, for now, all will be done in Fremont which in Claude's 100% of the cars for Norway and at least Switzerland which are European countries that are outside the EU and therefore not subject to this higher duty on completed product import

 

[PhilBa]

Yes, this was confirmed through VIN data and discussed in the Q1 Production Report thread before the conference call. They have gone 5 weeks in Q2 at the 400/week rate and likely took the first week of Q2 off, giving us an effective production rate of only ~333/week so far. These estimates are all supported by both the 10k filing and current VIN data.

If, indeed, weekly production is running at exactly 400/mo with the first week of Q2 being 0, then that extrapolates to (13-1)*400 or 4800 in Q2. It would take an average weekly production of 417 to exceed 500 in Q2 so it's not that far off. If I was an exec at Tesla, I would slightly sandbag the numbers to under-promise/over-deliver. Though, they are claiming 21,000 cars will be produced in 2013 so somewhere they will need to ramp up.

Given that my car will likely be built in the last month of the quarter, I hope they don't have a big push on. To be fair, though, they seem to always do right by the customer.

 

[RandyS]

Tesla Motors, Inc. – First Quarter 2013 Shareholder Letter:

Outlook

[FONT=Arial,Arial][FONT=Arial,Arial]"While we expect to build about 5,000 Model S vehicles in Q2, some cars will be in transit to Europe for start of deliveries in Q3. As a result, we expect to deliver slightly over 4,500 vehicles during Q2, all in North America. For the full year of 2013, we expect to exceed our prior target of 20,000 worldwide deliveries and feel comfortable raising guidance to about 21,000 deliveries."
------------[/FONT][/FONT]
Do they want to "surprise" us again by producing more than they expected (just like in Q1 2013)?

At a rate of 500 per week, they should be producing 6,500 in Q2 2013.

Your thoughts please.

My single data point is that when I went up for the factory tour and to pick up my car on 5/2, they had produced 87 vehicles the day before....The goal was said to be 80...

 

[Doug_G]

spoke to one of the head mechanics in europe the other day and he said Tilburg is for EU shipments where they will basically ship the car and the battery components separately and install there and in that way reduce import duties from car to spare-parts which is much lower. for the other stuff, for now, all will be done in Fremont which in Claude's 100% of the cars for Norway and at least Switzerland which are European countries that are outside the EU and therefore not subject to this higher duty on completed product import

Canadians had been asking them to do that, and they didn't bother, so we got dinged with import duty. :cursing:

 

[Benz]

If, indeed, weekly production is running at exactly 400/mo with the first week of Q2 being 0, then that extrapolates to (13-1)*400 or 4800 in Q2. It would take an average weekly production of 417 to exceed 500 in Q2 so it's not that far off. If I was an exec at Tesla, I would slightly sandbag the numbers to under-promise/over-deliver. Though, they are claiming 21,000 cars will be produced in 2013 so somewhere they will need to ramp up.

That ramp up will then have to be both in Q3 and Q4. To be able to end up with a year total of 21,000 in 2013 they will need to produce 21,000 - (4,900 + 5,000) = 11,100 in the second half of 2013. Assuming that the total for Q2 will be 5,000 indeed.

But my guess would still be that they will produce more than 5,000 in Q2 already. In fact I think that every next Q will have a higher number than the Q before. My guess for the total for 2013 is actually about 24,000 Tesla Model S EV's, because I think that the demand is going to increase significantly in the second half of 2013.

 

[DonPedro]

That ramp up will then have to be both in Q3 and Q4. To be able to end up with a year total of 21,000 in 2013 they will need to produce 21,000 - (4,900 + 5,000) = 11,100 in the second half of 2013. Assuming that the total for Q2 will be 5,000 indeed.

But my guess would still be that they will produce more than 5,000 in Q2 already. In fact I think that every next Q will have a higher number than the Q before. My guess for the total for 2013 is actually about 24,000 Tesla Model S EV's, because I think that the demand is going to increase significantly in the second half of 2013.

During the Goldman visit to the plant, they said that they were focusing a lot on producing a steady volume of cars, but with less and less hours spent per car. That would mean keeping production at the ~415/week for as long as possible. Then they have said two things about the ramp-up: (1) In 2014 they will go from 20k/year on one shift to 40k/year in two shifts. (2) They want to exit the year with a run-rate of 23-24k/year.

Interpreting the latter to mean that Q4 volume will be 6k+ cars makes sense. That rhymes with 5k cars in Q2 and Q3 each. And based on the first infobit, I would assume that they will do the 6k volume using two shifts, starting around Dec 1 (maybe a bit earlier for the rampup).

 

[jeffhre]

Canadians had been asking them to do that, and they didn't bother, so we got dinged with import duty. :cursing:

It had been stated that there was not a high enough NA parts content to qualify for the savings, ie assembling in Canada wouldn't help lower cost.

 

[Benz]

"Currently producing at an annualized rate of more than 25K units (saw a flat panel on the factory tour that indicated 5,454 units produced in the 2nd quarter."

That's what an owner saw himself at a factory tour during the TESLIVE event.

Here is the link: http://teslamodels.wordpress.com/

But how many of these were actually sold to customers (and paid for) and delivered to them as well?