General Discussion: 2018 Investor Roundtable

[ValueAnalyst]

I'm not speaking to that. I'm pointing out that 7 months the new schedule target equates to 17 months ahead of the original model 3 schedule.

Sorry, which new schedule? v1? v2? v2017.50? are you talking about run-rate or total? which circle of hell are we in?

 

[ValueAnalyst]

@Reciprocity, @Xenius,
Based on my calculation, Tesla will hit 200K on April 6st, 2018. Based on my interpretation of insideevs' numbers, the date is April 15th, 2018.

Thank you for this!

 

[Knightowl]

I was soo hoping to see a price drop to $280's/share so I could increase my holding on the cheap, guess that wont be happening doh!

 

[Buddyroe]

Your Homework

No, I am not asking about 2020. I am asking about the original production plans for 2017 and 2018 BEFORE Tesla started taking deposits and then accelerated the schedule. I'm talking about where Tesla is today, and where they originally said they would be before the acceleration. The only way to know if Tesla is actually ahead or behind schedule is to know what Tesla originally planned to produce in 2017 and 2018 (before the acceleration). This has been the only evidence of the "original" plan for 2017 and 2018 that I have been able to find. This is an article from May 2016.

"In the past three months, Tesla has told suppliers the company was DOUBLING ITS ORIGINAL PRODUCTION PROJECTIONS TO 100,000 MODEL 3S IN 2017 and 400,000 in 2018, several supplier industry executives familiar with the plans told Reuters."

My Homework

So, based on that, the original plan was to build 50k M3s in 2017 - so they are actually late, even on their original plan - not 17 months ahead.

Original plan:
2017 - 50,000 (actually produced ~2700)
2018 - 200,000 (using an estimate of 1200 avg per week Q1, 2000 Q2, and 3500 for remainder of year, that's ~132,600)

Accelerated plan:
2017 - 100,000 (actually produced ~2700)
2018 - 400,000 (~132,600)


You can't possibly say Tesla is ahead on the original 2020 plans because you have NO IDEA when they will produce 500,000 M3s in a 12 month period. No possible way. But what we DO know is that Tesla is behind even on the original production plans for 2017 and 2018, before the acceleration. And WAY behind on the accelerated projections.

 

[Reciprocity]

Sorry, which new schedule? v1? v2? v2017.50? are you talking about run-rate or total? which circle of hell are we in?

The original pulling forward of model 3 and Gigafactory mass production by 18 months. Actually just 11 months ahead of that original schedule, depending on what you call mass production, lets say for lack of a clear definition, lets say 4k/W or 200,000 model 3s per year.

 

[Hogfighter]

No, I am not asking about 2020. I am asking about the original production plans for 2017 and 2018 BEFORE Tesla started taking deposits and then accelerated the schedule. I'm talking about where Tesla is today, and where they originally said they would be before the acceleration. The only way to know if Tesla is actually ahead or behind schedule is to know what Tesla originally planned to produce in 2017 and 2018 (before the acceleration). This has been the only evidence of the "original" plan for 2017 and 2018 that I have been able to find. This is an article from May 2016.

"In the past three months, Tesla has told suppliers the company was DOUBLING ITS ORIGINAL PRODUCTION PROJECTIONS TO 100,000 MODEL 3S IN 2017 and 400,000 in 2018, several supplier industry executives familiar with the plans told Reuters."

My Homework

So, based on that, the original plan was to build 50k M3s in 2017 - so they are actually late, even on their original plan - not 17 months ahead.

Original plan:
2017 - 50,000 (actually produced ~2700)
2018 - 200,000 (using an estimate of 1200 avg per week Q1, 2000 Q2, and 3500 for remainder of year, that's ~132,600)

Accelerated plan:
2017 - 100,000 (actually produced ~2700)
2018 - 400,000 (~132,600)


You can't possibly say Tesla is ahead on the original 2020 plans because you have NO IDEA when they will produce 500,000 M3s in a 12 month period. No possible way. But what we DO know is that Tesla is behind even on the original production plans for 2017 and 2018, before the acceleration. And WAY behind on the accelerated projections.

Why is it so important?

They originally built the S line to handle 20k units/year, as that was all the demand they thought they'd have. They were wrong about that....do you want to crucify them for that as well?

I own a business. One makes educated guesses as to the future, but that's all they are...guesses. They certainly aren't promises. Elon even said himself that moving up the 3 timeline 2 years would be impossible.

 

[dc_h]

Long post, worth the read. One thought I had on this is a bit facetious - but hear me out: I'm wondering if this behavior Tesla is going against their mission of advancing the world's transition to sustainable transport and plays into a game plan of establishing a monopoly market of EVs.

Think about it: if you are an incumbent of the existing old industry, you will look at these numbers and say "see! I told you! Tesla can't ramp, this stuff is hard. Also, Tesla is not profitable, so we don't need to invest into our EVs". This might lead to others kicking the can down the road a bit more (this is the story I read in many forums that are close to the incumbent industry).
If Tesla would have guided a delivery of zero M3 - the story would be "OMG! Look at these Model S / Model X numbers. And now look at this M3 - they already delivered thousands of these cars!"

I'm honestly pretty surprised that Tesla is allowed to act without any competition in the luxury market and they can take market share as they please with an essentially "not fresh any longer" Model S+X.

I mean this is classic "0 to 1" / "blue ocean" stuff. I know that Elon Musk and Peter Thiel both worked at Paypal. But I'm amazed the others let this happen. And stories like these delivery numbers (intentionally or not) support the creation of a luxury market EV monopoly.

It is surprising on one level that not a lot of serious competition has showed up. Germany is pushing their auto industry to move, but they are doing so at a controlled rate. The Leaf is doing ok and Nissan keeps pushing the tech slowly forward and the Bolt is a good compliance car, not profitable, but not something normal buyers would swoon over. Only China is rushing headlong into this space and they intend to dominate the world EV market. They will transform the market, but Tesla will be profitable and continue to grow based on their branding, visionary engineering and excellent design aesthetic.
The non surprising part is that the legacy manufacturers basically have to acknowledge that all of the intellectual property is worthless, including thousands of years of engineering knowledge. It is the innovators dilemma. Kodak didn't die because they didn't see digital coming, they just couldn't move stakeholders over the chasm from analog to digital. How many engineers in Detroit are pounding on their buddies to join the dark side and go electric, and ruining barbecues to badger their coworkers and families to change now, before it is too late. This stuff is religion to Elon and his team and devil worship to a transmission engineer. How does a CEO remove obstacles to change, when one of those obstacles is fear of career obsolescence. How does a CEO convince stockholders that they need to migrate 90% of their future investments to EV from ICE and make the HR changes to go along with these changes?

 

[schonelucht]

Your Homework

That doesn't show at all them being ahead by 17 months. That just says the plan for 500k/year was moved from 2020 to 2018 but since we don't actually know when they will hit 500k/year we don't know how much behind or ahead they will be with regards to the schedule you mentioned.

Here is something from that 'original' schedule we can assess. Elon said a few weeks before the shareholder letter you quote :

So, when are deliveries? Well, they're next year. So (applause) So, I do feel fairly confident that it will be next year (laughter).

On the main screen behind him a large projected text said "Deliveries begin at the end of next year". So correct would be to say they are on the schedule. With the caveat that they are not on schedule for the most exciting promise : the most amazing car at a $35k price point. But still, I think it is reasonably to give Tesla some leeway here. But if the $35k car is not available before Q3 then I would say they missed the boat even on this 'original' schedule.

But! (there is always a second but, isn't there?) The schedule on the reveal wasn't the original schedule at all. No sir. To find traces of the original schedule we need to go back all the way to 2011. Here is what @doug (I am sure you know there is no doubting his credentials) posted on this very forum

Would really like to encourage folks to include a relevant quote or at least a comment on what is beyond links.

Tesla CEO: Model X SUV to Be Unveiled in 2011, $30K Car in 4 Years

(the link is long gone). But he did quote the relevant paragraph from the article

Palm Springs, California — Even though Tesla’s second electric vehicle the Model S is still about two years away from the market, Tesla CEO Elon Musk laid out the company’s road map for two more new electric cars at the Cleantech Investor Summit in Palm Springs, California on Wednesday. Tesla will unveil the Model X SUV, which will be “cooler” than any SUV or minivan on the market, later this year, said Musk, and in about four years will have developed a truly “mainstream” car that will cost $30,000.

Based on that schedule, arguably much more original than the one you came up with. The plan was to bring out the model 3 in 2015. So really, Tesla is a full 24 months late on their original original schedule for the model 3.

 

[schonelucht]

If I remember correctly, they had been running 3 shifts using overtime on the S&X lines but are back to 2, yet are 30% over last year, right? Can S&X production be increased another 30% this year by adding a dedicated 3rd shift production?

According to management, Model S and X production can be increased fairly easily by throwing more manpower at it since it isn't as heavily automated. So they could increase production if they'd like. The issue they are running in today is that they have a shortage in the labour pool and can't find the necessary employees. Both in Fremont and Nevada. It's no coincidence that Elon himself did his HR part by tweeting job opportunities yesterday. So I don't see it likely that they will start a 3rd shift any time soon. Maybe in the second half of the year when Model 3 ramp stable.

 

[scaesare]

No, I am not asking about 2020. I am asking about the original production plans for 2017 and 2018 BEFORE Tesla started taking deposits and then accelerated the schedule. I'm talking about where Tesla is today, and where they originally said they would be before the acceleration. The only way to know if Tesla is actually ahead or behind schedule is to know what Tesla originally planned to produce in 2017 and 2018 (before the acceleration). This has been the only evidence of the "original" plan for 2017 and 2018 that I have been able to find. This is an article from May 2016.

"In the past three months, Tesla has told suppliers the company was DOUBLING ITS ORIGINAL PRODUCTION PROJECTIONS TO 100,000 MODEL 3S IN 2017 and 400,000 in 2018, several supplier industry executives familiar with the plans told Reuters."

My Homework

So, based on that, the original plan was to build 50k M3s in 2017 - so they are actually late, even on their original plan - not 17 months ahead.

Original plan:
2017 - 50,000 (actually produced ~2700)
2018 - 200,000 (using an estimate of 1200 avg per week Q1, 2000 Q2, and 3500 for remainder of year, that's ~132,600)

Accelerated plan:
2017 - 100,000 (actually produced ~2700)
2018 - 400,000 (~132,600)


You can't possibly say Tesla is ahead on the original 2020 plans because you have NO IDEA when they will produce 500,000 M3s in a 12 month period. No possible way. But what we DO know is that Tesla is behind even on the original production plans for 2017 and 2018, before the acceleration. And WAY behind on the accelerated projections.

I'm not sure why this is so hard. As per their 5/4/16 Investor Letter:

Advancing Build Plan

We are on track to achieve volume Model 3 production and deliveries in late 2017. Of course, in order to meet that timeframe, we will be holding both ourselves and our suppliers accountable to be ready for volume production in advance of that timing.

Additionally, given the demand for Model 3, we have decided to advance our 500,000 total unit build plan (combined for Model S, Model X, and Model 3) to 2018, two years earlier than previously planned. Increasing production five fold over the next two years will be challenging and will likely require some additional capital, but this is our goal and we will be working hard to achieve it.

They originally planned on 500K combined vehicles in 2020. Given that S/X have been ramping upwards and are already over 100K units a year, that implies less than 400K Model 3's in 2020.

They then said they would move up that 500K goal to 2018. (Two years earlier, for those playing at home). Elon also gave a projected ramp of 5K/week exiting 2017 and 10K/wk exiting 2018. That would seem to jive with the <400K Model 3's that would be needed to hit the accelerated 2018 goal.

So, if the current exit rate of ~1K/week at end of 2017 is deemed to be 7 months late for the accelerated 2018 goal, it's 17 months ahead of the original 2020 goal, no?

 

[Reciprocity]

I'm not sure why this is so hard. As per their 5/4/16 Investor Letter:



They originally planned on 500K combined vehicles in 2020. Given that S/X have been ramping upwards and are already over 100K units a year, that implies less than 400K Model 3's in 2020.

They then said they would move up that 500K goal to 2018. (Two years earlier, for those playing at home). Elon also gave a projected ramp of 5K/week exiting 2017 and 10K/wk exiting 2018. That would seem to jive with the <400K Model 3's that would be needed to hit the accelerated 2018 goal.

So, if the current exit rate of ~1K/week at end of 2017 is deemed to be 7 months late for the accelerated 2018 goal, it's 17 months ahead of the original 2020 goal, no?

I agree.. but "What Difference, at this Point, Does it Make!". Sorry if its too soon for Hillary supporters, I could not resist.

 

[dc_h]

That doesn't show at all them being ahead by 17 months. That just says the plan for 500k/year was moved from 2020 to 2018 but since we don't actually know when they will hit 500k/year we don't know how much behind or ahead they will be with regards to the schedule you mentioned.

Here is something from that 'original' schedule we can assess. Elon said a few weeks before the shareholder letter you quote :



On the main screen behind him a large projected text said "Deliveries begin at the end of next year". So correct would be to say they are on the schedule. With the caveat that they are not on schedule for the most exciting promise : the most amazing car at a $35k price point. But still, I think it is reasonably to give Tesla some leeway here. But if the $35k car is not available before Q3 then I would say they missed the boat even on this 'original' schedule.

But! (there is always a second but, isn't there?) The schedule on the reveal wasn't the original schedule at all. No sir. To find traces of the original schedule we need to go back all the way to 2011. Here is what @doug (I am sure you know there is no doubting his credentials) posted on this very forum

(the link is long gone). But he did quote the relevant paragraph from the article

Based on that schedule, arguably much more original than the one you came up with. The plan was to bring out the model 3 in 2015. So really, Tesla is a full 24 months late on their original original schedule for the model 3.

Great information. I think having a good historical understanding of the goals and how they have evolved is great. Doing so in a factual and non confrontational way is awesome. I think this type of information sharing can temper some overly bullish and bearish feelings. Elon being late is not going to put Tesla out of business, but he is late and it does push other timelines to the right as well. It also makes $600 a share in 2018, a gimme by some earlier estimates on the board, less likely.
I love the company and the mission and keeping realistic expectations means understanding past progress and having some perspective.

 

[Buddyroe]

I'm not sure why this is so hard. As per their 5/4/16 Investor Letter:



They originally planned on 500K combined vehicles in 2020. Given that S/X have been ramping upwards and are already over 100K units a year, that implies less than 400K Model 3's in 2020.

They then said they would move up that 500K goal to 2018. (Two years earlier, for those playing at home). Elon also gave a projected ramp of 5K/week exiting 2017 and 10K/wk exiting 2018. That would seem to jive with the <400K Model 3's that would be needed to hit the accelerated 2018 goal.

So, if the current exit rate of ~1K/week at end of 2017 is deemed to be 7 months late for the accelerated 2018 goal, it's 17 months ahead of the original 2020 goal, no?

So you chose to ignore the original projection of 50k M3s in 2017? I ask because you did not address it.

 

[Starno]

So today I liquidated my position into NFLX, and now I'm full TSLA,AMAZN, FB. (70/15/15, though).

Those are the only 3 companies I'm confident for the next 10 years.

 

[Troy]

But what are they at as of the end of Q4 2017?

I'm calculating 162,967 S/X/3 at the end of 2017. The count starts on 1st Jan 2010. My guess is, Tesla sold 590 Roadsters after this date in the USA. So, the total with the Roadster is 163,557. If you check out insideevs numbers, it shows 159,671 for the S/X/3. With the 590 Roadsters, that's 160,261. I expect 13,100 S/X deliveries in Q1 in the US and 19,928 Model 3 deliveries.

My 2018 global Model 3 delivery estimates:
Q1 19,928
Q2 42,898
Q3 66,332
Q4 82,807
2018 Total: 211,965

 

[scaesare]

I agree.. but "What Difference, at this Point, Does it Make!". Sorry if its too soon for Hillary supporters, I could not resist.

It honestly doesn't to me. I was just providing some context for @Buddyroe 's estimate.

 

[Oil4AsphaultOnly]

Sorry if this was already mentioned and discussed, but I can't keep up with the pace of this thread and just wanted to contribute my research.

Tesla has now sold ~150k cars domestically (+/- 1k - Tesla Model S US car sales figures ; Tesla Model X US car sales figures), and are on pace to deliver 20-25k in Q1 (~15k S+X, and the rest model 3's). That leaves about 25-30K for Q2 deliveries before hitting the 200k threshold. If they had stuck to their target ramp of 5k/w for the end of Q1, they would've delivered ~40k in Q1, meaning they'll hit 200k in the middle of Q2.

I'm willing to bet that the choice to delay the ramp rate is a wink/nod at hitting 200k in July 1st. Bad news for me is that Canadian reservation holders might get their model 3's before me!

 

[2virgule5]

@Reciprocity, @Xenius,
Based on my calculation, Tesla will hit 200K on April 6th, 2018. Based on my interpretation of insideevs' numbers, the date is April 15th, 2018.

Thanks. May I ask what was the number of M3 you took into consideration for this date? S/X is comparatively easier to guesstimate but clearly the driving factor is M3 delivered.
My calculation is, if we enter 2018 with 162k US deliveries, that we may reach it the second week of May using my slightly pessimistic WAG of M3 shown here: General Discussion: 2018 Investor Roundtable

Edit: as implied by previous poster, if total US deliveries entering were indeed close 150k then there is a small but possible shot at achieving US car #200001 July 1st which would take a higher proportion of international deliveries of S/X.

Edit2: you guys are obviously posting way faster than what I can read/write ;-)

 

[Zaxxon]

I'm willing to bet that the choice to delay the ramp rate is a wink/nod at hitting 200k in July 1st. Bad news for me is that Canadian reservation holders might get their model 3's before me!

Yes, it's been discussed (immediately before your post, even), and no, July 1st is not happening. Tesla will hit 200k US in Q2 2018. Bank on it. It's a given. They're going to be very close at the end of Q1 but I imagine they will ensure they don't hit it then. I agree with Troy and my own estimates have them hitting it in April. They could feasibly alter shipping to move that a bit, but not all the way to July without seriously screwing up Q2.

 

[Reciprocity]

Sorry if this was already mentioned and discussed, but I can't keep up with the pace of this thread and just wanted to contribute my research.

Tesla has now sold ~150k cars domestically (+/- 1k - Tesla Model S US car sales figures ; Tesla Model X US car sales figures), and are on pace to deliver 20-25k in Q1 (~15k S+X, and the rest model 3's). That leaves about 25-30K for Q2 deliveries before hitting the 200k threshold. If they had stuck to their target ramp of 5k/w for the end of Q1, they would've delivered ~40k in Q1, meaning they'll hit 200k in the middle of Q2.

I'm willing to bet that the choice to delay the ramp rate is a wink/nod at hitting 200k in July 1st. Bad news for me is that Canadian reservation holders might get their model 3's before me!

I think your missing some cars as the referenced links do not go back farther then 2014.. I believe Troy's numbers are more accurate, so mid Apr is probably more like it:

I'm calculating 162,967 S/X/3 at the end of 2017. The count starts on 1st Jan 2010. My guess is, Tesla sold 590 Roadsters after this date in the USA. So, the total with the Roadster is 163,557. If you check out insideevs numbers, it shows 159,671 for the S/X/3. With the 590 Roadsters, that's 160,261. I expect 13,100 S/X deliveries in Q1 in the US and 19,928 Model 3 deliveries.

My 2018 global Model 3 delivery estimates:
Q1 19,928
Q2 42,898
Q3 66,332
Q4 82,807
2018 Total: 211,965