General Discussion: 2018 Investor Roundtable

[mongo]

No reason to delay.

Just send them elsewhere. Canada? Europe?

I'll be happy to take mine anny time

Many will be built for those regions. For the ones built for the US, Tesla can hold off on delivery to ensure the 200k timing. Otherwise, they need to keep production and inventory under the cap.

 

[Todd Burch]

I also wouldn’t be surprised if they’re trying to spread out the deliveries to not max out any one delivery center’s capacity.

That was my thinking. Using 2 localized delivery centers is probably a big bottleneck to delivery. Open it up all over and now you can just ship cars out and let all the stores/service centers deal with deliveries locally.

 

[Ulmo]

Quick note that non-CA owner invites for day-one Model 3 reservation holders are starting to spit out in greater numbers today. There are a few folks chiming in here. I would expect based on the varied locations given that there was a decent-sized non-CA invite batch sent earlier this AM.

I bet Tesla’s comfortable taking it more to that stage now, and it will also offload some of the concentrated LA & SF Bay factory-local deliveries, allowing diversified resources to handle more load, and prime the existing stores for delivering the Model 3.

 

[Ulmo]

Same delima here..........just got the invite, and have always planned on the AWD version Model 3 since we live in very rural Northern Idaho. But it would be nice to be assured of the tax credit this year as well. Given some of the discussions on the board today regarding expected date to reach 200,000 vehicles we may ultimately have to decide between a 2 wheel drive Model 3 or an AWD Model S if we want the tax credit. And the irony is that the only vehicle we need to upgrade on our hobby farm is our pick-up. If the semi truck drawing of the pick-up was real and seated two people up front I would probably just upgrade to that instead.

I really liked the stability of cornering in my AWD Model S in terms of traction and maintaining control, but I hated how it could never coast naturally in any turn or straight, and required constant steering to align, because AWD takes the car too exactly where it’s steered. I liked the AWD handling in snow and ice, with exception of whenever it decided brakes don’t work and it just wouldn’t apply them (as opposed to my Mercedes that braked quite well in awful conditions). AWD is better than rear in winter conditions in my experience.

 

[ggr]

Mod: posts about FB and NVDA moved to "other tech" thread. --ggr.

 

[Bobfitz1]

I think the numbers in the spreadsheet for first half of 2018 is realistic at this point. I think it is hugely optimistic to assume a ramp to 10k/week by the end of 2018. Even Tesla has backpedaled from that projection. I don't honestly know what the projection is for the end of year production rate. Tesla at this point is not guiding for past Q2. I can only guess that it is somewhat above 5,000/week but below 10,000/week. My guess is that it will be closer to 5,000 than 10,000. If production at end of Q2 is 5,000/week, increasing to 6,300/week (my WAG) by end of year, that should allow for a ballpark number of approximately 200,000 Model 3 produced by the end of 2018. That seems like a pretty realistic number to expect at this point, but perhaps it is still optimistic.

I'd submit to those who have posted opinions that once the original production line for cells, battery pack or cars, is fine tuned and working to design capacity, setting up subsequent identical lines should be straightforward and much less time than the first. I thought going from 5,000/wk to 10K/wk was going to happen by building a 2nd production line (or set of sub lines). The design and elements of the second M3 line are known by now and much work could/should have commenced. So if 5K/wk is reached by end of Q2 and assuming (validly IMO) quite a lot of the Line 2 is already in place before that milestone, why can't the second line be brought up to full speed by end of Q4?

This is only a rhetorical question. My point is that some have based very optimistic production, valuation, revenue and profit projections years into the future, on the premise that building follow on production lines very quickly can be taken for granted.

 

[Hogfighter]

Got my email to configure as well. It sounds like a few thousand got the email today. Good news, in that the 'one thousand per week' hypothesis sounds like it's not smoke n mirrors

 

[kbM3]

I want to reiterate that my belief from years back was that Model 3 would not reach production until mid-2018. This was based on prior observations of how long it generally takes to engineer a new car, validate the design, and get the manufacturing line up to speed.

The move up to 2017 was a big surprise to me, and I am not surprised that the ramp has been slow, given the inordinately aggressive timeline.

The problem is not engineering a new car or design. The problem is creating a highly automated way of producing battery packs. Basically, the difficulty lies in Tesla’s goal of reinventing manufacturing, not car design.

I don't care about the competitors. I care about Musk constantly having no idea how long it takes to do anything. Why even make those ridiculous timeline projects in the first place? Why not just say, we're going to release the first cars in July ('17) and we'll know more then about how we think we'll be able to ramp up production.

I'm just SO d@mn sick of him over-promising and under delivering. For once, can we even be close? The Model S, understandable. The X, ridiculous at 2.5 years late. Now the M3, probably not going to make more than 50k this year (at least I have no confidence that it will be more).

Over promising is one of the main keys to Elon’s success.

Shoot for Mars. Fail. Hit the moon and beat everyone else.

I agree it is tough on investors, customers and employees, but it achieves maximum speed.

A "rate" is an instantaneous measurement.

My hose can flow 5 gals/min the moment I turn it on, even if I don't let it flow a full 5 gallons.

Now you can question if the rate is SUSTAINABLE, but they did achieve a 1K/wk rate.

They only stated they hit that for each line. I am interpreting they meant each manufacturing subsystem.

It does not necessarily mean the entire system produced that many units at any point in time. Unless someone knows more than I do?

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

The original from the reveal was to begin deliveries in late 2017. Not to deliver 50k in 2017.

 

[mongo]

They only stated they hit that for each line. I am interpreting they meant each manufacturing subsystem.

It does not necessarily mean the entire system produced that many units at any point in time. Unless someone knows more than I do?

In order to get a valid run rate, they need to run a non-trivial amount of vehicles through. There is likeky nowhere to put the partly completed cars on the line, so it needs to operate end to end.

Where there is some potential for non sequential flow are subasseblies like pack (in Sparks), dash or drive unit. Those could be built and batched.

I would guess they ran a full shift or so to get the rate number.

 

[ValueAnalyst]

See the part I put in bold? If they did this and too many customers received inadequate products, you and all the other shorts would be bitching that Tesla can't make a quality product. So which is it for you?

Except that the car doesn’t seem to have the quality issues X did... everyone who has the car seems to love it, so why cite “quality” to slow down the ramp to 1/4th of its original schedule?

 

[MP3Mike]

Except that the car doesn’t seem to have the quality issues X did... everyone who has the car seems to love it, so why cite “quality” to slow down the ramp to 1/4th of its original schedule?

Because maybe going "slow" is how they have gotten the quality to be as good as it is.

 

[Bobfitz1]

yep, Virginia previous owner here - just got my invite to configure. Decisions, decisions how badly do i want that AWD

Don't forget, dual motor, long range M3s will have the fastest acceleration for the LR pack. May get limited below max possible by Tesla at the outset or until MS/X get updated w 0 - 60 bump.

 

[kbM3]

In order to get a valid run rate, they need to run a non-trivial amount of vehicles through. There is likeky nowhere to put the partly completed cars on the line, so it needs to operate end to end.

Where there is some potential for non sequential flow are subasseblies like pack (in Sparks), dash or drive unit. Those could be built and batched.

I would guess they ran a full shift or so to get the rate number.

Some of this has given me an appreciation for the immense difficulty in designing factories as a "product"

Even simplifying and assuming total automation and no suppliers there are incredible difficulties.

Ideally one would like to:

1) Design each subsytem
2) Design the entire system to integrate the subsystems
3) Test each subsystem so that it achieves it's burst rate.
4) Stress test each subsystem so that it easily sustains the rate.
5) Test the integration of the various subsystems into a system for burst rates and over time.

Now examine each output of every subsystem and the system and make sure there are no flaws.

Do all of the above, but as a cash strapped company where you can ill afford to just throw away parts and/or whole cars during testing and while the entire world is watching every step.

 

[SteveG3]

I wonder if actually Elon wanted to get to 5000/w by end of Q1 but got convinced by his colleagues that it would be better to emphasis quality and so slow a bit the ramp.

yes, they may have talked Elon down. receiving something like $750 million in cash since the last update via deposits and clearing out inventory may have also made Elon more comfortable easing off on the ramp pace (easier to ride an extra quarter before at lower Model 3 volumes/revenues).

 

[Causalien]

buying Tesla is a no brainer. Tesla might even go green tomorrow

Heh... well long term yes. Short term not for the faint of heart.

Days where 8 ball is spot on, I always wondered if the Dog is wagging the tail or is the tail wagging the dog.

 

[SteveG3]

Some more data about the Model 3 ramp speed versus MS and MS. A picture can sometimes help to understand that the M3 ramp is way faster than the previous models.
https://i.imgur.com/uE4Ay0j.png

fwiw, that is not an accurate set of data. Tesla delivered a little over 2,000 Model S in 2012. The first deliveries were at an event in June of 2012... then it was nil for another couple of months. So, overall, the Model S ramp was of a pretty similar scale as the Model 3 ramp. That said, the Model 3 ramp is more ambitious. This ramp they are setting up for ultimate capacity of over 10X of the Model S ramp (and that's just to get to 5K/week) and they are ramping both vehicle manufacturing, and module and pack assembly at the GF.

 

[Curt Renz]

I wonder if actually Elon wanted to get to 5000/w by end of Q1 but got convinced by his colleagues that it would be better to emphasis quality and so slow a bit the ramp.

yes, they may have talked Elon down. receiving something like $750 million in cash since the last update via deposits and clearing out inventory may have also made Elon more comfortable easing off on the ramp pace (easier to ride an extra quarter before at lower Model 3 volumes/revenues).

I suspect that may be true. I also suspect they may have finally convinced him to start under-promising expected production dates and rates to Wall Street and the media.

 

[CatB]

Got my email to configure as well. It sounds like a few thousand got the email today. Good news, in that the 'one thousand per week' hypothesis sounds like it's not smoke n mirrors

Ditto on getting invitation to configure. Now the tough part: wait for white interior? wait for stock to go up (so I can part with fewer shares)? or just carpe diem? Best problem to have EVER!

 

[Starno]

I suspect that may be true. I also suspect they may have finally convinced him to start under-promising expected production dates and rates to Wall Street and the media.

Plus maybe he wants to avoid burning out employees and get into a " PR scandal " ...
The production bottlenecks might have drained them a lot ... need some rest.

 

[Cattledog]

Ditto on getting invitation to configure. Now the tough part: wait for white interior? wait for stock to go up (so I can part with fewer shares)? or just carpe diem? Best problem to have EVER!

Carpe Diem! What price happiness?