General Discussion: 2018 Investor Roundtable

[Intl Professor]

File Under Useless but Entertaining

Tesla SUV earns a Guinness World Record for towing massive airplane

 

[Todd Burch]

First Tesla Model 3 safety test results released, IIHS says ‘superior rating for front crash prevention’

More good news, so expect TSLA price to fall...

 

[AudubonB]

Headline for new article in this week’s The Alaska Ranger:

Is There Any Reason EVER to Read an Article Whose Headline Ends With “?”

 

[Mike Smith]

Already a few Model 3 VINs over 30,000 issued today:

Model 3 Invites Spreadsheet Published Web Version

 

[JRP3]

Tesla to halt production line again, report says

Another production shutdown.

 

[Waiting4M3]

Tesla to halt production line again, report says

Another production shutdown.

Makes sense to do a shutdown for 6 days over Memorial Day holiday weekend, I hope that's when they add equipment for AWD/P production

 

[Mike Smith]

Tesla to halt production line again, report says

Another production shutdown.

Great news. Every shutdown has led to a huge increase in production. Hopefully this will be the last step to unlock 5k/wk production.

 

[EinSV]

Tesla to halt production line again, report says

Another production shutdown.

I'm sure everyone remembers this, but just so the details are handy, here is Elon's email from April 17 regarding plans for a late May shutdown and production improvements:

Starting today at Giga and tomorrow at Fremont, we will be stopping for three to five days to do a comprehensive set of upgrades. This should set us up for Model 3 production of 3000 to 4000 per week next month.

Another set of upgrades starting in late May should be enough to unlock production capacity of 6000 Model 3 vehicles per week by the end of June. Please note that all areas of Tesla and our suppliers will be required to demonstrate a Model 3 capacity of ~6000/week by building 850 sets of car parts in 24 hours no later than June 30th. Tesla Model 3 production aims for 6,000 units per week in June after upgrade in May – ~5,000 with margin of error, says Elon Musk​

 

[EinSV]

And Gene Munster provides a helpful explanation on why the production shutdown to improve the line is a good thing for investors.

Why Tesla's Model 3 production pause is a big deal: Loup's Gene Munster

 

[K_Dizzle]

Tesla to halt production line again, report says

Another production shutdown.

Already a few Model 3 VINs over 30,000 issued today:

Model 3 Invites Spreadsheet Published Web Version

I got my vin today, I thought fate would give me 30,000. Instead I got 30,222. No complaints

 

[BioSehnsucht]

Harder to say that exactly... they can produce a maximum of 5,000/week without the Grohmann line, they said that during the call (or in the ER). The Grohmann line is more automated and simply reduces the number of staff required to make the 5,000/week - thus, it is less costly. But it won't go faster than 5,000/week yet.

I wonder if the "Grohmann line," as it is designed & built today, will never be able to produce more than 5,000/week. I suspect that their push from 5,000 to 10,000/week will be accomplished by installing another line. Don't forget that GF1 is only one-third built, and they have already described it as having multiple identical "production lines." The pilot line could be considered complete when it is reliably producing 5,000/week. After that they put in another set of everything to get it up to 10,000/week. Does this make sense?

I don't think they have enough room to stockpile excess produced parts from areas/processes of the factory that are going faster than the next area/process. As they improve, the following area/process would then have to not only catch up with its input areas, but surpass them, in order to absorb the stockpiled stuff (or the input processes slow down). And finally, the slowest area/process kinda dictates the speed of overall production, even if the following areas/processes could go faster - they simply run out of materials to work with, because they're waiting for the slower input departments. This is exactly what Elon has said on many occasions - production goes at the speed of the slowest or least-lucky department.

Previously we were at over 2500/wk before Grohmann went live, IIRC, and Grohmann was supposed to do 2500/wk, so combined they should do 5000/wk (and going higher just means duplicating more Grohmann lines, eventually replacing the pre-Grohmann line). Unless they intentionally slowed production on the pre-Grohmann line, I don't see how Grohmann could be operating at anywhere near full capacity at the moment and not already be at/over 5000/wk steady state production.

Of course there's a possibility that Pansonic is having problems we're not aware of and Tesla has finally used up the stockpile of cells as they've climbed in production of packs and done various burst speed tests. But that seems unlikely.

 

[Tenable]

Previously we were at over 2500/wk before Grohmann went live, IIRC, and Grohmann was supposed to do 2500/wk, so combined they should do 5000/wk (and going higher just means duplicating more Grohmann lines, eventually replacing the pre-Grohmann line). Unless they intentionally slowed production on the pre-Grohmann line, I don't see how Grohmann could be operating at anywhere near full capacity at the moment and not already be at/over 5000/wk steady state production.

Of course there's a possibility that Pansonic is having problems we're not aware of and Tesla has finally used up the stockpile of cells as they've climbed in production of packs and done various burst speed tests. But that seems unlikely.

I keep seeing members here quoting the Grohmann line as adding the capacity needed for 5k. Am I crazy or are the present semi lines supposed to enable 5k production without Grohmann?

 

[Iceman]

I keep seeing members here quoting the Grohmann line as adding the capacity needed for 5k. Am I crazy or are the present semi lines supposed to enable 5k production without Grohmann?

Not crazy. 5k on lines without Grohmann.

 

[mongo]

I keep seeing members here quoting the Grohmann line as adding the capacity needed for 5k. Am I crazy or are the present semi lines supposed to enable 5k production without Grohmann?

You are not crazy,

Consequently, we now expect to reach a module production rate of 5,000 car sets per week even before we install the new automated line designed and built by Tesla in Germany.

Q1 letter.
@Iceman types faster, but I link

 

[BioSehnsucht]

All the more reason why 5k shouldn't be a problem. But apparently we're still not hitting it consistently - so surely Grohmann isn't running yet, or we'd have an excess of capacity?

 

[Curt Renz]

The original MT Newswires version of this news appeared this afternoon in my TD Ameritrade newsfeed for Tesla.

Reuters - today: STMicro expects to grow twice as fast as peers in 2018

...The supplier of key components for Apple phones and Tesla vehicles is seeking to convince investors that ST can deliver sustained growth in sales, margins and market share...

...At its annual Capital Markets Day, executives hammered home the theme that STMicroelectronics is far better positioned in the best parts of solidly growing automotive and industrial markets than industry peers...

This is interesting regarding European chip maker STMicroelectronics (NYSE symbol STM), which also happens to be a Tesla supplier. It should be welcome news that that a Tesla supplier is revving up production.

 

[Waiting4M3]

All the more reason why 5k shouldn't be a problem. But apparently we're still not hitting it consistently - so surely Grohmann isn't running yet, or we'd have an excess of capacity?

I know I know. Because it's not June yet. Tesla had planned to get to 3k-4k in May, and 5k-6k in June. My guess is they need to staff up the 3rd shift, and that is a gradual process that takes several weeks of hiring, starting in April and running into June. In addition there are some machine tweaks that they now plan to do at the end of May. IMO really nothing to see here, just let them work.

 

[BioSehnsucht]

I'm not expecting the entire end to end capability to be there yet for 5k/week from packs to assembled vehicles.

But with the pre-Grohmann capacity and the Grohmann line, hitting 5k/week sustained for pack production shouldn't even be a concern, but the leaked email seems to indicate nowhere near 5k rate.

If it had said that they had burst tested to 5k and were only running sustained lower so as to not create too much overflow of parts (because you have to store them someplace), then I would take it to mean things were solved on battery production. But while it is significantly better than before, it sounds like it isn't there yet.

Alternatively, we're still not seeing any output from Grohmann and the old line is just limited by labor force and they haven't finished hiring/training to staff it to 5k/week on it's own.

 

[Tenable]

In less helpful news, has anyone been watching the most recent episodes of Silicon Valley? They are half Tesla commercials.

 

[Waiting4M3]

I'm not expecting the entire end to end capability to be there yet for 5k/week from packs to assembled vehicles.

But with the pre-Grohmann capacity and the Grohmann line, hitting 5k/week sustained for pack production shouldn't even be a concern, but the leaked email seems to indicate nowhere near 5k rate.

If it had said that they had burst tested to 5k and were only running sustained lower so as to not create too much overflow of parts (because you have to store them someplace), then I would take it to mean things were solved on battery production. But while it is significantly better than before, it sounds like it isn't there yet.

Alternatively, we're still not seeing any output from Grohmann and the old line is just limited by labor force and they haven't finished hiring/training to staff it to 5k/week on it's own.

The Feb shutdown allowed them to go from 500-700/wk to 1500-2000/wk. The April shutdown is allowing them to go from 2k/wk to 3-4k/wk. Extrapolating from those, of course they would need a shutdown to get more dramatic step up from 3-4k/wk to 5-6k/wk. If they're already near 5k/wk now, then why this shutdown would be even necessary?

Regarding doing a burst rate trial run, I think it's only necessary if you're not sure what other problems you may run into when you crank up the rate. I think Tesla now knows exactly which steps they need to speed up, everything else have already been tested out, and there is no need to continue to do these "burst rate trials".