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Highlights from the FT Evercore ISI article

Discussion in 'Model 3' started by bhzmark, Aug 16, 2018.

  1. bhzmark

    bhzmark Supporting Member

    Jul 21, 2013

    Here’s what’s really going on in Tesla’s factory

    As part of Tesla’s semi-herculean effort to meet its Model 3 production numbers, the company erected a new assembly line inside a tent in the parking lot of its Fremont factory.

    The line accounted for around a fifth of the Model 3 cars built last quarter, and Elon confirmed on the earnings call the line was making all of the high-spec Model 3s.

    The analysts were impressed, from the note:

    Given the speed with which the facility was put in place and the associated capex, ignoring the building’s fabric, it looked very much like general assembly at other auto plants which we have visited.
    Only Model 3 cars are coming off the line, not Tesla’s Model S sedan or X SUV, a vehicle that has been a headache to manufacture.

    As a result, the line is more simplified than traditional auto lines.

    The production process involves only 43 steps/stations, 25-33% of the number found in traditional auto.
    Their conclusion:

    This facility looks set to be permanent and in theory should be able to support much faster cycle times . . . Initial reservations around GA4 [General Assembly 4], which we voiced in July, were quelled during our visit.

    . . .

    Panel gaps (chassis build quality) seems to have improved notably and, according to Tesla employees (that have worked at premium brands), are on par with German premium cars. Our subjective impressions confirm that the gap to BMW, Audi, and Mercedes is definitely less pronounced than it was in the past.
    It seems the number of vehicles being taken off the line for re-work — another issue that Tesla has faced — has also reduced.

    One thing which surprised us was how “clean” the bodies of the vehicles looked before paint. We saw very limited, almost no, evidence of markings on the bodies in terms of inconsistent colouring, textures or tones. Scuffing was not visible or prevalent. We had expected to see more evidence of scuffing. Of course, this does not mean that there were not vehicles, pre paint, which had been set aside for rework. There were. However, the issues were not obvious or visible to us.
    . . .

    We were very impressed with Tesla’s stamping press lines which we have a high level of confidence are among the best in class in the industry.

    . . .,

    Stamping seemingly has the capacity and capability to support all Model 3 targets and potentially future vehicle models as well.
    In conclusion:

    Stamping met or exceeded all the benchmarks which we had been looking for, ahead of the trip.

    . ..

    One important takeaway, which we believe is differentiating at Tesla, is that one of the first steps completed in Assembly is to fit an onboard computer/chip.

    Every part subsequently fitted to the vehicle is recorded by the vehicle’s computer.

    As a result, the vehicle has a full record of every part fitted, when it was fitted, and various other measures of importance during the fitting process (eg torque applied when it comes to fitting parts during assembly).

    This provides Tesla with a feedback loop for continuous improvement.
    . ..

    Tesla seems well on the way to achieving a steady weekly production rate of 5 to 6k units per week. In addition, the capex required and constraints that need to be overcome to reach 7 to 8k units per week seem well within reach:

    Based off our tour and what we saw, we see no reason why Stamping and General Assembly should not be able to handle 7k to 8k today, and even potentially 10k units, with very little incremental Capex.

    We believe the same is also true for the Paint Shop when it comes to reaching 8k units a week, with some incremental Capex potentially required to get to 10k units.

    Here is your cut-out-and-keep spreadsheet of George and Arndt’s rundown on their visit:

    • Informative x 6
    • Love x 2
    • Helpful x 1
    • Like x 1
  2. Unpilot

    Unpilot Active Member

    Dec 2, 2017
    Thanks for this!
    Now if only this was as widely disseminated as all the FUD.
    • Like x 1
    • Love x 1
  3. 30seconds

    30seconds Active Member

    Feb 28, 2013
    But the panel gaps

    No way they can make 5,000 a week

    Most of the reservations have been cancelled

    The I-PACE will destroy Tesla

    Panasonic is pulling their funding


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