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Yes, I hope they can do it, but this is aiming REAL high.......
When I wrote this original post the other day, even I wasn't thinking of this much increase in production this soon!
When I wrote this original post the other day, even I wasn't thinking of this much increase in production this soon!
N5329K
Active Member
Not too difficult to imagine those two manufacturing guys being told, "we're going to ramp up to meet the 500k number by 2018," and them saying, "can't be done." At which point they became free to pursue other interests. If this is what happened, it won't take long to discover who was right.
Robin
Robin
That would be imagining... we don't know the story. It may very well have far more to do with Model X and burnout.
Anyways, I wrote about the cadence of production, and well, Tesla changed the story. In any case, they will be building out a lot of Superchargers. I think as the Model X production increases and the capex spend for Superchargers is now back on track, we will feel better about Supercharger quantity everywhere in the U.S. except for CA. There are just so many Tesla's in CA combined with dynamics that are a bit different with high electricity prices at home and many nearby Superchargers, I think the real relief is getting more people to charge at home.
It was verified in the 2016 Q1 call that the Model 3 prototypes were using production drive trains.
ttupper92618
Member
Fire-sales on stock don't drive companies out of business. How did you arrive at that conclusion?
voip-ninja
Give me some sugar baby
What I'm talking about is that Tesla is still not profitable. Tesla is going to have to take on more debt in order to expand production massively in order to meet the demand for the Model 3. If they suffer a major set-back on Model 3 delivery (which, according to them, won't happen now) the market is going to punish them. They also might be in a bind with creditors if expected Model 3 deliveries stall and they don't have the cash-flow to service their debt.
But what do I know about business, I just stayed in a Holiday Inn Express last night.
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ttupper92618
Member
I appreciate your viewpoint, but I don't think it reflects the true state of affairs. The value of Tesla's stock is at least somewhat decoupled from the company's operations and from whether or not it can raise capital. This is true of many companies. Amazon (AMZN), as an example, either failed to turn a profit or was in the red for nearly 20 years straight. Almost all of that time, it was rapidly expanding. People still bought the stock, and they still got plenty of money from creditors; Amazon has raised at least $10 billion through bond offerings, even though it wasn't turning a profit.
Tesla is currently sitting on something like $14 billion in reservations alone for the Model 3; I think it is very unlikely that it will be unable to attract further investment so as to turn that number into actual sales.
Audrey
Member
Taking on debt isn't the only way to increase capital. You can also sell equity (in the form of stock or other ownership options).
I think we are missing a key point here. We don't know for how long Tesla's been working on the Model 3.
It's not like the company can only work on one thing at the time. I'll bet that a team has been working on things like the drive-train, battery pack and probably software for years now.
The stamping tools and metal working parts are surely not done yet. But Tesla could very well have the basic car skeleton all ready to go inside their workshops.
Think about it:
1. Electric motor: Take S motor, simplify, validate, done
2. Batterypack: Take current pack, simplify, agree on size, redesign, validate, done
3. Software: Agree on screen size, agree on S-style canbus protocol, code on simulator, pretty far along
I would also think that they are already in talks with seat-manufacturers, sound-system suppliers and so on.
So I agree with the sentiment that it will take hard work, a bit of luck and maybe a unicorn or two to make it happen. But the fact is that we don't know how long they have been working on the 3.
It's not like the company can only work on one thing at the time. I'll bet that a team has been working on things like the drive-train, battery pack and probably software for years now.
The stamping tools and metal working parts are surely not done yet. But Tesla could very well have the basic car skeleton all ready to go inside their workshops.
Think about it:
1. Electric motor: Take S motor, simplify, validate, done
2. Batterypack: Take current pack, simplify, agree on size, redesign, validate, done
3. Software: Agree on screen size, agree on S-style canbus protocol, code on simulator, pretty far along
I would also think that they are already in talks with seat-manufacturers, sound-system suppliers and so on.
So I agree with the sentiment that it will take hard work, a bit of luck and maybe a unicorn or two to make it happen. But the fact is that we don't know how long they have been working on the 3.
Has Elon Musk ever launched a vehicle that is simply based on existing platforms and technology, without adding something new, something whiz bang, something that has yet to be engineered? The answer is no. Reveal #2 will be telling.
That is where the concern is. Do you want it sooner, or cooler? You might get both, but the risks are much higher.
Personally, I'll be happy to see my model 3 May in 2018-I ordered in store in MA at 11:43am. Not a previous owner. By my estimates-doors weren't open when I got there-I'm guessing I was about 100th at that store. Took literally 2 minutes to put our order in with USAA card. 100people x100 stores is 10000 x 2 (double sales people more per store than mine) puts me about 20k-then add all Elon's employees, puts be back about 30k-then previous owners-drops me back another 25k. So, I'm about 55k into orders of 400k. Pretty early but I'll be one of the few who get one on the East coast first. I'm guessing second run/group of cars to this region. With 15 stores in the NE region-I'm guessing I'm about (let see 100 x 15 stores x 2 for more sales people) 2500+previous owners-1500 (7%) or so, so about 4,000 in my region. Probably be first batch of cars if they do over 5k per region.
I personally hope they do packages:
2 reasons:
1) They control the profits better this way
2) They can manufacture cars faster not worrying about his option or that option-car building simplified.
Pick a package in your price range and build it.
My worry of timelines are the vendors/suppliers. I'm hopeful as he is focused on if it's not easy-it's not going into manufacturing cycle. If you're late you get dumped as a vendor. He'll probably have backup plans too with other companies. Then tesla will look at all the vendors and parts and say okay we need to build these 4 parts-get R Done!
My guess is 3-4 months late of July.
I personally hope they do packages:
2 reasons:
1) They control the profits better this way
2) They can manufacture cars faster not worrying about his option or that option-car building simplified.
Pick a package in your price range and build it.
My worry of timelines are the vendors/suppliers. I'm hopeful as he is focused on if it's not easy-it's not going into manufacturing cycle. If you're late you get dumped as a vendor. He'll probably have backup plans too with other companies. Then tesla will look at all the vendors and parts and say okay we need to build these 4 parts-get R Done!
My guess is 3-4 months late of July.
You're forgetting the multiple times Musk has said that the Model 3 is being designed around the ease of production philosophy, not the gimmicks that the previous cars have had. It'll be a good car, but the major bells and whistles will be added to the higher end premium vehicles, and the new Roadster.
I can see the motors / gearboxes / power electronics being resized for the 3, but would the actual electronics design need to change at all? Probably not.
What about the Model S canbus / wiring harness? Aside from changing wiring lengths and connectors, a working system is already in place, they just need to adapt it to the different layout of the 3.
Battery pack - decide on what sizes, build it, test it, etc. But the proven design is already in place on the Model S, just resize and adapt it a bit.
I make it sound SO easy, don't I? I know, there's a ton of re-engineering going on.
What about the Model S canbus / wiring harness? Aside from changing wiring lengths and connectors, a working system is already in place, they just need to adapt it to the different layout of the 3.
Battery pack - decide on what sizes, build it, test it, etc. But the proven design is already in place on the Model S, just resize and adapt it a bit.
I make it sound SO easy, don't I? I know, there's a ton of re-engineering going on.
Not as far as any financial person would look it as it relates to debt or other financial instruments.
They are sitting on cash which is 100% refundable and a fraction of the $14B you mentioned.
garsh
Re Member
I think point was that they have 14 billion of revenue if they can convert the reservations to deliveries. And those reservations encourage investment.
Just an update but now it is over 16b. 400k x 42k (average price) you get over 16b. yes there will probably be some cancellations but I don't expect many of them. We all know we are supposed to wait for this car. Only if there is serious stiff competition that can beat tesla's specs would be a worry of losing more reservations. I don't think Elon will let that happen.
There isn't any competition. No other manufacturer is as dedicated to electric cars, they are just doing it for pollution credits and to raise their CAFE numbers. The first time there's a downturn in the electric car market, they will drop them just like that.
I think it would be crazy to even consider ANY electric car other than a Tesla.
I think it would be crazy to even consider ANY electric car other than a Tesla.
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