How many model 3s will take deliver in q1

[Singer3000]

True, they can borrow against cars in transit for about 85% of value IIRC, so I guess it would only be a 108 million dollar hit -- not nearly as big a deal.

I believe it was Factchecking that pointed out a while back in the Big Thread that any working capital hit for China deliveries is in any case a 2019 temporary phenomenon only. Once they're churning out cars there, they should in theory be able to bring the average Inventory Days in China down to well under 2 weeks.

Right now they're saying that the LR versions will not be made in Shanghai but one suspects that's just because they're being a bit coy about rest of world demand and want to ensure they can max out Fremont. Including the SR+, I don't personally see a problem in finding 7k/week buyers outside of China, let's see.

 

[heltok]

Looks like this group was like the rest of the world, a bit optimistic about both production and deliveries in Q1. Tesla reported 63,000 deliveries with 50,900 being model 3s. Production was down 11% from 86,555 in Q4 at 77,100 EVs with 62,950 Model 3s. They accounted for 10,600 as "in transit".

The low delivery number shouldn't be a big factor, but I don't get why they couldn't produce as many cars this quarter as last. That is a much larger issue.

My take on production. In Q4 Tesla pushed production hard to maximize tax benefits for american customers. Lots of expensive overtime, tent etc. In Q1 they had problems with european parts, they cut down S/X shifts and 75kWh to save money, the introduced the next major production increase driver SR/SR+ which will take some time to scale up, they had more days of holidays and due to HW3 being introduced in the end they had some incentive to shift production from Q1 to Q2.

In Q4 I argued that I thought what Tesla was doing in Q4 was not a their best strategy, got lots of disagree. I stand by it today, imo Tesla should have sold P3D to Europe and China in Q4 instead of maximizing American tax benefits for customers.

 

[neroden]

Huh. I was on target originally rather than with my revised guess. Wow.

 

[neroden]

I'll tell you how I get 78K. Suppose they had about 1 week of downtime (maybe a bit low) and produced an average of 6500 cars / week (maybe a bit high). If they had 2 weeks of downtime or averaged 6000 cars per week, we get 72K, but neither theory matches the leaks I've heard.

Looks like 3 weeks downtime and 6000 cars per week (or even more downtime). This is the only part of the report that worries.

 

[anthonyj]

Looks like this group was like the rest of the world, a bit optimistic about both production and deliveries in Q1. Tesla reported 63,000 deliveries with 50,900 being model 3s. Production was down 11% from 86,555 in Q4 at 77,100 EVs with 62,950 Model 3s. They accounted for 10,600 as "in transit".

The low delivery number shouldn't be a big factor, but I don't get why they couldn't produce as many cars this quarter as last. That is a much larger issue.

I guess they are a little tight on cash and don’t want to admit it. I’m not saying bankruptcy is on the table, but being a bit low on cash and trying to scale up and build inventory that will sit on a ship for a month is impossible. I’m sure they have demand overseas but they don’t want to exhaust most of their cash before the quarter ends, that would look bad. Musk should’ve raised capital at $360, if he wants Tesla to do business like a start up then he should’ve raised cash like one imo. Lowered production isn’t bullish and I wish I didn’t put so much weight on the Bloomberg tracker.

I will continue to have blind optimism for my core shares since I love the product. But I want to exit most of my swing because something doesn’t smell right in the short term

 

[dethman]

I guessed 50k. Not far off.

 

[ggr]

Bear in mind that there are differences between North American models, European models (different charge connectors, some different regulation) and Chinese models (different chargers again, maybe other differences I don't know about). These probably introduced some production delays or slowdowns at first.

 

[Barklikeadog]

My take on production. In Q4 Tesla pushed production hard to maximize tax benefits for american customers. Lots of expensive overtime, tent etc. In Q1 they had problems with european parts, they cut down S/X shifts and 75kWh to save money, the introduced the next major production increase driver SR/SR+ which will take some time to scale up, they had more days of holidays and due to HW3 being introduced in the end they had some incentive to shift production from Q1 to Q2.

In Q4 I argued that I thought what Tesla was doing in Q4 was not a their best strategy, got lots of disagree. I stand by it today, imo Tesla should have sold P3D to Europe and China in Q4 instead of maximizing American tax benefits for customers.

Didn't they forecast even more model 3 builds/sales for 2019?

 

[neroden]

Anyone paying attention knows they are not out of production hell.

Model S and X demand down due to tax credit expiration, Osborning, fine.

But Model 3 demand is unmeetable... They cannot ramp up fast enough. Leaks wwre saying they ran machines until they broke... Maybe they are breaking often enough to significantly reduce production. Switchover to Euro and China models, and back, and switching to SR, seems to have caused unwanted downtime...

 

[Doggydogworld]

Anyone paying attention knows they are not out of production hell.

Model S and X demand down due to tax credit expiration, Osborning, fine.

But Model 3 demand is unmeetable... They cannot ramp up fast enough. Leaks wwre saying they ran machines until they broke... Maybe they are breaking often enough to significantly reduce production. Switchover to Euro and China models, and back, and switching to SR, seems to have caused unwanted downtime...

There's no evidence to support your claims. The P&D letter didn't mention any production problems. The Q4 earnings letter said they qualified all stages of Fremont production for 7k/week and essentially guided 68-70k in Q1.

The only reason to cut back to 63k production is low demand. The hasty SR+ launch also supports the low demand theory. So does the larger than expected inventory build (12k vs. 10k guidance) despite backsliding into stop/start production cadence again. They started Q1 with 1k Model 3s in transit and 7k unsold. They ended with 7k in transit and 13k unsold. That's the opposite of "unmeetable demand".

 

[neroden]

That's absolute nonsense.

We know for a stone-cold fact that they still have an LR reservations backlog in Europe. We also know that the ships which went to Europe *weren't full of 100% Tesla cars*. Therefore there was demand, and there was delivery capacity, and.... they didn't produce the cars to ship to Europe.

That is a production problem. Not a demand problem.

If you want to say that there was a "US demand reduction", sure, whatever, that's due to the tax credit expiration, and I already figured that US LR demand had been saturated back in Q4. But if they can't meet European demand, which they can't, that's a production problem. (I suppose it could also be a delivery problem landside in Europe. Shortage of Euro-spec parts was actually mentioned, though, so... production problem.)


Are you seriously contending that they were able to meet and exceed European demand (with backlog still remaining!!!) and decided not to, for shits and giggles? That doesn't pass the laugh test. Slowing down the production line intentionally makes no sense: most of the costs are fixed (hourly workers, etc.), with materials being the only variable costs really. They want that line running at top speed, and it wasn't. If there were really a total demand shortage, they would have laid off a shift, like they did for Model S and X.

You really think a mere 20K to Europe is due to demand? I mean, are you kidding me? If they could have produced more, they would definitely have delivered more. Something prevented them.

We essentially have incontrovertible proof of a production problem. Had Tesla been able to get to full speed on European and Chinese production during early January and ship the cars out promptly during January and Feburary, they would have delivered more cars in Europe and China. They were unable to.

The only reason to cut back to 63K production is that they were unable to produce more Euro-spec and China-spec cars. They have a production limitation.

 

[neroden]

The Q4 earnings letter said they qualified all stages of Fremont production for 7k/week and essentially guided 68-70k in Q1.

Well, I guess they failed -- leaks say they were "running machines until they broke", so maybe that "qualified for 7k/week" didn't really get them 7k/week.

The factory shut down for 5 days in early January, when it was supposed to be going into high gear for European production.

Maybe they could do 7k/week of US models but not of European models (remembering reports of "shortage of Euro spec parts").

And maybe they are losing a day or several days every time they switch region. (Which they did three times in Q1 at least... actually due to shipping order interlacing China and Europe, probably more than 3.)

This seems likely. They have to fix those problems.

You're usually sensible, but you've gone off the deep end here. It's simply not possible for them to have saturated LR demand in Europe with a mere 20000 cars -- they didn't, we have proof they didn't. (Reservation holders still don't have their cars, Tesla haven't even started offering the cars in all countries, and they haven't started offering RWD.)

You can say that they switched back to the US at the start of March for cash management, but that doesn't explain why they produced so few cars for Europe before then. The only conclusion is that they were production limited for Europe. I'd like to know why. I probably won't find out, since Tesla's getting very good at preventing leaks now.