That's a good point. If they get to 5k a week by March is there any reason why they couldn't be doing 10k a week by June? That with big bumps to s+x could do it. By that logic I'll be optimistic and say 355 3s and 145 s+x.
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How Many Vehicles Will Tesla Manufacture in 2018 (S/X/3)?
- Thread starter electracity
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ValueAnalyst
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EM had originally said 10k/w by end-18, but walked even that back, so I'd guess 10k/w by mid-19.
I had to look up the quote from conf call " And it's worth noting that some of our manufacturing areas we're actually seeing capabilities that we estimate in the 6,000 unit to 7,000 unit per week capability, well in excess of the 5,000 unit capability and we're optimistic with further optimization that many of our production processes will meet very little and in some cases no, so I'm not saying no, but almost no CapEx to reach something close to 10,000 units a week." I'm not sure exactly what time frame he's talking about but I'll stay optimistic, might as well shoot for the moon. I don't have to shave my head if I'm wrong do I?
ValueAnalyst
Closed
I had to look up the quote from conf call " And it's worth noting that some of our manufacturing areas we're actually seeing capabilities that we estimate in the 6,000 unit to 7,000 unit per week capability, well in excess of the 5,000 unit capability and we're optimistic with further optimization that many of our production processes will meet very little and in some cases no, so I'm not saying no, but almost no CapEx to reach something close to 10,000 units a week." I'm not sure exactly what time frame he's talking about but I'll stay optimistic, might as well shoot for the moon. I don't have to shave my head if I'm wrong do I?
Not unless I shave it for you
Now compare that statement to the one from the previous conference call:
"What People Should Absolutely Have Zero Concern About Is That Tesla Will Achieve A 10,000 Unit Production Week By The End Of Next Year."
So now, I add three to six months to whatever he says. For example, I expect the Semi reveal in ~20 Thursday's from this Thursday.
That's probably smart, IIRC at one point they were going to be doing that by like 2016. The good thing I guess is that once they get all of the big problems figured out the ramping hopefully gets a lot easier. So ideally, getting from 0-5000 a week is a a lot harder than 5-10000 a week, time will tell.Not unless I shave it for you
Now compare that statement to the one from the previous conference call:
"What People Should Absolutely Have Zero Concern About Is That Tesla Will Achieve A 10,000 Unit Production Week By The End Of Next Year."
So now, I add three to six months to whatever he says. For example, I expect the Semi reveal in ~20 Thursday's from this Thursday.
Whatever time frame Elon claims, I automatically shift it out by 6 months,
It’s reflexive by now.
Otherwise expect to be disappointment .
It’s reflexive by now.
Otherwise expect to be disappointment .
(Shouldn't really be on this thread, really since I'm not an investor although I follow some of the discussions. I sometimes miss the thread location. I'm a risk-averse procrastinator who missed the boat on being able to put disposable income in.)
I'm semi-serious.
Model 3 is Tesla's raison d'etre. Solar and storage isn't anywhere near enough to keep them going.
If there's no Model 3, there's no Tesla.
My view is that Model X was a disaster that knocked the company financial timeline totally out of whack and almost brought the company down. Tesla was saved by the Model 3 reveal and reservations showing the demand, which kept investors and lenders interested.
Tesla's similarly going to use the semi reveal as a way to keep excitement and interest, just as they did with the Model 3 reveal at a tough time in the X ramp.
But I don't think it's going to be enough of a distraction from the Model 3.
I'm not sure that Tesla will be able to resolve the battery and other Model 3 production problems fast enough to persuade the market that it will succeed.
2018:
55,000 Model S
45,000 Model X
276,000 Model 3
376,000 total
And 2019:
55,000 Model S
55,000 Model X
475,000 Model 3
585,000 total
55,000 Model S
45,000 Model X
276,000 Model 3
376,000 total
And 2019:
55,000 Model S
55,000 Model X
475,000 Model 3
585,000 total
IIRC they have not even ordered the second line. This action (or lack of action) says a lot for those willing to listen: They don't have the cash flow to invest, they can't push 10K cars/week through their system within 14 months, they may not be able to profitably sell 10K M3 per week manufactured in Fremont, they aren't confident in M3 line #1.
I'm guessing that the head of manufacturing is hoping to make 4000/week M3 by the end of 2018.
I really doubt that they plan to make 10K/week Model 3 in Fremont. I think at 10K they expect most production to be model Y.
Applying the 6 month delay rule to Elon's projections:
Projection was exiting Dec at a 5000 per week run rate
hence delay it by 6 months
first half of 2018 : 2000 per week for 24 weeks = 48,000
Second half 2018 : 5000 per week for 24 weeks = 120'000
2018 model 3 production prediction: 168,000
these 6 month delays create huge corrections and trading ranges.
Projection was exiting Dec at a 5000 per week run rate
hence delay it by 6 months
first half of 2018 : 2000 per week for 24 weeks = 48,000
Second half 2018 : 5000 per week for 24 weeks = 120'000
2018 model 3 production prediction: 168,000
these 6 month delays create huge corrections and trading ranges.
It says less than you think.
It almost certainly *does* say that they don't have the cash flow to build the second line. It also says that they don't have the free engineering talent to fix problems with Body Line 2 so that they can shut down Body Line 1 and make space for the additional model 3 lines.
HOWEVER.
If you are simply copying a production line, the lead time is pretty short compared to setting up a first version of a production line, which has much more debugging involved. I bet the longest lead time items have already been ordered. IF they get the first line working smoothly and simply need a second line, I suspect they can do it in a couple of months giving financing. And if they're going at 4000/week, I believe they can get financing.
Why do you think so? Tesla has repeatedly pushed back investment on Model 3 line compared to earlier guidance given. Why would they suddenly have pre-ordered second-line items? Especially when Elon was quite clear in the latest conference call that they are first going to try to get as much out of the first line as possible before deciding on the second one?
I doubt they will simply copy the production line. I suspect some of their more Alien Dreadnaughtish ideas are problematic. I have a vague recollection of Straubel suggesting that they were still figuring out the best way to do line 1. But certainly they would look at signing contract for long lead time components needed for line 2.
But as I said in my earlier post, I doubt Tesla push 10k cars through the system by the end of next year. Bottlenecks would make the attempt very unprofitable. The attempt to me would seem to magnify, not alleviate, cash flow problems.
I think making 4000 M3/week by the end of 2018 is a win. I don't know what cash flow looks like in that scenario.
Because they're not idiots?
Most of the things on the line -- the robots, the welding equipment, the steel superstructure, etc. -- are NOT long lead time items. The long lead time items are going to be a fairly short list of fairly obscure, typically small pieces. Ones where *it will be essential to have spares anyway*. They will have two of each of these already. When they go to set up the second line, they'll use the second one and then make the long lead time order for more spares.
If you can think of an exception -- a really large, expensive long-lead-time item -- then they might not do it with that. But I don't think there is one -- or rather, I think they've already ramped those up. Unless the stamping presses turn out to be a bottleneck, which seems unlikely. The paint shop would be another expensive long-lead-time item but that's already been upgraded.
The paint shop has its own lines that would need to be built out. There are not robots that are not sitting idle waiting for 10k M3 per week. Cars spend about half a day in a paintshop. So at 10K per week the paint shop has about 1000 cars in process.
Well 500k guidance was when 5k M3 a week was intended for end of the year no?
ValueAnalyst
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Who knows... but I also don't know of a sell-side analyst that's expecting more than 400k total deliveries in 2018, do you?
In fact, $20B of consensus revenue estimate for 2018 likely assumes something close to 150k Model S/X and 100k Model 3's with some TE.
So investors are pricing in half of a multi-national firm's CEO's projection for 3 to 15 months ahead. That's incredible to me.
I think more than 400k is possible if the exponential hits the ramp before end of June.
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