Wiki Model 3 delivery estimator

[Troy]

Hi. Calculations have been updated again. I recommend re-entering your data. This is an additional change on top of the change 3 days ago. Let me explain why. At one time Elon said 100,000 to 200,000 Model 3 deliveries in 2017. The deadline for suppliers is July 1st, 2017. That leaves maximum 6 months in 2017. If 100K to 200K Model 3's were expected in 6 months, that would mean a production rate of 200K to 400K per year when exiting 2017. Based on that data, I had set the production ramp up speed too ambitiously.

3 days ago I moved the production start date by 2 weeks but I hadn't slowed down the production ramp up speed. I should have done that too because over time those numbers looked less realistic. I have now slowed down the production ramp-up speed in Q4 2017 and Q1 2018. If you were an early reservation holder, today's change will postpone your delivery up to 2 weeks. If you reserved late, up to 7 weeks.

The good news is, tax credits are now expected to last one-quarter longer because Tesla is likely to hit 200K in Q1 2018 instead of Q4 2017. What used to be called the optimistic tax credits scenario is now the default and only setting. The deadlines are now as follows:

Teslas sold in the USA so far (as of 8 Feb 2017): 113,535 units
Date Tesla will reach 200,000 in the USA: 10 Jan 2018
Last day to take delivery to claim $7,500 30 Jun 2018
Last day to take delivery to claim $3,750 31 Dec 2018
Last day to take delivery to claim $1,875 30 Jun 2019

 

[Chewy3]

This calculator estimates only about 30,000 model 3 deliveries in 2017. Not very optimistic about the 100k-200k deliveries?

 

[Troy]

@Chewy3. You are right. I was never optimistic about the 100-200K number. In the past, the estimator was using 60K in 2017. Now it's 30K. Tesla canceled an order with a German supplier. Some delays should be expected. Here are the quarterly production numbers the estimator uses. I'm not sure if that Q1 2018 number is still high. I guess we will wait for more news.

Q3 2017 460
Q4 2017 29,886
Q1 2018 78,707
Q2 2018 94,731
Q3 2018 95,772
Q4 2018 95,772

 

[Model 3]

One thing I find strange is that I get the same day estimated delivery if I select 55D or 75D. But selecting P75D or plain 55 both change the date by about one month each (in opposite directions). Don't you think they will prioritize the production based on battery-size? Just the "P" or "D" options?

I also notice that you seems to not follow the quarterly optimization we have seen on the Model S (and to less degree on Model X). But I think you are right, they can't continue with that when the production numbers rise this high.

 

[ummgood]

@Chewy3. You are right. I was never optimistic about the 100-200K number. In the past, the estimator was using 60K in 2017. Now it's 30K. Tesla canceled an order with a German supplier. Some delays should be expected. Here are the quarterly production numbers the estimator uses. I'm not sure if that Q1 2018 number is still high. I guess we will wait for more news.

Q3 2017 460
Q4 2017 29,886
Q1 2018 78,707
Q2 2018 94,731
Q3 2018 95,772
Q4 2018 95,772

Thanks for doing all of this work. I appreciate how much time you are spending trying to correlate a guess on delivery with information and news.

I am looking at the end of Feb for my car. That works out perfect for me and looks like I'll get the full tax credit (assuming it isn't chopped). I am hoping at this point I don't have to cancel because I am buying a rental house but hopefully since my wife's car gets paid off in that time frame it wouldn't be much more of a stretch unless something catastrophic happens.

 

[Troy]

Hi, @Model 3. It is intentionally like that. In terms of prioritizing trim levels, I used three categories:
1. Performance (P75D)
2. Dual motor (75D and 55D)
3. Single motor (55 and 75)

My idea was, as the cars move along the production line while they are being built by the robots, they are not going to mix up these 3 categories. Technically it would be too complicated if a performance version was followed by a dual motor (because they have different rear motors) and then a single motor (because it doesn't have a front motor). However, the 55 and 75 are identical in terms of motors. 55D and 75D are identical too. There is no reason why the 75D and 55D can't be produced together. The hardware is identical except the battery and badge. So that's the reason.

 

[Model 3]

Thanks for the answer @Troy. You are right about what you say, but we know at least from the Model S ramp that they did start to deliver the bigger battery first, not sure how that was for Model X? But no, no technical reasons to do it, just market/profit reasons.

Btw: are you sure that the "P" will get a different rear motor? Yes, I know that the way it is on Model S+X - old motor rear and the newer smaller motor in the front, but I assume that Model 3 will get a new motor, and I see no reasons to develop two new motors. But they may be reusing the newer smaller (front) motor from S/X as a "P" motor in the rear on TM3?

 

[ummgood]

Thanks for the answer @Troy. You are right about what you say, but we know at least from the Model S ramp that they did start to deliver the bigger battery first, not sure how that was for Model X? But no, no technical reasons to do it, just market/profit reasons.

Btw: are you sure that the "P" will get a different rear motor? Yes, I know that the way it is on Model S+X - old motor rear and the newer smaller motor in the front, but I assume that Model 3 will get a new motor, and I see no reasons to develop two new motors. But they may be reusing the newer smaller (front) motor from S/X as a "P" motor in the rear on TM3?

It is possible that the existing motors from the Model S will be used with some small tweaks making two motor sizes available.

 

[Dutchie]

If I look at the Tesla website it tells me that if I order now I can expect delivery late 2018.

I reserved April 1. If I punch in my data it shows delivery September 2018, which - in my books- is pretty much late 2018. So me reserving April 1 compared to reserving now would not have very much effect for the time of delivery. I think something is off..

 

[Troy]

Hi, @Dutchie. I don't see where it says late 2018. I see "mid-2018 or later" here and here. That limits the earliest date but doesn't limit the latest date. The statement was added because the previous one used to say, "Deliveries begin late 2017" (link) and some people thought that was for new reservations. They are basically saying, don't expect the car before mid-2018 if you reserve now. This was added about 4 months ago (link) and hasn't been updated since then. It says the same thing for all countries.

 

[Weezer Fan]

I'm still Feb, which is good. Wish it was sooner, but, oh well.

 

[CricTic]

Thanks for the answer @Troy. You are right about what you say, but we know at least from the Model S ramp that they did start to deliver the bigger battery first, not sure how that was for Model X? But no, no technical reasons to do it, just market/profit reasons.

+1 - I would be very surprised if they didn't initially prioritize production of the 75D over the 55D for revenue reasons. They may build the single motor versions side by side because they will likely start producing those later anyway.

 

[Troy]

Hi, everybody. I have updated the calculations based on the latest data Tesla released today in the shareholder letter. I used these data points:

• Model 3 on track for initial production in July, volume production by September
  
• Our Model 3 program is on track to start limited vehicle production in July and to steadily ramp production to exceed 5,000 vehicles per week at some point in the fourth quarter and 10,000 vehicles per week at some point in 2018.
• We expect to deliver 47,000 to 50,000 Model S and Model X vehicles combined in the first half of 2017

The 5K and 10K numbers are for total vehicle production, not just Model 3. 10K per week is 500K per year. In today's conference call, Elon reconfirmed that Tesla will reach 500K production rate at the end of 2018. This was already known information.

After this latest change, there are some additional delays compared to what the calculations used to show. For early reservation holders, the delays are a few days. For late reservation holders, delays can be up to 86 days depending on how late you placed your reservation.

Full tax credits are still looking good until June 30, 2018.

 

[Model 3]

The 5K and 10K numbers are for total vehicle production, not just Model 3.

Are you sure of that? Ok, I don't disagree on the 10K number, but I clearly got the impression that the 5K number is for Model 3 alone?

Here they are clearly speaking about just the Model 3 production numbers:

http://seekingalpha.com/article/4048698-tesla-tsla-q4-2016-results-earnings-call-transcript

Colin Michael Langan - UBS Securities LLC

Oh, great. Elon, in the press release, you give comments on margins for the first half of the year. Any broad color on how we should think about margins in the second half, particularly as the Model 3 launches. I mean will that be profitable day one or is that going to take some time for that to ramp? Any color there?

Elon Reeve Musk - Tesla, Inc.

(31:05) that it will not be profitable on day one because of that exponential issue that I mentioned. The only Model 3s will be (31:15) negative margin, particularly on day one, when I say literally day one. Because you're starting at a tiny, tiny rate, as you spool up this giant machine. So, it's like no company on Earth could – it's not a function of Tesla. It is like physically impossible. So, you have to get the production rate to some reasonable capacity percentage of the system.

If the capacity of the production system is X, until you are at least like half X, your gross margin is going to be weak and it's going to be terrible when you're like an order of magnitude below, or if you're 10% of X, or less. It's going to be terrible. But, then it'll get really good as you start to approach 100% capacity. Like, then it gets great. And then as we get to the initial phase of capacity of 5,000 a week, I would expect to see gross margins comparable to that of the Model S and Model X.

Colin Michael Langan - UBS Securities LLC

So, end the (32:33) next year that you should get to the 5,000 per week, is that right?

Elon Reeve Musk - Tesla, Inc.

Well, I feel pretty confident that we should get there by the end of this year, to 5,000 a week. Now, I do want to separate this from parts orders. I know a number of our suppliers are listening. It's impossible to keep – like nothing is a secret these days, it seems. Yes. It's like major intelligence organizations cannot keep a secret. It's like, really – I don't know who can, honestly. So, when we place parts orders with our suppliers, we've told them 1,000 a week in July, 2,000 a week in August, and 4,000 a week in September. These are parts orders. Then the parts need to arrive. They need to be turned into a car. And the car needs to be delivered to customers.

 

[ModelNforNerd]

I also took the 5k and 10k numbers as being specifically about the Model 3 production ramp.

That would definitely alter your numbers, and in my case, be a significant difference....

If the ramp is just Model 3, I'd possibly see my car in the last 2 weeks of 2017, great for tax purposes.

If those numbers are for Tesla production overall, then your spreadsheet's estimation of March would be more likely.

 

[Troy]

Hi, @Model 3. I think it is unlikely that the first and second number within the same sentence refer to different things. Of course, it is possible that both the 5K and 10K numbers are for the Model 3 only. I'm now checking this version. This looks indeed possible because I might have misunderstood the 500,000 number.

I thought 500K was the production run rate when exiting 2018. For example, if they produce 10,000 per week in the last week of 2018, that would be equal to 500,000 units/year production rate even though total production in 2018 would be much less than 500,000. However, now it looks more likely that Elon was always talking about making 500,000 cars during 2018. This is from yesterday's conference call:

54:02 Elon: Yes. I currently think that we should build to 500,000 vehicles next year and 1 million vehicles by 2020. That's 500,000 vehicles in total, Model S, Model 3, and Model X combined next year ... Source

The following is from the 4 May 2016 shareholder letter. It looks like they were talking about 500 units in 2018 back then as well.

Additionally, given the demand for Model 3, we have decided to advance our 500,000 total unit build plan (combined for Model S, Model X, and Model 3) to 2018. Source

This is from the Q1 2016 conference call:

Well, I mean, obviously if we're saying that Tesla will have total vehicle production of on the order of 500,000 cars in 2018. Source

@schonelucht, can you comment on how you read the sentence about 5K and 10K. Do you think those numbers are just for the Model 3?

 

[Model 3]

Hi, @Model 3. I think it is unlikely that the first and second number within the same sentence refer to different things.

Let's see the quote from the shareholder letter:

Our Model 3 program is on track to start limited vehicle production in July and to steadily ramp production to exceed 5,000 vehicles per week at some point in the fourth quarter and 10,000 vehicles per week at some point in 2018.

This is also clearly talking about just Model 3 production ramp. But as you say, 10k/week is 500k/year, and that is what is the expected combined production of S+3+X. Someone at Tesla must at one point have mixed some numbers here...

 

[EinSV]

Hi, everybody. I have updated the calculations based on the latest data Tesla released today in the shareholder letter. I used these data points:


The 5K and 10K numbers are for total vehicle production, not just Model 3. 10K per week is 500K per year. In today's conference call, Elon reconfirmed that Tesla will reach 500K production rate at the end of 2018. This was already known information.

After this latest change, there are some additional delays compared to what the calculations used to show. For early reservation holders, the delays are a few days. For late reservation holders, delays can be up to 86 days depending on how late you placed your reservation.

Full tax credits are still looking good until June 30, 2018.

The call and letter were clear -- Elon predicted they would reach a 5K/week run rate at some point in 2017 and 10K/week run rate at some point in 2018 for Model 3. And he is predicting the most likely scenario is that Tesla will produce 500K total vehicles in 2018 and 1M total vehicles in 2020.

I think people are stuck thinking that Tesla is or was predicting a 500K total vehicle run rate at the end of 2018. That is not what Elon said on the call. He did not explicitly discuss the total vehicle run rate at the end of 2018 on the call but implicitly the forecast is about 500K Model 3 (10K/week) plus whatever Model S and X they sell -- so something like 600+K plus total vehicle run rate by the end of 2018.

 

[Troy]

What makes things difficult is the fact that it would be very Tesla-like if those numbers were for total vehicle production. For example, Tesla advertised the longest range and the best performance numbers in the same sentence even though these two numbers didn't refer to the same car. So, I'm wondering if it is a similar case here. The first half of the sentence is about Model 3 and the second half could be about total vehicle production.

 

[ModelNforNerd]

What makes things difficult is the fact that it would be very Tesla-like if those numbers were for total vehicle production. For example, Tesla advertised the longest range and the best performance numbers in the same sentence even though these two numbers didn't refer to the same car. So, I'm wondering if it is a similar case here. The first half of the sentence is about Model 3 and the second half could be about total vehicle production.

To be completely fair, they're always rather cryptic.