Model 3 "Production Bottlenecks" lead to lower-than-anticipated Q3 delivery #s

[Barklikeadog]

When Tesla makes the same mistake over and over.....the problem is not me.

They keep promising numbers and dates and delivery and productions counts over and over and over with all of their cars - since their inception. There are tons of threads about them not being able to meet their own counts.

That's not my fault.

I wonder what would happen if samsung forecasts making and selling 100million phones next year... but woops sorry we were only
able to make and sell 40 million, that 100million was just wishful thinking that probably wasn't going to come true.
They would get destroyed over something like that. It is Enron-ish

 

[run-the-joules]

You would change the car you're planning on owning for years because of having to wait a few extra months?

If my current car has anything expensive fail, yes. I cannot be without a car for an indefinite period of time and I’m not going to deal with the hassle of buying a temporary car.

 

[run-the-joules]

As a remorseful buyer of a 2016 Audi A6, there is nothing that would drag me back to an Audi showroom for any vehicle...ever. In dealing with quality issues, I have found the Customer Relations organization (this went beyond the dealer) to be dishonest, deceptive, and unwilling to implement their warranty equally across customers and where it is clearly appropriate to deal with a brake system issue they know about. When a technician reports being directed to complete an RO with false information to support AoA's position, despite the actual car not showing the problem that AoA wants recorded, there is nothing left for me to trust in that organization.

Every brand has their crappy situations. I’m very particular about what cars I buy and the a4 and model 3 are just about the only acceptable vehicles available new, and I don’t want a used car. I’d prefer the Model 3 but I have a limit to how long I’ll wait around for it. I considered a model S to just get it over with, but it just isn’t what I want.

 

[powertoold]

Oh nooooo, the stock is tankinggg. Missed production guidance by 84%!!111!

 

[JonathanD]

I wonder what would happen if samsung forecasts making and selling 100million phones next year... but woops sorry we were only
able to make and sell 40 million, that 100million was just wishful thinking that probably wasn't going to come true.
They would get destroyed over something like that. It is Enron-ish

That's venturing into hyperbole. Samsung is a huge company that has been making electronic devices for a very long time, and they were still able to weather the disastrous Note 7 debacle. It's also absolutely nothing like Enron. Finally, it hasn't been a year, it's been 2 months and is still learning how to build the car. They may be able to catch up down the line, we don't know - and they don't either, yet. Elon spelled it out that it was going to be production hell. I was actually pleasantly surprised they got as many delivered as they did given the relative lack of sightings. What's far more important than the pace of ramp up is the quality control early on - this is the best chance to catch issues so that you don't have recalls or service bulletins for tens of thousands of vehicles later. Plus, delivered does not mean produced. They are probably spending a lot of time on cars already manufactured on QC checks, etc. So in terms of production, they may be a small bit closer to their original optimistic targets.

 

[calisnow]

by your theory, and patterns, production is slowing down. Soon the forest will become a single tree! RUN FOR YOUR LIFE!

Heh

In the long run for most people, it doesn't matter. But plenty of people are on leases or are pushing their current cars to the limits. So by stating arbitrary, incorrect, estimates - pisses off the people who are on a deadline. And for good reason. So while you can play it down that he's gods gift to man kind, other people expect the CEO of a company to not produce tons of bullshit each time he tweets.

You make a very good point here that I actually had not considered. I almost always am placing myself in the shoes of an imaginary owner of Tesla the company - not the individual needs or desires of Tesla customers on the forum. So when people say "Tesla NEEDS to do XYZ" or "Elon SHOULD do XYZ" or "Elon promised XYZ by ABC" I always immediately ask myself if their comment makes business sense for Tesla by running through the following mental filter: "Is there any quantifiable evidence that TMC Member Bob's stern warning on the forum that Tesla should do XYZ actually holds merit?" The quantifiable evidence we have to work with is sales growth and gross margins. So far, by those metrics, Elon Musk seems to be doing just fine making decisions his way - rather than the way any number of cranky whiny TMC keyboard jockeys, or clueless "journalists" would prefer him to run his business.

But - as you say, from an individual customer perspective about what meets her/his needs at this moment in time - the situation can of course look very very different.

 

[Max*]

Oh nooooo, the stock is tankinggg. Missed production guidance by 84%!!111!

I see what you did there!

 

[calisnow]

Information he's provided can be considered investment/risk guidance so he should be more careful with what he says.

You're not his corporate counsel - he has been at this for many years and the actual evidence we have is that he has not gotten in trouble with his tweets. Or if he has they must have been quiet settlements with NDA's - which can be considered just another cost of doing business while building buzz. Seriously - I am a business owner and the cold, unemotional way I look at settlements is simply another cost of doing business. That's the only rational way to guide my actions - "If I do X, and somebody lawyers up, I may have to pay Y." The decision then is inputting the odds of a lawyer being involved and the expected value of the settlement, adding in a variance - subtract that number from the expected value of doing X - and then you have the answer for whether or not to do X. The same would go for these tweets - which again, as far as we all can tell - are working fine.

That would be great if there were no upper limit to production capacity, but we already know that top end is somewhere around 10,000-15,000 units per month at the Fremont plant.

Again - doesn't matter. Some broken hearted Tesla fans is an irrelevant drop in the big bucket. This is the real world.

No, but they might buy another Mercedes, BMW, Lexus or other premium compact sedan they are coming from.

Let them. Who cares. There are 10 more clients waiting for their slot. Elon does not have a problem here lol - only pissy TMC geeks have a problem - and they do not matter.

 

[calisnow]

Far fewer U.S. model 3 buyers may receive a tax credits than expected. This is probably part of Tesla's choice to lie about being in production.

Maybe so - also irrelevant.

 

[calisnow]

If Tesla is smart they will do everything possible to maximize the tax credit for as many of their buyers as possible. Tax incentives have been shown to have a direct effect on EV Sales. In other countries where similar incentives have expired EV sales have cratered.

Irrelevant. Prior EV's were demand constrained so tax credits mattered. The Model 3 is the most production constrained product in decades. The long run game has to be to succeed without tax credits and in the short run demand is so high that it wouldn't affect sales one bit if all tax credits were gone tomorrow because for every buyer who jumps ship without a tax credit 5 more are waiting to take their slot because the Model 3 is an insane value - it has no competition.

 

[calisnow]

I won't cancel my order to buy a Bolt, but it's entirely possible I'll do it to buy an Audi A4. I'm not a hardcore EV leghumper, so getting another ICE doesn't bother me really. Would I prefer an EV? Sure. Am I going to buy a car I don't like to get an EV? No.

Then buy one - Tesla won't miss you. Again - the car is so production constrained with such insane pent up demand that you will be doing Tesla a favor if you go buy an A4. You'll be doing yourself an injury but that's a different issue lol.

 

[voip-ninja]

Irrelevant. Prior EV's were demand constrained so tax credits mattered. The Model 3 is the most production constrained product in decades. The long run game has to be to succeed without tax credits and in the short run demand is so high that it wouldn't affect sales one bit if all tax credits were gone tomorrow because for every buyer who jumps ship without a tax credit 5 more are waiting to take their slot because the Model 3 is an insane value - it has no competition.

Not irrelevant, Musk has already tweeted confirmation to someone who asked if Tesla would try to time deliveries to maximize the tax incentives.

Now whether or not he was being truthful (as you've pointed out he's a serial liar) remains to be seen.

We also don't know what the demand for the Model 3 will be when the incentives are gone. How many people who made a pre-order later than the first few months, who will not be able to take advantage of it might realize they are not going to be saving $7500 on the shiny new car? We just don't know.

The product is in very high demand, based on the limited information the public has. So we can agree on that.

 

[run-the-joules]

Then buy one - Tesla won't miss you. Again - the car is so production constrained with such insane pent up demand that you will be doing Tesla a favor if you go buy an A4. You'll be doing yourself an injury but that's a different issue lol.

I know tesla doesn’t care, and I’ve encouraged others to cancel to move me up. I don’t *want* to get something else, but it’s frustrating to watch tesla overpromise over and over and over. I should know better than to put faith in someone who just wants my money, but I’m a moron

 

[calisnow]

I doubt Tesla will have much control over when tax credits for buyers expires. The most likely scenario will be that they will still be trying to ramp M3 production for U.S. customers as they hit the volumes that begin the reduction of credits.

The upside may be a longer period of credits in the U.S. for the S/X.

I'm not so much discouraged by the Sept. production volume, but rather the apparent state of the software.

Don't be discouraged by the state of the software and the forum hand-wringers. As my signature says I have both AP1 and AP2. AP2 is improving faster than AP1 did and the releases are coming fast and furious - people have the tiniest memories around here. AP2 is fantastic and getting better. If anybody happens to be in Wisconsin (where I am at the moment) and wants a ride/demo of AP2 on various roads I'm more than happy to show you. BTW I do not own one share of Tesla stock - I merely give my opinion. I drive a Tesla but that stock is waaaaayyyyyyy too stratospherically priced for my taste. I'm buying GM stock.

 

[calisnow]

The stock at this point even factors his fantastical predictions into the price.

You have no way to know that. The stock may factor in the Musk BS-Optimism factor into the price as well. If you buy into efficient market theories then a publicly traded stock in a liquid market accounts for all available information. All info includes Musk's long history of making nonsensically optimistic time frame predictions. *BTW I do not personally buy into the efficient market - I'm into behavioral finance and value investing - but the part about the stock price accounting for all available information makes sense. A stock like Tesla is so scrutinized it would be naive to think that the Musk BS factor is not already factored into the current share price.

 

[Sportstick]

Every brand has their crappy situations. I’m very particular about what cars I buy and the a4 and model 3 are just about the only acceptable vehicles available new, and I don’t want a used car. I’d prefer the Model 3 but I have a limit to how long I’ll wait around for it. I considered a model S to just get it over with, but it just isn’t what I want.

Yes, every brand does have their occasional problems. My issue is what the behavior of this organization revealed about their basic culture for dealing with customers. I've had cars with problems before, but I've never dealt with a manufacturer who, to me, was this fundamentally disrespectful and dishonest. (And, I'm not even discussing their corporate culture which lead to their emissions "problem".) It doesn't matter anymore how good their cars may/may not be, nor how long VAG extends warranties if they will not be honest nor implement warranty repairs without having to resort to litigation. You know what they are capable of doing. Best of luck with your decision...

 

[Max*]

@calisnow do you have a Model 3 reservation?

You sound like a friend of mine. He's a stock holder and worships Elon. I'm an owner and have a more realistic opinion of his tweeting/etc. deadline. To him, Elon can do no wrong and it's all about the big picture. To me, while I care about the big picture, I care about me, and to me this didn't come as a surprise, but at the same time I would've been happier if they kept to their hypothetical delivery S-curve ramp, which would imply that I would get my car on time.

Don't get me wrong, I might still get my car on time, but this delivery schedule just shows that the probability of that happening went down.


To add another perspective that you may not have considered. The 3 is for my wife. She's anxiously waiting for it, but if it actually is delayed, she wont wait indefinitely and will move to a different car. That coupled with all the trouble I've had with my S, it's giving her cold feet.

You're right, when looking at the big picture, it's not a big deal at all. Whoopty do, Tesla lost 1 potential sale out of 500k reservations.

Tesla was light years ahead technologically maybe ~2-3 years ago, but other manufacturers are catching up with L2/L3 technologies and there are more EVs on the road now (most don't compare, but there will be even more in the coming years). IMO Tesla still has 2 yuuuuge advantages - the core EV product and the charging infrastructure. The more the 3 is delayed, the higher chance another manufacturer would come out and start closing in on one of the big advantages Tesla still holds.

But when you look at the small picture, how does a company stay successful? By keeping the masses happy. Do you think constantly under-delivering and over-promising when there is competition will keep the average Joe-Shmoe happy for long?

 

[calisnow]

I do care that the CEO of the company is a somewhat delusional genius.

Delusional? What evidence do you have for that claim? Musk is vastly more accomplished than any of us on this board - and we are a pretty damned accomplished group of people if I do say so myself. He is a lot of things - but the history of his business success shows anything except a delusional man at work. Impossible public claims do not make him delusional - they may make him very very shrewd.

 

[run-the-joules]

Yes, every brand does have their occasional problems. My issue is what the behavior of this organization revealed about their basic culture for dealing with customers. I've had cars with problems before, but I've never dealt with a manufacturer who, to me, was this fundamentally disrespectful and dishonest. (And, I'm not even discussing their corporate culture which lead to their emissions "problem".) It doesn't matter anymore how good their cars may/may not be, nor how long VAG extends warranties if they will not be honest nor implement warranty repairs without having to resort to litigation. You know what they are capable of doing. Best of luck with your decision...

Hopefully tesla provides some kind of actual guidance and doesn’t completely poop the bed with the ramp, then I don’t have to worry about it. I’ve owned a VW and an Audi before and the idea doesn’t thrill me, I assure you.

 

[calisnow]

I know tesla doesn’t care, and I’ve encouraged others to cancel to move me up. I don’t *want* to get something else, but it’s frustrating to watch tesla overpromise over and over and over. I should know better than to put faith in someone who just wants my money, but I’m a moron

You are not a moron and Elon does not just want your money. If he just wanted your money he would be in a different business. As for his overpromises - the cure for your frustration is simply to build in a mental BS filter that applies a reduction value to his promises. You will find your expectations are no longer dashed and most importantly - the product he actually does give you in the end is better than anything else you can purchase. That is why I have two Model S's and have stopped buying German sedans. The day they make something that can compete with the entire Model S package - I'll consider it. For now they don't.