Model III - Your Case: On Time or On Jonas Time?

[Gerasimental]

3Q17 - <1000
4Q17 - 2500

1Q18 - 5000
2Q18 -15000
3Q18 - 50000
4Q18 - 75000

FY19 - 500000

I think that some cars will be delivered in Q3 2017, in order to send a message, in order to appear on time, and because I believe Elon genuinely wants to get these on the road as fast as possible. Nevertheless I think deliveries will ramp slowly at first due to 'unknown unknowns'. The low numbers in 4Q17 and 1Q18 are mainly to account for probably production stops while bugs are ironed out and production is optimised.
Each individual Model 3 may be far simpler to build than a Model X, but the volume is an order of magnitude greater, and the assembly methods are probably at least partly new (Juggernaut v0.5) - these two factors will mean that there are likely to be some early hiccoughs which may cause production to stop for a few days to a few weeks.
This will result in a low total number of deliveries in the first two full quarters of production and maybe into the third. Once these are ironed out, the floodgates open.

 

[3Victoria]

I think they are on time and production will start in 2016q3 to VIPs and employees. Ramp will start in earnest in 2016q4. As EM says predicting accurate numbers during the initial non-linear have of the S curve is a fools errand. I do believe they will achieve 400k run rate by the end of 2018. They have 6 months to build the line. Initial cars may get built on one of the existing lines. I don't want a job organizing the delivery logistics.

 

[NannerAirCraft]

I expect Tesla to at the absolute least deliver at least a coupler Model 3's in 2017. If they don't I would be surprised and very surprised if they didn't start in Q1 of 2018. It's hard to tell how many deliveries they'll have as you don't know when the ramp will start. If they don't start delivering until November/December I think they might deliver somewhere around 1000-5000 cars. If they start deliveries in September and don't encounter too many issues ramping up I could see them delivering 10,000-30,000 cars by the end of the year. I'm thinking they start deliveries late September/Early October and deliver about 15,000 cars by the end of the year and be on track to delivering at least 300,000 Model 3's in 2018.

 

[SwTslaGrl]

I think the first Model 3 deliveries will be on time 3Q17. To give the many reservation holders more choice it's possible they try to mix in Model Y in 2018. At least if 3 an Y share most of the components except for the form factor. Just my guess.

 

[3Victoria]

... it's possible they try to mix in Model Y in 2018. At least if 3 an Y share most of the components except for the form factor. Just my guess.

We are pretty sure the Y is coming. We worry that the Y timing is problematic. However, if the Y is essentially just a different set of body panels, then introducing it may be both low risk and easy to accomplish, with almost no development costs. So including 3s and Ys in the same line may be a smart move. TM will need to evaluate the effects on demand and the possible downside.

However, if one's 3 reservation let you choose a 3 or a Y without impacting others, what's the harm?

 

[JRP3]

) Tesla will want as many cars as possible in employee hands so they will first deliver all employee cars, regardless of configuration.

Except Tesla will be extremely production constrained for a while and Elon has said the initial run will be higher end models. Working in low margin base models does not make sense and does not seem to be part of the stated plan. I don't expect to see any base or near base Model 3's until well into 2018.

 

[igotzzoom]

I have my fingers crossed to get my Model 3 around May-June 2018. If it's within that time frame, give or take, I'll be happy. I am not a current Model S owner, but I did put in my deposit on 3/31/16.

 

[dennis]

We are pretty sure the Y is coming. We worry that the Y timing is problematic. However, if the Y is essentially just a different set of body panels, then introducing it may be both low risk and easy to accomplish, with almost no development costs. So including 3s and Ys in the same line may be a smart move. TM will need to evaluate the effects on demand and the possible downside.

However, if one's 3 reservation let you choose a 3 or a Y without impacting others, what's the harm?

Tesla has and will continue to have much more demand for the Model 3 than they can supply in 2017 and 2018. Their #1 goal is ramp production as quickly as possible to satisfy that demand. There is no reason to introduce a new model and create both additional risk and additional demand that can't be satisfied.

As much as many of us would like to be able to buy the Model 3, it makes no business sense for Tesla to introduce and deliver it before 2019.

 

[dennis]

Except Tesla will be extremely production constrained for a while and Elon has said the initial run will be higher end models. Working in low margin base models does not make sense and does not seem to be part of the stated plan. I don't expect to see any base or near base Model 3's until well into 2018.

IMO Tesla has a different purpose for employee M3's than they do for early customer M3's. The employee car deliveries are to wring out as many production and use issues as possible without tarnishing the quality reputation of the Model 3 with public postings by early customers, as happened with both S and X. This is much more important than how much revenue they get per employee car.

Once that phase has been completed, I agree they will want to maximize their revenue by delivering the highly optioned customer cars first.

 

[JRP3]

The employee car deliveries are to wring out as many production and use issues as possible without tarnishing the quality reputation of the Model 3 with public postings by early customers, as happened with both S and X.

Agree, and to find as many issues as possible would it not make more sense to have as many cars with as many features as possible being produced? You won't find an issue on a part or feature that's not in a vehicle.

 

[3Victoria]

.
As much as many of us would like to be able to buy the Model 3, it makes no business sense for Tesla to introduce and deliver it before 2019.

Yes, I think that is generally understood. However, I was trying to point out that the Y may not be a big change from the 3, may not pose any substantial risk, and would make many 3 reservation holders happy as some really wanted a hatchback.

While personally I want one of each, I want Tesla to do what is right for a smooth build out.

Agree, and to find as many issues as possible would it not make more sense to have as many cars with as many features as possible being produced? You won't find an issue on a part or feature that's not in a vehicle.

Since the base models may have equipment not in the optioned cars, it is important to test all configurations.

 

[JRP3]

Since the base models may have equipment not in the optioned cars, it is important to test all configurations.

I think the opposite is more likely. Optional features are usually additive, and Tesla has a history of shipping some of the same hardware in all vehicles while leaving it disabled in lower end models. Can't test it if it's not turned on.

 

[3Victoria]

I think the opposite is more likely. Optional features are usually additive, and Tesla has a history of shipping some of the same hardware in all vehicles while leaving it disabled in lower end models. Can't test it if it's not turned on.

Maybe. Things like low end seats, non-hud, smaller battery pack, etc need to be tested for usability, comfort, wear, etc. I am sure Tesla has a handle on it.

The real point being is that the employees will receive the cars, with the options that need testing, before the rest of us.

 

[doctoxics]

Tesla has and will continue to have much more demand for the Model 3 than they can supply in 2017 and 2018.

I have serious doubts that Tesla will ever match the demand for Model 3! Perhaps 10 years out.

 

[Clprenz]

Call me hopeful:
2017
Q3: 5500
Q4: 51000

Elon has expressed that this car is built for volume and ease of production. I think the issue will be logistics and if third parties cause problems. I'm hoping for production ramp to start in mid august. Management team and color on the subject has risen my confidence.

 

[neroden]

Call me a nonbeliver in smooth ramp-up curves, but here's my order-of-magnitude guess:
2017 Q3: 0
2017 Q4: 15,000
2018 Q1: 80,000
2018 Q2: 100,000

 

[bonaire]

neroden, per-quarter? That's quite aggressive and perhaps well beyond even what Tesla is speculating.

 

[neroden]

neroden, per-quarter? That's quite aggressive and perhaps well beyond even what Tesla is speculating.

To get to a 400K/year runrate, they have to get to 100K/quarter. I'm running on the theory that they'll basically go from nothing to nearly the full rate quite suddenly.

I'm probably wrong. But I'm making a point: most people are modeling the ramp-up the way they would for a traditional car company training humans on the assembly line to work faster. That's not how robots ramp up.

My point is basically, if I'm wrong and the ramp-up takes longer, then I think it looks like:
2017 Q3: 0
2017 Q4: 200
2018 Q1: 15,000
2018 Q2: 80,000
2018 Q3: 100,000

 

[bonaire]

It has to be far more than a few in 17Q3, and then thousands in 17Q4. Financing companies will want to see serious throughput of Model 3 in late 2017 "as promised" otherwise, gaining the funds to buy enough production parts and hire enough workers and build out sales/service centers won't be as easy. It's quite a challenge plus the pricing needs to hold strong to the original promises too as they can't just ramp up options prices substantially to make Model 3 "well optioned" amount to the base cost of a Model S.

I'm interested to see what these "special robots" will do that everyone keeps talking about. There could be some advancement but it does sound a lot more like talk than substantive actuality. And we know that every good idea starts at first with an idea, talk, planning and then execution. However, it's really big talk and many in the auto industry have questioned the statements numerous times since the "machines making the machine" verbiage was used.

Of course, like everything - time will tell. Could be an interesting time in the next couple years. Volume will certainly rise - I still don't think anything looking like profits are possible until the economic forces stabilize. One issue is to get past about 400k units a year, another Fremont is needed, another GF and so on - all amounts to $5 B or more in new CapEx just to go from say 400,000 - 440,000 a year.

Let's get past 90,000 a year first before speculating "how easy it is" to hit 400,000 a year. And there is a moderate chance that 2017 (based on your numbers) is still not going to beat 90,000 a year S+X+3 if they slow-build the first round of Model 3. If they can do 10,000 Model 3 in 2017 - that will be a good thing. But if Model 3 is slow out of the gate as you said - then they could intro a low-end Model S 50 to get people into "something" in the mean time (much like Model S 60 2-year leases did in Q3).

 

[ggies07]

There's now way the first 115,000 of us that reserved a car before the unveiling will get their car in 2018 2Q or later. They won't let that happen. That would be quite a slow ramp up.....