Model X Production to Hit 1k/week in Q2

[highedu]

"In January 2016, we limited Model X production for a period of time to maintain our quality production standards. We are already seeing improvement from these efforts and we are now significantly increasing our Model X production throughout the balance of the quarter. We anticipate approaching a Model X production rate of 1,000 vehicles a week in Q2."
http://files.shareholder.com/downlo...3C-4892824F058D/Q4_15_Tesla_Update_Letter.pdf

So 1k a week at earliest in April

 

[ankitmishra]

So maybe, 4000 X in Q1 and 10000 X in Q2.

 

[MrBoylan]

So maybe, 4000 X in Q1 and 10000 X in Q2.

Unlikely. He clarified on the call that the "1,000 Xes per week" would not be a quarterly average in Q2, but a potential peak toward the end of the Quarter (i.e., last week of Q2). I don't think it's likely they'll deliver 14K Xes in the first half of the year. There are still issues that could stand in the way of reaching the 1,000/week goal, some known, some unknown.

 

[highedu]

I know we have a lot of debates on this forum about X production volume, but what I initially posted from shareholder letter and what was said in the conference call is the "best" information available

that being said....I thought the analyst questions were not very good, especially in digging into the real production ramp status on X

From shareholder call related to the X:

1. $67M in ramp-up cost in Q4 related to X
2. Paint shop can process 10k cars/week in support of S, X and 3
3. Q4 parts ramp-up for X drove WIP inventory
4. March to start seeing reviews in magazines
5. Too many great things all at once in X, would have been better to do fewer things with first version - cause X ramp to be slow
6. Best car ever - not sure anybody will make a car like this again, including Tesla
7. Falcon door, glass windscreen not bottleneck anymore - were in Q4
8. 3-4 weeks constraint was chrome finish on front window/seal
9. Seals had to be redesigned
10. 2nd row seat issues - now insourced
11. No more fundamental issues
12. 1000/week is peak production week in Q2 mid to Q2 end; average is 700-800/week
13. Bulk investments in X were in 2015
14. didn't answer current x production rate question twice - for a valid reason (unforeseen issues)

 

[MrBoylan]

11. No more fundamental issues

That's the part that concerns me actually. No more major issues. But minor issues can hold up production too. They never came out and said, "everything is resolved and we're ready to ramp up the X."

Maybe they're just being more cautious about over-promising and under-delivering.

 

[Drivin]

that being said....I thought the analyst questions were not very good, especially in digging into the real production ramp status on X

didn't answer current x production rate question twice - for a valid reason (unforeseen issues)

The analysts questions were fine, they were asking what they were supposed to be asking.

The "unforeseen issues" line was amusing.
Does Tesla think that every other company that produces products never has any unforeseen issues?? LOL.

Another amusing comment from one of the live blogs on the earnings:

A history lesson as we wait for conference call to begin. At beginning of 2014, Tesla predicted 35,000 deliveries. They eventually brought that down to 33,000, and delivered 32,733. At the beginning of last year, they predicted 55,000, then brought it down to 50,000-55,000, then 50,000-52,000. They hit that last range. this year, prediction is 80,000-90,000.

Unforeseen things I guess.

 

[retinaguy]

This from zerohedge:

 

[mzpolo]

Lets not confuse Tesla manufacturing capacity with that of a more seasoned car manufacturer. The tesla factory is not big enough for high volume output. the max number of cars of any variety the could push out the door is probably no more than 125,000 to 150,000 per year.

 

[anon]

Lets not confuse Tesla manufacturing capacity with that of a more seasoned car manufacturer. The tesla factory is not big enough for high volume output. the max number of cars of any variety the could push out the door is probably no more than 125,000 to 150,000 per year.

It's worth noting that the factory used to build 500,000/year before Tesla bought it. The stamping equipment and new paint shop are sized for that level of production. However, the body and and general assembly lines will need an upgrade for Model 3.

 

[Darryl]

Even though they use robotics in the early stages of production all of the interior and detailed work is done by hand. I know it is less than 50% done by machine. So it is not like turning a dial and produce more. To increase production you would have to hire 100's of people and train them to do detailed work. I know they are already trying to hire but still have a lot of vacancies. Once they work the kinks out of the technical issues you are going to have to ramp up workers which is even more of a challenge. When this was the GM/Toyota plant it hired over 4500 people and producted 500k cars per year. It was the worse plant GM owned.

 

[johnnyduval]

So in a dream scenario they may roll out 12,000 by the end of June, and maybe another 12,000 by end of September if all goes to plan (which it never does).

Realistically they will probably still be building the current 30,000 reservations in December 2016.

Which is all fine, just trying to work out a delivery date for me in Munich and I reckon Spring 2017

 

[Robbo]

hey never came out and said, "everything is resolved and we're ready to ramp up the X."

No but the frank exchange below indicates to me that Elon feels they will be ramping shortly.

<Q - Mike Ramsey>: Do you feel like the company is on the right track, and that you're past
some of your hiccups?
<A - Elon Reeve Musk>: Yeah. I feel very good about things right now. I mean, it was – the last several months have
been quite excruciating, I'd say. I mean, many late nights and weekends. But I think we're through the worst of it at this
point.​

 

[Drivin]

They never came out and said, "everything is resolved and we're ready to ramp up the X." .

From January of this year:

Production of its new electric SUV "has been increasing exponentially," the company said Sunday, adding that it's on track to start making 238 Model X SUVs per week.

I doubt they are increasing exponentially if things weren't resolved - since that would be a recipe for a service and PR nightmare.

Exponentially!!
Yeah!