Production rate reveal... and a new announcement?

[jkirkwood001]

Let's be honest. Lover or hater, the missed production numbers are not an encouraging sign. We're all waiting with baited breath for the Q1 M3 production figure. How close - or how far - will it be from the promised 2,500 / week? And you can't ignore paying the bills forever, no matter how exciting your vision. Vision don't pay the bills.

Personally, I think they'll miss but be generously close, maybe 6,000 cars in March barring any pro-rated shenanigans like 17Q4 (which they'll probably do anyway).

So I think they'll want to announce something to distract from the missed projection again.

I predict they'll announce availability of AWD. Tesla's already been registering AWD VINs, we've seen test models in the wild, and it would even increase the average price and their unit margin (very important right now). AWD availability would also open up half the wait-listers.

The other potential announcement would be availability finally of the short-range (SR) version. That would open up the rest of the wait-listers and silence many of the haters*, but it would hurt the profit margin they so desperately need. I think that's less likely, although if in fact that model has less physical battery cells, it might allow Freemont to produce more cars with constrained Gigafactory production.

What do you think they'll announce besides the Q1 production figures? or will they have no Tesla spin this time?

* I'm discounting the white interior for the sake of argument.

 

[ℬête Noire]

Personally, I think they'll miss but be generously close, maybe 6,000 cars in March barring any pro-rated shenanigans like 17Q4 (which they'll probably do anyway).

I don't expect they'll even break 5000 cars. I'd consider 4200 (1000/week average) an optimistic number.

It's actually the last week that I'm most interested in. Even it's a burst "pro-rated" for 3 or 4 days rate, it'll give an idea of where their production progress is at.

 

[TT97]

I agree with the 1000/wk estimate, however, as they were down for a few days, I am guessing closer to 3,500. I do think they will get close to the 2,500/wk on a "burst" basis but none of those will be in the March sales and worried if the burst is sustainable. In December, they extrapolated 1,000/wk but took a while to get consistently close to that.

As far as any announcement, I would selfishly be annoyed if they add AWD - with an "April-June" window, I am getting closer to an invite and adding the AWD option will push me way down the line as there are many ready to configure that are just waiting for AWD. However, I don't think they would add AWD as it will add complexity to the production line and the last thing Tesla wants is to slow down production. Same applies to the SR - Tesla needs to build the battery sled regardless - putting less batteries on the sled is not going to raise production rate yet will cut their profits (and there is still no word of what an non-PUP looks like).

If they were to to make an announcement of the sort - I could see them adding the white interiors. It wouldn't slow down the production line and they could charge an additional premium for it.

 

[S3XY]

They're going to say although they missed the numbers they had stopped the line to make improvements. Plus they installed the new line that is fully automated. This will allow them to increase production much faster than before and they had reached the 2,500/wk rate they had projected. As for an announcement it's too early for the Y and I'm not expecting anything big enough to be used as a distraction.

 

[jkirkwood001]

There're other threads on expected production numbers. My number's optimistic, yours is pessimistic, maybe in between..? I do think they'll hit 1,800 in the last week.

Do you think they'll add any announcement to the production number, @ℬête Noire?

I don't expect they'll even break 5000 cars. I'd consider 4200 (1000/week average) an optimistic number.

It's actually the last week that I'm most interested in. Even it's a burst "pro-rated" for 3 or 4 days rate, it'll give an idea of where their production progress is at.

 

[HillCountryFun]

I expect around 6500 for March and 12000 for Q1 but I'm still hoping for 300 to 350 per day at the end of March.

 

[Webeevdrivers]

I expect around 6500 for March and 12000 for Q1 but I'm still hoping for 300 to 350 per day at the end of March.

I didn’t know they even gave a month of March production goal. I thought it was just a weekly production rate goal. What was the March month goal???

 

[boaterva]

I dunno about increasing complexity with adding options before EOQ 2. I would think they may wait until July 1 when they may announce the 200K being met and all restraints are lifted to add a new item to the mix. That is also the deadline for the 2500/week.

My two cents.

 

[Daniellane]

I think a ramp implies the rate achieved at the end of the period. Not any averaged quality.
Like 0-60 in 4.1 seconds
Speed is only relevant at the end of the period.
So theoretically if they at producing 500 cars a day on the last day of the quarter (assuming a 5 day workweek)
Obviously that number would have to be both sustainable and continue to increase exponentially toowards 1,000/day to reach the next goal of 5,000/wk.

 

[scrapps]

I think they’ll hit about 1500-1700/week for the end of month but as someone else mentioned about a doubt that’s sustainable with their current setup. I think we’re likely to see stocks tank as investors don’t care about AWD announcements at this point, they want to see the company producing enough vehicles to be profitable.

 

[jkirkwood001]

I dunno about increasing complexity with adding options before EOQ 2. I would think they may wait until July 1 when they may announce the 200K being met and all restraints are lifted to add a new item to the mix. That is also the deadline for the 2500/week.

My two cents.

I agree @boaterva , but they are getting a lot of flak lately on all fronts (production misses, fatal accident, recall), I believe they need some good news.

I'm new to the Tesla obsession. Besides 2008, is the current "crisis mode" the worst since then? Are they more likely to go bankrupt now than at any point since 2008?

 

[eye.surgeon]

history makes it pretty easy to predict. They'll miss their projected production rate by about 40% and have some reason why that will be presented as though it was out of their control. Then they'll make an even bigger production goal for right around the corner. The stock will drop for 3 days and then return to the pre announcement level.

 

[jkirkwood001]

I didn’t know they even gave a month of March production goal. I thought it was just a weekly production rate goal. What was the March month goal???

You're right, the target is weekly. I think elsewhere I posted my guess of 1,800 / week.

 

[insaneoctane]

I agree that the vision doesn't pay the bills. However, how do we figure the impact to the stock price with just a delay? For example, they will very likely miss their Q1 production target. This isn't their first miss, as this is the miss to an at least twice adjusted number. So, they seem to keep missing. BUT, in the grand scheme of things, how big of a deal is this? Specifically, let's say after all the missed quarters they finally hit 5K/week in Q3....Assuming this gets them to the profitability and gross margin numbers they say, missing by a few quarters doesn't seem like it will matter in the big picture. I agree it hurts the stock in the short term (just look at it now), I'm just not so sure it doesn't just all blow over as long as Tesla gets there within a few quarters (which they seem on track to do). They are guilty of being overly ambitious, but that seems likely to be overshadowed by amazing accomplishments even if they deliver late by few quarters. /speculation

 

[jkirkwood001]

It's not the devotees like us lending Tesla money and buying their bonds. It's dispassionate bankers and institutional investors who wanna make money - promises don't count. If Tesla keeps not making money like they promise they will, lenders will charge more when they need $1B+ to finish Q3 (or they'll stop lending altogether = bankruptcy). That's the real world of operational financing, not us who think Tesla is a really cool company with great intentions.

I agree that the vision doesn't pay the bills. However, how do we figure the impact to the stock price with just a delay? For example, they will very likely miss their Q1 production target. This isn't their first miss, as this is the miss to an at least twice adjusted number. So, they seem to keep missing. BUT, in the grand scheme of things, how big of a deal is this? Specifically, let's say after all the missed quarters they finally hit 5K/week in Q3....Assuming this gets them to the profitability and gross margin numbers they say, missing by a few quarters doesn't seem like it will matter in the big picture. I agree it hurts the stock in the short term (just look at it now), I'm just not so sure it doesn't just all blow over as long as Tesla gets there within a few quarters (which they seem on track to do). They are guilty of being overly ambitious, but that seems likely to be overshadowed by amazing accomplishments even if they deliver late by few quarters. /speculation

 

[Andrew]

Does anybody here think they actually produced 500 cars on Thursday?

What's most worrisome is that if the negative sentiment continues, failure could be due primarily to the Golem Effect (if that's the right term?). Tesla is finally on the cusp of "breaking out" into being a mass-market manufacturer, and they literally just need to get through the next ~six months. If they are unable to maintain the cash flow during that time, that's what could kill the company. Yet, no fundamentals have changed. The product, of course, is phenomenal, and the slower-than-announced production ramp is completely unsurprising.

I don't think anything mentioned in this post so far would be a significant enough announcement to stem the current bleeding... but Elon is masterful at this kind of thing, so I'm at the edge of my seat...and happy to buy more TSLA if it drops further on Monday!

 

[commasign]

Announcing AWD and Performance variants would be a good thing from an investor point of view. It raises the average selling price (ASP) with minimal increase in cost, especially for the performance variant.

 

[boaterva]

I agree @boaterva , but they are getting a lot of flak lately on all fronts (production misses, fatal accident, recall), I believe they need some good news.

I'm new to the Tesla obsession. Besides 2008, is the current "crisis mode" the worst since then? Are they more likely to go bankrupt now than at any point since 2008?

When one accident, mainly because a piece of DOT hardware wasn't replaced, causes the media to spin out of control, it's nuts.

I believe Elon when he says he wish it were a private company. Doesn't anyone have AP software? Does it work perfectly? Does no one else ever die? Maybe we never know when it was in use because <no other brand> defined as AP. sigh...

As for the 'announcing new option', I'm really wary of them slowing down production with another factor in the mix. Unless they can churn out AWD cars as quickly as everything else (yes, I know)....

 

[jkirkwood001]

I completely agree with everything you say!

And I'm a believer - I bought for the first time Wednesday at 265 (you can't both be safe and wily - buy now or don't buy! ☺ I don't have a mortgage, and my life savings are 75% into index fund ETFs + 20% into bonds. Buying individual stocks goes against my successful investment strategy, but Tesla is just too much fun and inspiring, I took the bait!)

Does anybody here think they actually produced 500 cars on Thursday?

What's most worrisome is that if the negative sentiment continues, failure could be due primarily to the Golem Effect (if that's the right term?). Tesla is finally on the cusp of "breaking out" into being a mass-market manufacturer, and they literally just need to get through the next ~six months. If they are unable to maintain the cash flow during that time, that's what could kill the company. Yet, no fundamentals have changed. The product, of course, is phenomenal, and the slower-than-announced production ramp is completely unsurprising.

I don't think anything mentioned in this post so far would be a significant enough announcement to stem the current bleeding... but Elon is masterful at this kind of thing, so I'm at the edge of my seat...and happy to buy more TSLA if it drops further on Monday!

 

[nvx1977]

I completely agree with everything you say!

And I'm a believer - I bought for the first time Wednesday at 265 (you can't both be safe and wily - buy now or don't buy! ☺ I don't have a mortgage, and my life savings are 75% into index fund ETFs + 20% into bonds. Buying individual stocks goes against my successful investment strategy, but Tesla is just too much fun and inspiring, I took the bait!)

I can picture you screaming YOLO as you made the TSLA stock purchase.