Since TM does not regularly report production or delivery numbers/rates we are all left to speculate. The best info (albeit not perfect) is from VIN assignment numbers. A member of this forum and TM forum has been collecting these numbers, doing some regression analysis, and graphing his results. Using this information (again for what it is worth) production numbers have exceeded 600/week for much of Q3 and approached 700 some weeks.
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Since TM does not regularly report production or delivery numbers/rates we are all left to speculate. The best info (albeit not perfect) is from VIN assignment numbers. A member of this forum and TM forum has been collecting these numbers, doing some regression analysis, and graphing his results. Using this information (again for what it is worth) production numbers have exceeded 600/week for much of Q3 and approached 700 some weeks.
I suppose it could be the TMC echo chamber, but I've heard multiple times Tesla has been pushing for an annualized run rate of 35000, so 700 a week. The Q2 shareholder letter had some emphasis on removing bottlenecks and investing in production capacity to meet "world wide demand" (that emphasis from the shareholder letter).
I think it goes somewhat hand in hand with Tesla pushing for 25% gross margin. Part of that is cost reduction, but part is efficiency and producing more cars per week off the line is an efficiency increase.
bonnie
I play a nice person on twitter.
I think quite a few people are being overly optimistic. I'm with DrDave on production targets. As of mid-September, it is my belief they had not yet quite hit 600/week. I have no doubt they will reach their targets -- but I don't believe they are there yet.
True, I guess the question is what is the target? If Tesla wants to sell 40k next year, that requires 800/week so even at 700/week they'd have some non-trivial work to do by year's end.
Bonnie and DrDave - can you share your reasoning (and/or data points) for your 550-600/week estimates at end of Q3?
bonnie
I play a nice person on twitter.
It's probably not going to be a satisfying answer. It has more to do with gut than any actual data points. (If I had actual data points, someone would be guilty of insider trading.) Years of knowledge of manufacturing ramp up (read 'and associated problems to be worked out as speed picks up') and bits of conversations with various people. To do it right takes time.
To steal a line from a favorite software project mgmt book, "I don't care how many women you put on the job, it still takes 9 months to have a baby." The more people, the more interactions, the more complicated it gets. Build it slowly and it will stay under control. Ramp too quickly and you have a manufacturing line that will crumble at the first problem.
Realistically, they may MAY have hit 600 by the end of the quarter. But I'm willing to bet that they had not by mid-September.
DrDave - can you share your specific reasoning (and/or data points)? I can't imagine they'd be exactly the same as Bonnie's. I just want to seek clarity.
bonnie
I play a nice person on twitter.
No, just the point in time that I had a definite opinion about where things were. I doubt two weeks more to EOQ would have made much of a difference.
kevin99
Member
By the same token, it is prudent to re-examine the data points for the 700/week or even 800/week by Q4 2013 statement. I did a search on what is been discussed, but have not found a solid source. Most of the number are based on he says, she says or my guesstraplolation. I am all too willing to embrace these impressive numbers, but it can't be just my willingness.
This is the latest Musk video I could find. It's from Aug 20, Musk says they are at 500 to 550 per week. Also says he hopes to be above 600 by end of the year and complains about supplier issues.
See from 8min point: EenVandaag Wie is Elon Musk? Full interview 20-08-2013 - YouTube
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Also in the same video from 7min mark, he says, wait time in US will get very long as they are allocating half the production for Europe. It's about 2 months now. I only see S85 go from 2 months waittime to "2-3 months" at the same time S65 dropped from 3months to "2-3 months". What could this mean? US demand is going down??
See from 8min point: EenVandaag Wie is Elon Musk? Full interview 20-08-2013 - YouTube
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Also in the same video from 7min mark, he says, wait time in US will get very long as they are allocating half the production for Europe. It's about 2 months now. I only see S85 go from 2 months waittime to "2-3 months" at the same time S65 dropped from 3months to "2-3 months". What could this mean? US demand is going down??
Weekly production numbers are all too important because they allow us to formulate somewhat accurate quarterly production estimates. That's why anyone sharing weekly production numbers should also back it up with their reasoning in detail. For anyone posting estimated weekly or quarterly production numbers, I'm going to ask for detailed reasoning if not already included.
The 700/week number was something a few people shared several weeks ago. It comes from conversations from store employees. It was also a number brought up in sleepyhead's investnaire article (now removed).
The 800/week number was not for end of 2013 but something Elon mentioned they'd hope to achieve by end of 2014.
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Thanks tslafan123 - I'd say this is probably one of the strongest data points we've got so far for weekly production rates in Q3.
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Chickenlittle
Banned
I hadn't heard that before (half us production). The longer European demand I heard resulted In 5 month wait. So I would interpret that as
1. Increased production rate so us only 3 month wait and very large European demand
DaveT, How does this change your views on expected deliveries, revenues, eps and thus the stock price? how do you plan on playing the Q3 ER?
If Tesla was really at 500-550/week around Aug 20, I can still see them deliver over 600 cars for Q3 (ie., 12 weeks x 550 avg = 6600 cars produced - 300 cars in transit - 200 cars for loaners/stores = 6100 cars). But this scenario would have required them to have no european cars on the boat at the end of Q3, as the 300 cars in transit would be just U.S.
Also, if they were at 500-550/week around Aug 20, then I would imagine it would be difficult for them to guide more than 35k for 2014. (ie., if they started 2014 at 700 cars and ended 2014 with 900 cars and we count about 48 weeks of production, that would be about 38,400 cars produced. Tesla wouldn't want to over-promise with guidance so they would likely guide for 35k or perhaps even less, depending on how confident they are with their production forecasts for the end of 2014. For example, if they're confident they can ramp to 1000 cars/week by the end of 2014, then they might give higher than 35k guidance but otherwise I think 35k might be the most we can expect if they are forecasting to end 2014 at 900 cars/week.
We know that demand is likely going to be higher than 35k or even 40k for 2014, especially since they will be starting to deliver to Asia. So, if they can't ramp up higher than 1000/week before the end of 2014, then demand will be far greater than supply. But this goes against Elon saying that they want to test the depths of demand in 2014 (I thought I remember him saying in Q2 or Q3 timeframe).
I'm open to Tesla producing more than an average of 550/week in Q3 but haven't seen anything definitive in terms of data points. The 700/week from various store employees is an interesting number but it contradicts Elon's Aug 20th interview. VIN analysis is interesting but it's more of a generalized indicator, but I'd love to see more info with this. I might take some time this week and look at VINs myself and see what I can make out of the data we have.
bonnie
I play a nice person on twitter.
I'm confused as to why people think that store employees know what is happening on the factory floor. We have countless data points that have demonstrated that the majority of store employees are not well connected to what is happening at the corporate level. I'd go with what Elon publicly stated. Period. As far as the VIN analysis goes, agree that it is interesting data, but to me it's more of an indicator, not a data point (meaning taken with other VIN data from other quarters, will be meaningful as part of a trend). I guess we'll know what is the right answer in a few weeks.
I'm not finding this interview or what he stated in terms of production, do you have a link?
bonnie
I play a nice person on twitter.
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