Benz
Active Member
Elon Musk has mentioned that the second line would be operational sometime during the end of Q3 2014. I could be wrong but I think I heard him say that during the Conference Call of ER Q4 2013 in February 2014.
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Elon Musk has mentioned that the second line would be operational sometime during the end of Q3 2014. I could be wrong but I think I heard him say that during the Conference Call of ER Q4 2013 in February 2014.
Things can change if circumstances warrant. In case you missed my previous post on the subject, the link is below: Short-Term TSLA Price Movements - 2014 - Page 382
Do we know whether this second line for RHD is also capable of 56.5K cars per year (or is it smaller)? If it is indeed a full scale line, could it mean that Tesla will have three lines (One for Model S LHD, One for Model X LHD, and one for Model S/X RHD)? This would result in a production capacity of 169,500 cars per year between the two models.
Chickenlittle
Banned
of course we are all speculating. hire of over 2000 employees at once doesnt speak for a gradual ramp up but rather a big event like opening another line in my opinion.
Let's not jump the gun and assume this is a massive step increase in Model S production. Thinking about timeline, it's more likely they are hiring and training these people so they have the skilled manpower ready for Model X production.
Just to clarify we are discussing different timelines. You are saying that hiring 2000 employees means big ramp-up, likely in 3rd quarter, and I agree with that.
What I am adding is that they most likely already operate second line for perhaps 100-150 RHD cars/week in order to gain efficiency. In order to launch second line with this type of production TM do not need additional 2000 people
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No jumping the gun here. TM are planning ramp up for about 1200 cars/week production of MS in Q3. In order to achieve this you need to hire people for third shift, as one line can produce approximately 400 cars/week
Last I recall their expectation was to hit 1000/week by end of this year.. where was the 1200/week number from? It's not as simple as 400/week per shift. Elon even highlighted that there are many sub-shops in the factory that run on very different production patterns, each of which have different capacity constraints with respect to employees and equipment.
I know DaveT, you are only going by official guidance.:smile: This is not -I am getting this number by connecting the dots. As I posted above this is their plan, not official guidance.
- During the first visit to Munic Elon indicated that TM will be able to get battery cell supplies for about 1200 cars/week in 2014.
- During the second TV show in China, as reported by Maoing: "Elon: this year we'll almost double the production rate." TM were at about 600 cars/week at the end of Q4 2013, so double of this is 1200. Long-Term Fundamentals of Tesla Motors (TSLA) - Page 134
- Have to search for the link, but one of the analysts after the meeting with TM management indicated that Panasonic will FULLY ramp up their production of cells included in 1.8B agreement by Q3. As I posted several times before, it works out to a rate of minimum of 450M cells/year or enough for about 67,300 Model S and X, or about 1400 cars/week assuming 80% / 20% for 85kWh /60kWh cars. The significance of FULLY is that full running rate of the Panasonic production will be completed by Q3. Some of those batteries will be probably used for Merc. Class B Electric drivetrains, but the point is that tere will be plenty of batteries to accomodate MS production rate of 1200 cars/week, and it is unreasonable to assume that TM will be accumulating these batteries, without putting them toward production of the MS powertrains
- The max production rate of one line is 56,500 cars/year, or 1177 cars per week based on 48 weeks/year production schedule. Since TM are planning two lines and they indicated many times that the demand for MX will be approx. equal to demand for MS, they are planning for 56,500 cars/year production for each.
Putting all of the above together leads me to my conclusion on the internal planning for 56,500 MS/year, with the production rate fully ramped up to about 1200 cars/week in Q3, coincident with the full ramp-up of the battery cells by Panasonic (with delay to allow for shipment).
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I think you're being overly optimistic in a few ways:
1. Elon guided that they would reach 1000 cars/week production run rate by the end of the year. This could likely mean in the last few weeks of December. But I'd like to think that Tesla is looking to beat this guidance and will achieve 1000 cars/week sometime in mid-Q4 and they'll hopefully end 2014 with 1100 cars/week run rate. I think it's possible with the 2nd production line ramp that they might be able to reach 1000 cars/week run rate by end of Q3 but I'm not counting on it. 1200 cars/week in Q3 seems overly optimistic.
2. The China cctv interview is probably one of the best data points we have, and I haven't watched it yet (planning to do so later today) but if Elon said "this year we'll almost double the production rate" then to me that means somewhere around 1100 cars/week (slightly beating the guidance given of 1000 cars/week). If he thought they were going to do 1200+ cars/week by the end of the year he probably would have left out the "almost". Again this just needs to happen by the end of the year. Also, he didn't say "in several months we'll almost double production rate compared to last year". Rather, "this year" to me forecasts by the end of the year. To infer that in Q3 they would reach that goal is stretching it.
3. Regarding the analyst note you mentioned, the analyst could have been referring to a fully ramp by END of Q3 and not the start of Q3. Often people aren't very clear with their words and might say "by Q3" to mean by the end of "Q3", so I wouldn't read into that too much for exact timing (ie., start vs end of quarter). But if Panasonic is fully ramped by end of Q3, that gives Tesla the battery supply they need to fully ramp in Q4. Here's a part of Barclay's note on 3/24/14 reporting on European investor meetings Tesla held:
"Tesla reiterated that its production ramp for Models S/X is weighted toward the back half of 2014 as it adds a second production line. The original line was sized for annual production of 40k units of Models S/X, but the new line allows for production of ~50k units/year. Similarly, Panasonic is ramping up its cell output to meet demand from Tesla - new capacity is coming on-line this spring, and once that is ramped then Tesla can launch the new production line. Recall that Tesla ended 2013 at a production rate of 600 units/week, and will ramp to a rate of 1,000 units/week by the end of 2014, with production in 50 weeks of the year."
And the 56,500 comes from?.... I hope the answer is not 1177 x 48 :tongue:
I would echo DaveT's caution of overoptimism as it sets up for disappointment. A lot of approximations and assumptions through the sources and calculations to put a finger on such exact figures.
Well, I think you are being overly cautious. :smile:
There were multiple quotes from TM mangement about doubling the production in 2014, including the latest from Elon himself saying it in the second Chineese TV interview (thanks Maoing!).
If I am geting all of your projections correct, they do not come close to doubling the production in 2014:
Q1 - 7400
Q2 - 9000 (750 x 12)
Q3 - 10200 (850 x 12)
Q4 - 11400 (950 x 12)
TOTAL: 38,000
I believe my conclusions about TM planning are correct.
I am with you on being cautious on trying to predict short term stock movements based on this, as it is not clear how confident TM are to release this information as part of Q1 ER (as future outlook), but I would not rule it out.
As far as their planning is concerned, I believe that they are planning to scale up to 1200 cars/week some time in Q3.
When Elon talks about "doubling production" in 2014, I believe he's referring their production run rate and not total production. Since the ramp up occurs in 2nd half of the year it's possible that the total 2014 production doesn't double (compared to 2013) but that production run rate (ie., weekly production number at end of the year) does almost double (ie., 1100 cars/week) what they ended at 2013 (600 cars/week).
It's also possible that they do indeed double 2013 total production (ie., 45,000 cars produced) but I wouldn't count on that since guidance for 2013 was only at 35,000. There's a reason why they guided 35,000 cars for 2013 yet in the same guidance guided for 1000 cars/week by end of year (which is a 50k annual run rate). It's likely because the ramp occurs mostly in the 2nd half of the year (as noted by the Barclays note referring to Tesla's investor meetings in Europe). If the ramp occurred more gradually throughout the year then Tesla could have comfortably guided up to 40,000 cars sold (ie., start year at 30k production rate and end year at 50k production rate, this equals 40k production and close to the number of cars delivered).
Regarding my rough projections:
Q1 - 7800 produced (650 cars/week x 12 weeks)
Q2 - 9000 produced (750 cars/week x 12 weeks)
Q3 - 11,700 produced (900 cars/week x 13 weeks)
Q4 - 12,000 produced (1000 cars/week x 12 weeks)
40,500 cars produced. Maybe 39,000 cars sold.
If we boost Q3 and Q4 numbers by 50 cars/week:
Q1 - 7800 produced (650 cars/week x 12 weeks)
Q2 - 9000 produced (750 cars/week x 12 weeks)
Q3 - 12,350 produced (950 cars/week x 13 weeks)
Q4 - 12,600 produced (1050 cars/week x 12 weeks)
41,750 cars produced. Maybe close to 40k cars sold.
To me the key is the factory production boards and what they are showing. This is the best data point we've got for current production run rate. And in early April, it was almost 700 cars/week.
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DaveT, according to Maoing post Elon indicated that both the production rate AND production will be almost doubled in 2014: Long-Term Fundamentals of Tesla Motors (TSLA) - Page 134
I am going to watch the interview tonight...
I am going to watch the interview tonight...
Yeah, I'm going to watch the interview tonight as well. One note though, sometimes Elon says "production" to mean production run rate. The weekly production rate is one of the main metrics Tesla is focused on, along with the weekly order rate (which they don't disclose). The weekly production rate as a metric is far more important to Tesla than the total # cars produced in a year.
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