I understand the 500,000/year to be the production rate hit at the end of 2018, not that they will actually produce 500,000 in 2018. I think that will happen in 2019.
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MartinAustin
Active Member
Great report and conference call.
(Echoing what Julian said) I'm not sure TSLA will rocket up based solely on this infoburst though. Certainly not like the climb during anticipation for Model 3 reveal. Some of it is just too hard for analysts to believe, no matter how confident Elon and JB sounded about production capacity.
AJ's questions were a lot better formatted and useful.
The most interesting quotes from Elon, for me -
[Model 3 current reservation total] "...which I think is actually a fraction of the ultimate demand, when people fully understand what the car's capable of, and are able to do a test-drive."
And also of course "hell-bent on becoming The Best Manufacturer On Earth." Nothing like aiming high.
(Echoing what Julian said) I'm not sure TSLA will rocket up based solely on this infoburst though. Certainly not like the climb during anticipation for Model 3 reveal. Some of it is just too hard for analysts to believe, no matter how confident Elon and JB sounded about production capacity.
AJ's questions were a lot better formatted and useful.
The most interesting quotes from Elon, for me -
[Model 3 current reservation total] "...which I think is actually a fraction of the ultimate demand, when people fully understand what the car's capable of, and are able to do a test-drive."
And also of course "hell-bent on becoming The Best Manufacturer On Earth." Nothing like aiming high.
If Tesla can break above $232 there is no real resistance until $250. I think this is why it is staying below $232 after hours. Once analysts chime in, we should see some movement. Any analyst who doesn't upgrade their price target is being dishonest, or making things up.
200dma = 225.98
50dma = 229.42
Lower BB = 231.89
200dma = 225.98
50dma = 229.42
Lower BB = 231.89
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Yes. Tesla has to protect Panasonic. GM made the mistake of bragging about their pack cost to the dismay of LG Chem.
Maybe my Panasonic shares will come alive. They have been taking quite a beating.
The reason they didn't make it for cash flow positive was not only the miss of 1000+ deliveries, but also the very low gross margins on Model X. If they delivered 17k total in Q2, with 12k S and 5k X. Assuming ASP for either won't drop a huge amount (more than 3%), holding Model S gross margin at 27%, the Model X gross margin needs only to be 11% for them to swing from operating loss to profit. This is assuming other sources of revenue and cost being the same, which definitely won't. But the up-side change in revenue (Tesla Energy mainly) would be more than the change in costs (RND, SG&A) if they are maintaining the level of discipline as shown in this quarter. So they have some leeway here.
ZachShahan
Active Member
I'd say "appears" is far too soft of a word. Elon & JB emphasized pretty strongly that it is definitely designed for simplicity & ease of manufacturing.
JRP3
Hyperactive Member
They just told us that Fremont and GF are capable of 1million vehicles per year, which is twice what they originally planned for GF + Panasonic Japan production. That means they won't even need half of the GF until after 2018.
ZachShahan
Active Member
That's one that I somehow didn't hear. And a superb one. Esp for those of us a little bit concerned about ongoing reliability issues. Thanks for making the list, and including this.
If I remember correctly, Goldman Sachs said Tesla is worth ~$2000 per share if Tesla can sell 1.5million vehicles in 2020.
ZachShahan
Active Member
ZachShahan
Active Member
No, think he just said it would increase faster (in terms of %), which isn't hard to do when the $ is starting much lower.
ZachShahan
Active Member
Man, is there no longer an option to give rep? This comment really deserves some.
mejojo
Active Member
FredTMC
Model S VIN #4925
Great, then GS analyst better raise his PT starting tomorrow. He's always been a real "stick in the mud"...
We are pretty close on your points. Assume 70,000 Model S and 60,000 Model X when total production hits 500,000. Assume cells for S, X and storage come from Panasonic Japan. Assume 370,000 Model 3s at average battery pack of 60 kwh. Total Gigafactory1 production needed would be 22.2 gwh. Gigafactory1 original cell capacity was 35 gwh. As being built now on the original footprint, the finished capacity has been increased to 49 gwh. So 22.2/49 gives 45 % of the enlarged final Gigafactory to supply 370,000 Model 3s. Perhaps three sevenths of Gigafactory1 would be enough (two additional units the size of the current structure). All of Gigafactory1 would be needed for a million cars (820,000 model 3s).
So with expedited production plans, is now the time to load up with stock on the local Nevada lithium companies?
My take based on below points;
If this is the approach, it appears the 500K units by end of 2018 is not as impossible as i initially thought, and 100% of the 200K/yr production from Freemont ends up for US customer within 2018 to maximize Fed credit. I think this is why Tesla mentioned they might be able to ship 100K to 200K M3 within 2017(all US, starting from WC moving east), as I think the new factories will come online by early 2018 to build for the ROW(rest of the world)
Of course, they will continue to scale up each factory to accommodate 1MM/yr by 2020...
- 500K cars(S,X,3) produced by end of 2018
- 1st volume delivery target 7/1/17
- Maximize Fed EV credit for as many customers as possible(US limitation only)
- <40% of overall demand is from US
- China 2nd largest reservation beyond US
- Will have new factory in europe, Asia, and SOMEWHERE ELSE (so 4 factories total)
If this is the approach, it appears the 500K units by end of 2018 is not as impossible as i initially thought, and 100% of the 200K/yr production from Freemont ends up for US customer within 2018 to maximize Fed credit. I think this is why Tesla mentioned they might be able to ship 100K to 200K M3 within 2017(all US, starting from WC moving east), as I think the new factories will come online by early 2018 to build for the ROW(rest of the world)
Of course, they will continue to scale up each factory to accommodate 1MM/yr by 2020...
sundaymorning
Active Member
In regards to whether Tesla can make 500,000, I think they can, abeit a 10% miss. This is purely based on past execution risk factors. Although the manufacturing process is difficult, so long as demand is there for their product, Tesla will figure out a way to make it happen. A capital raise will be necessary, shares will be diluted, but it will guarantee Tesla will leap past any 2nd place competitor by a factor of 3-5 years in economy of scale. Suppliers now understand whats at stake, ramp up for Tesla or get left out. My belief is that some suppliers themselves didn't understand Tesla's real potential, M3 just made it easier to comprehend the bigger picture.
MX is by far the hardest car to build, just take a look at it, or ask Bob Lutz. M3 has none of those fancy doors, 3rd row seats, etc. it's smaller than an S, simpler than an S, hence it'll likely be a simpler build. All that is needed are manufacturing expertise. Calling on all experts to join Tesla.....
MX is by far the hardest car to build, just take a look at it, or ask Bob Lutz. M3 has none of those fancy doors, 3rd row seats, etc. it's smaller than an S, simpler than an S, hence it'll likely be a simpler build. All that is needed are manufacturing expertise. Calling on all experts to join Tesla.....
ludicrousspeed
Member
The next few years are going to be very exciting. I wish somebody on the CC had asked how they plan to further expand supercharger and service center development to accommodate for the huge increase in guidance for the coming years. Does anybody disagree with the fact that they're going to have to massively expand their infrastructure to meet the needs of such a large customer base?
On another note, I think Tesla will do a great job raising money for all of this. If I'm not mistaken, since Elon has started raising money for his companies in the mid 90s, each round has held a higher valuation than the previous round.. for each company (incredible). I think they will be opportunistic and raise equity well above $242 per share to minimize dilution. Based on the CC it seems like they will raise additional equity asap, like as soon as this week, but I think they will be patient and wait until the SP is near an ATH. also said they will raise debt, which will probably have extremely favorable terms given that it's going towards a product with a $15B+ backlog.
On another note, I think Tesla will do a great job raising money for all of this. If I'm not mistaken, since Elon has started raising money for his companies in the mid 90s, each round has held a higher valuation than the previous round.. for each company (incredible). I think they will be opportunistic and raise equity well above $242 per share to minimize dilution. Based on the CC it seems like they will raise additional equity asap, like as soon as this week, but I think they will be patient and wait until the SP is near an ATH. also said they will raise debt, which will probably have extremely favorable terms given that it's going towards a product with a $15B+ backlog.
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