Tesla’s Production outlook for Q2 ??

[DanL3]

Tesla’s Production out look for Q2 is not Bad, but not Glowing either.


First where we are today.

We know they did 200/day in the third week of March. That is 1400 for that week. Then Elon says 2000 for this last week.


They were behind on some deliveries because they overloaded the delivery process in the last week of March. They are behind on adjusting cars into the correct My Tesla Accounts. I expect there are other simple things that they have let slip in the urgency to push out as many cars as they did.


There are some quality issues that they have bandaided. An example is changing out charging ports that had water leaks. I expect they are now low on supply of this part and others.


Having said all of this they did a great job pushing past the 2018Q1 production hell. They have learned a lot about pushing the speed of production and about pushing the volume of cars through the delivery process. But Production Hell does not stop. it only changes as the volumes go up.


Also note that we have not seen a large batch of invitations in a while, and that the new VIN registration levels are still at 2000/week rather than a higher level.


My expectation is that Tesla will stay at production volumes between 1400 and 2000 a week for all of April and most of May. They need that time to implement fixes to the processes that they found in the end of Q1 push.


In addition Tesla is trying to exit 2018Q2 at a total US cars delivered around 199,9xx. That may mean less focus on production line volumes for all of Q2 and instead a focus on fixing all the root causes of all the problems so that they can do high volumes in Q3 and Q4 when the $7500 tax credit is in play.

 

[Moderatefan]

Tesla’s Production out look for Q2 is not Bad, but not Glowing either.


First where we are today.

We know they did 200/day in the third week of March. That is 1400 for that week. Then Elon says 2000 for this last week.


They were behind on some deliveries because they overloaded the delivery process in the last week of March. They are behind on adjusting cars into the correct My Tesla Accounts. I expect there are other simple things that they have let slip in the urgency to push out as many cars as they did.


There are some quality issues that they have bandaided. An example is changing out charging ports that had water leaks. I expect they are now low on supply of this part and others.


Having said all of this they did a great job pushing past the 2018Q1 production hell. They have learned a lot about pushing the speed of production and about pushing the volume of cars through the delivery process. But Production Hell does not stop. it only changes as the volumes go up.


Also note that we have not seen a large batch of invitations in a while, and that the new VIN registration levels are still at 2000/week rather than a higher level.


My expectation is that Tesla will stay at production volumes between 1400 and 2000 a week for all of April and most of May. They need that time to implement fixes to the processes that they found in the end of Q1 push.


In addition Tesla is trying to exit 2018Q2 at a total US cars delivered around 199,9xx. That may mean less focus on production line volumes for all of Q2 and instead a focus on fixing all the root causes of all the problems so that they can do high volumes in Q3 and Q4 when the $7500 tax credit is in play.

I still doubt they'll be able to miss 200K total in Q2. I think they'd have to send all their M3s to Canada for that. Do we know their current running total sales in U.S.?

 

[DanL3]

Do we know their current running total sales in U.S.?

I thought I saw around 160,000 at the first of the year. Someone else probably has a better estimate than I have.

So if it was 160,000 and they did 10,000 S-X and another 8000 3s in Q1, then they would be at 178,000 now.

If they build 2000 a week model 3s average in Q2 That is 24,000. So they need to ship a lot to Canada, but not all of them. Opening up the AWD would help Canada order convertion rates. Also they need to ship more of the S-X internationally.

I had heard of some Fleet/Lease deals that would not count for US customer shipments. Also they could put a model 3 in all show rooms and have one or two at each for test drives and loaners. They could open intenational shipments to other LHD countries. They could build the cars and assign VINs to customers but not deliver them until July.

These are all guesses and some are crazy, but Elon has done crazy things before just to game the system.

 

[drawfour]

They could build the cars and assign VINs to customers but not deliver them until July.

I really really really hope he does that. Though that might piss off some customers... But I'm waiting on the AWD, and I'd really like to get the $7500 tax rebate if possible. Worst case, I should be looking at $3750, which isn't bad.

Although, I guess until I have that invite to configure in my hand, I can say "I'm AWD or bust!!!" but once I get it, I might decide that $7500 in the hand is worth $3750 + AWD in the bush. I'm a bit torn. I have an AWD SUV right now that I'll be replacing, and so I want AWD for those rare times when I need it (my wife has FWD Prius, and it does not do well in the snow with the hills we have). But I also want a 3 NOW.

 

[ChrisH]

I think they will produce 28,000 and deliver 26,500 (completely random guesses). I think they will produce 78,000 model 3s in the second half of the year. It will be a big miss based on their goal, but a huge win in terms of over doubling overall production compared to 2017. I need them to make them faster because I’m like 446,000th in line :/

 

[Moderatefan]

Yeah, probably around half (or more if they increase production rate) of Q2 M3 output they can't sell in U.S. not to cross 200K.
With leases it might be hard to count those, since you don't know how many will choose this option when you send out invites.

 

[RangerRick]

Though that might piss off some customers...

Offer a $1000 discount if you're willing to wait a month or more for delivery. Free paint in exchange for helping with the tax breaks...

 

[Mrr82]

Tesla’s Production out look for Q2 is not Bad, but not Glowing either.


First where we are today.

We know they did 200/day in the third week of March. That is 1400 for that week. Then Elon says 2000 for this last week.

My expectation is that Tesla will stay at production volumes between 1400 and 2000 a week for all of April and most of May. They need that time to implement fixes to the processes that they found in the end of Q1 push.
.

Few things, we know they were doing MORE than 200/day for the 3rd week of March. So before their final push they were higher than 1400/week, we just don't know how much higher. That could be 210 or 250.

Elon said they will do at least 2000 this coming week as well, although obviously just because he said it doesnt' mean it's true, but that's a good sign and not something he said at the end of Q4 about maintaining the rate.

 

[Marsnaut]

Few things, we know they were doing MORE than 200/day for the 3rd week of March. So before their final push they were higher than 1400/week, we just don't know how much higher. That could be 210 or 250.

Elon said they will do at least 2000 this coming week as well, although obviously just because he said it doesnt' mean it's true, but that's a good sign and not something he said at the end of Q4 about maintaining the rate.

It's confusing because he says 2000 this coming week. Two weeks of sustained production is meant to prove that its not just a burst rate. But if you can do 2000 straight for 2x weeks, why can't that rate be sustained beyond?

Could it be that the 3 days downtime in March allowed them to stockpile enough batteries for two weeks burst?

 

[DanL3]

My guess is that Batteries are not the limit today. They have focused on Batteries. It is not the things that you focus on that bite you. It will be something else that limits production.

So they delivered a little over 8000 in Q1 and have 4000 in transit. (includes S and X, I think) They plan to build 2000 3s plus 2000 S&X this week. That is a lot of cars in there inventory if they follow through on the plan.

To make me believe that they are continuing 2000 + 2000 each I need to see what they are doing with all those cars. First we need to see VINs continuing to be registered at 2000 per week. Then we need to see configure invites at a higher rate than they have ever done before.

With what I see today, I expect 2 weeks to a month of little movement and then we will start to see VINs and configures or some other plan to ship the cars somewhere.

 

[AviP]

I need them to make them faster because I’m like 446,000th in line :/

If you really think that's your rank in the line, then you are most likely looking at 2020. The math says so.

 

[Moderatefan]

I need to see what they are doing with all those cars.

They are going to send them to Canada. They only have around 10K M3s to deliver in U.S. in Q2 before hitting 200K U.S. sales. If their S/X sales go up in Q2, then even less than 10K M3s(I think it would make sense to minimize Apr/May M3 deliveries in U.S. to get a better feel for S/X sales, then fill up the difference to 200K with M3s in June).
Considering they still target 5K/week for the end of Q2, it may mean around 2/3 of Q2 M3 output needs to go to Canada.

 

[Chris350]

Man, I just wish they would release the cars.... This waiting until Sept is killing me.... If it even ends up being Sept....

 

[stef]

I think Elon getting out his sleeping bag is a strong hint that they’ll work hard on production process soon. My guess is that after validating the line at 2000 again they will take it down for few days and get all set up for Dual Motors, with the aim of being around 4000/week sustainable in June with AWD already in the mix. I would be expecting the first dual motors invitation (small batch) in the next couple of weeks

 

[Mrr82]

My guess is that Batteries are not the limit today. They have focused on Batteries. It is not the things that you focus on that bite you. It will be something else that limits production.

So they delivered a little over 8000 in Q1 and have 4000 in transit. (includes S and X, I think) They plan to build 2000 3s plus 2000 S&X this week. That is a lot of cars in there inventory if they follow through on the plan.

To make me believe that they are continuing 2000 + 2000 each I need to see what they are doing with all those cars. First we need to see VINs continuing to be registered at 2000 per week. Then we need to see configure invites at a higher rate than they have ever done before.

With what I see today, I expect 2 weeks to a month of little movement and then we will start to see VINs and configures or some other plan to ship the cars somewhere.

I think they had 4K of just S/X enroute and 2k of M3.

 

[Howdus]

You are right. I have been reading quotes from the Tesla "statement" and finally found the actual document. Here is the letter Tesla sent to the SEC. I' like to know their inventory at quarter end as well.

 

[ChrisH]

If you really think that's your rank in the line, then you are most likely looking at 2020. The math says so.

Ugh. I may be in denial about this possibility. I am not a current owner and did not reserve until February 2018. Unless there are a lot of people who reserved but decide not to purchase the car, I’m probably in for a long wait. I’m not sure they can produce more than 120,000 model 3s this year so that will still leave me waiting for about 300,000 more to be built. I can see them producing at least 200,000 model 3s in 2019 if all goes okay so MAYBE I could get my car in late 2019 if there is a decent cancellation or deferral rate along the way.

 

[Moderatefan]

Ugh. I may be in denial about this possibility. I am not a current owner and did not reserve until February 2018. Unless there are a lot of people who reserved but decide not to purchase the car, I’m probably in for a long wait. I’m not sure they can produce more than 120,000 model 3s this year so that will still leave me waiting for about 300,000 more to be built. I can see them producing at least 200,000 model 3s in 2019 if all goes okay so MAYBE I could get my car in late 2019 if there is a decent cancellation or deferral rate along the way.

In mid 2017, Musk actually promised 10K/week in 2018 Tesla Model 3: Elon Musk has ‘zero doubt’ about 10,000 units per week in 2018, corrects reservation tally

If that happens (assuming 5k/week by ~Q2 end, 10k could happen a year later in 2019, why not) your wait can be shortened. Plus, you might get a bit of priority due to being in U.S vs overseas orders.

 

[sreams]

I think they will produce 28,000 and deliver 26,500 (completely random guesses). I think they will produce 78,000 model 3s in the second half of the year. It will be a big miss based on their goal, but a huge win in terms of over doubling overall production compared to 2017. I need them to make them faster because I’m like 446,000th in line :/

If you live in the US like your profile says, no way you are that far back in line. Probably half of the reservations come from outside the US. And then only a certain percentage actually configure. So your car might be more like the 150,000th car. Not the 446,000th.

 

[dhanson865]

I still doubt they'll be able to miss 200K total in Q2. I think they'd have to send all their M3s to Canada for that. Do we know their current running total sales in U.S.?

US running total Tesla Sales vs 200,000 for federal credit phase out trigger

2011 end 1,900
2012 end 4,550 (2,650 for 2012 + prior year)
2013 end 22,200 (17,650 for 2013 + prior years)
2014 end 38,889 (16,689 for 2014 + prior years)
2015 end 64,305 (25,416 for 2015 + prior years, Model S and Model X)
2016 end 111,424 (47,119 for 2016 + prior years, Model S and Model X)
2017 end 161,571 (50,147 for 2017 + prior years, Model S, Model 3, and Model X)
2018 partial 179,551 (17,980 for partial 2018 + prior years, Model S, Model 3, and Model X)

Q1 2018 was 17,980 US deliveries, leaving ~20,445 US deliveries in Q2 to not trigger the phaseout (send any excess to Canada until July 1 2018)