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⚡️ELECTROMAN⚡️
Village Idiot
sundaymorning
Active Member
If shorts are still stubborn enough to make feeble argument that late in M3 ramp, then I will be happy to take their donated cash straight to my bank during Q4. The longer they wait, the more my account will grow.
sundaymorning
Active Member
It might or might not be slow. The Dow, Naz and SP has made huge gains the last couple days. If we get some tailwind then we’re primed for a pop. To make things worse for shorts, this rally will be followed by earnings that will likely reiterate the 5-6k target. Which could push us even further up. The longer the shorts hold out, the more money they stand to lose. So far shorts have been very united and vocal, now they’ll be turning on each other, racing for the exit within 3-6 months.
I, like you, have all the time in the world to wait and watch this happen.
> Yes but I'm talking about them saying 6k/week on the first Model 3 line.
>> 600k/yr ~= 600k/wk-line * 2 lines
>>> Math is fun. (But I have no idea what you're trying to say).
Sorry, typo. It's 600k/year = 6k/week-line * 50 week/year * 2 lines.
Given that Tesla will have two M3 production lines, Elon in 1q18 conference call implied 6k/week for each M3 production line when he said possible 600k M3 per year.
>> 600k/yr ~= 600k/wk-line * 2 lines
>>> Math is fun. (But I have no idea what you're trying to say).
Sorry, typo. It's 600k/year = 6k/week-line * 50 week/year * 2 lines.
Given that Tesla will have two M3 production lines, Elon in 1q18 conference call implied 6k/week for each M3 production line when he said possible 600k M3 per year.
Zhelko Dimic
Careful bull
Musk calls for every supplier and internal department to achieve daily burst production of 850 parts by the end of June. So if everything goes according to the plan, every individual department will have one day they did this (even if that means exceptional, hard to repeat effort). This burst rate won't be achieved by everyone on the same day, mind you. This goal is not even remotely close to steady 5000 production.
From that, I now feel 5000 is more elusive than I thought. However, 3000-4000 should come by June (or by the end of June accounting for Elon time
and I would be very happy with 4000 steady-state weekly rate exiting Q2, if that were possible.The rest of verbiage makes me think that rest of 2018 will be dedicated to evolving and stabilizing existing line, and I interpret it to mean that additional line for up to 10000/week is dead; at least for 2018...
More cars to pile up into parking lots to hide the cars they can't sell. Just burning through cash paying parking fees. And if they sell them they'll lose money on everyone.
bdy0627
Active Member
Thanks. This is what I was hoping to see. Not a big deal, worst case scenario, and well worth doing at this point to finally get to 5,000.
Musk calls for every supplier and internal department to achieve daily burst production of 850 parts by the end of June. So if everything goes according to the plan, every individual department will have one day they did this (even if that means exceptional, hard to repeat effort). This burst rate won't be achieved by everyone on the same day, mind you. This goal is not even remotely close to steady 5000 production.
From that, I now feel 5000 is more elusive than I thought. However, 3000-4000 should come by June (or by the end of June accounting for Elon time
The rest of verbiage makes me think that rest of 2018 will be dedicated to evolving and stabilizing existing line, and I interpret it to mean that additional line for up to 10000/week is dead; at least for 2018...
Zhelko, not sure if you had a chance to read the letter closely. I read it a couple of times, and the way I understand it, the 850/day burst is a target to see that everyone is on track to hit 6,000/week within a few months by seeing that they can burst to 850/day by the end of June. Along with that, is the idea that if all necessary production can burst to 6,000/week at the end of June, production is on track to be at 5,000/week at that point in time.
Waiting4M3
Active Member
Some people will argue that ASP should be $42-45k instead of $50, I don't want to be too optimistic, $12.5b/yr annual revenue rate seems reasonable enough for 2018, before we get into the 5k -> 10k ramp.
bdy0627
Active Member
With today's bounce off of $282 and Elon's email, Sniper has turned VERY bullish. In my experience, he's not always right regarding exact price points, but he is often right in terms of direction. I fairly cautiously added some more shares and a few June calls this morning around $284. Tomorrow, perhaps it's time to add more leverage...
Was he saying some of the current suppliers for the model 3 are today at drunken sloth level performance? That’s not very confidence inspiring to me, if true.
Zhelko Dimic
Careful bull
I read letter very carefully and I stand by my interpretation. I also know that you get what you measure. And you don't get what you don't ask for. So if you are asking for a demonstration of 850 parts a day, for a day, well, that's not 5000 steady. There could be other requirements that are not spelled out in the letter, like 5000/week steady, but overall tone of the letter makes me think this will not be the case (btw, I still like the letter, it shows significant progress). However, situation is worse then Elon thought and expected, and there is a mess in the factory. Contractors, sub-contractors and sub-sub-contractors... Drunken-sloth competency levels of some contractors, and they still have contracts... I'm thinking Tesla is still building many production competencies, and contractors were brought in to help, but there isn't strong overall process of review and enforcing contracts, commitments etc. Management of everything dynamic is ad-hoc. Tesla was in a "throw money at the problem" mode, and it wasn't executed well. So some of the critique of Tesla execution by shorts is rightful. I've felt poor execution even as a customer buying my Model S, which is the first time (and a reason for) I dropped my leverage substantially.
But this, "money no object" policy stops now. Which is also why I think no second M3 line for 2018. Perhaps Elon is re-thinking quality, but not only car quality, but also in the processes, employees, hiring and spending.
This all (mess) makes me think that most department will be between 3-4K by the end of the June and will barely pass 850/day test (5950/week). I just hope it's 4K steady, rather than low 3K.
And here is my primer in reading Elon speak, and I have some experience because of both 1 tenure in doing it
and 2. I speak Engineering language myself, and I've known to say stuff like he does a decade or so back, and be confused why people didn't get it Elon: "Another set of upgrades starting in late May should be enough to unlock production capacity of 6000 Model 3 vehicles per week by the end of June."
Unlock is not the same as achieve. Unlock just means that there is a possible path to 6000 (probably critical component build, like battery or something akin to it), but path still needs to be discovered/traversed/executed on, and problems on individual station level and overall synchronization are still to be discovered and solved. (Parody: Since I, Elon am an optimist, I'll assume we breeze through these in two weeks. Wait, could it be longer?! Naaaah...)
Elon:"Please note that all areas of Tesla and our suppliers will be required to demonstrate a Model 3 capacity of ~6000/week by building 850 sets of car parts in 24 hours no later than June 30th."
This is how Tesla Production Manager reads this
ppl will always game the system)You will need to be "certified" by achieving this goal(850/day), in isolation, independent of other departments and overall process synchronization. Demonstration will be ideally the full day run, but if you are particularly crafty manager, maybe you can run burst for 2hours, heck even 1 hr, and extrapolate to 24hrs? It will depend on the quality of your manager and your relationship to accept this or not. Of course, it will take months afterwards to achieve this same goal as a steady state. Outside of this goal, you will be required to run steady production at the speed higher than slowest other department, yet to be determined and communicated. Probably going to be close to or 4K/week, but you are not going to catch a lot of flak whatever it is, as long as you are not the slowest department. Now, If you are the slowest department, do we need to talk...
So, yeah, I'll be happy with low 4K steady achieved by the end of June after reading this letter... But, more importantly, I feel good that I know they're on their way there (5-6K/week) ...
No, he is referring to contractors, like the type doing work in the factories (possibly see also the asbestos remediation lawsuit).
I read letter very carefully and I stand by my interpretation. I also know that you get what you measure. And you don't get what you don't ask for. So if you are asking for a demonstration of 850 parts a day, for a day, well, that's not 5000 steady. There could be other requirements that are not spelled out in the letter, like 5000/week steady, but overall tone of the letter makes me think this will not be the case (btw, I still like the letter, it shows significant progress). However, situation is worse then Elon thought and expected, and there is a mess in the factory. Contractors, sub-contractors and sub-sub-contractors... Drunken-sloth competency levels of some contractors, and they still have contracts... I'm thinking Tesla is still building many production competencies, and contractors were brought in to help, but there isn't strong overall process of review and enforcing contracts, commitments etc. Management of everything dynamic is ad-hoc. Tesla was in a "throw money at the problem" mode, and it wasn't executed well. So some of the critique of Tesla execution by shorts is rightful. I've felt poor execution even as a customer buying my Model S, which is the first time (and a reason for) I dropped my leverage substantially.
But this, "money no object" policy stops now. Which is also why I think no second M3 line for 2018. Perhaps Elon is re-thinking quality, but not only car quality, but also in the processes, employees, hiring and spending.
This all (mess) makes me think that most department will be between 3-4K by the end of the June and will barely pass 850/day test (5950/week). I just hope it's 4K steady, rather than low 3K.
And here is my primer in reading Elon speak, and I have some experience because of both 1 tenure in doing it
Elon: "Another set of upgrades starting in late May should be enough to unlock production capacity of 6000 Model 3 vehicles per week by the end of June."
Unlock is not the same as achieve. Unlock just means that there is a possible path to 6000 (probably critical component build, like battery or something akin to it), but path still needs to be discovered/traversed/executed on, and problems on individual station level and overall synchronization are still to be discovered and solved. (Parody: Since I, Elon am an optimist, I'll assume we breeze through these in two weeks. Wait, could it be longer?! Naaaah...)
Elon:"Please note that all areas of Tesla and our suppliers will be required to demonstrate a Model 3 capacity of ~6000/week by building 850 sets of car parts in 24 hours no later than June 30th."
This is how Tesla Production Manager reads this
You will need to be "certified" by achieving this goal(850/day), in isolation, independent of other departments and overall process synchronization. Demonstration will be ideally the full day run, but if you are particularly crafty manager, maybe you can run burst for 2hours, heck even 1 hr, and extrapolate to 24hrs? It will depend on the quality of your manager and your relationship to accept this or not. Of course, it will take months afterwards to achieve this same goal as a steady state. Outside of this goal, you will be required to run steady production at the speed higher than slowest other department, yet to be determined and communicated. Probably going to be close to or 4K/week, but you are not going to catch a lot of flak whatever it is, as long as you are not the slowest department. Now, If you are the slowest department, do we need to talk...
So, yeah, I'll be happy with low 4K steady achieved by the end of June after reading this letter... But, more importantly, I feel good that I know they're on their way there (5-6K/week) ...
not explicit, and, I get that some may view this differently, but, this is the part of this new letter that I take as a reiteration of 5K goal,
The reason that the burst-build target rate is 6000 and not 5000 per week in June is that we cannot have a number [I read this "number" as reiteration of the 5K] with no margin for error across thousands of internally and externally produced parts and processes, amplified by a complex global logistics chain. Actual production will move as fast as the least lucky and least well-executed part of the entire Tesla production/supply chain system.
the last sentence is a hedge, but, they've said that same hedge quite frequently through the ramp.
Interesting, I’m not currently seeing what he/she is seeing. I was expecting to visit 268-272 soon.
Once again, I’m reiterating my warning about the market possibly flipping out a bit when they see almost negative 1 billion in Q1 earnings, even though many already see it coming.
I’ve been surprisingly accurate lately, but won’t be upset if I’m wrong now
bdy0627
Active Member
I agree with you. I thought the shorts were going to be successful at pulling TSLA down a bit further to retest some lower levels before a huge bounce. Not sure how low, but it looked to me like the $250s were possibly in play again here, depending upon macros. Now, the shorts may have met their match. Macros for a change look very solid, and Elon has decided to be more influential in determining the stock movement. Shorts will undoubtedly try to minimize the bounce, but I think this may be enough to put longs back in the driver's seat for determining the stock movement. We will know soon enough. It should be clear within a few days which way this is going to go. If up, I think we will shoot past $310 this time.Interesting, I’m not currently seeing what he/she is seeing. I was expecting to visit 268-272 soon.
Once again, I’m reiterating my warning about the market possibly flipping out a bit when they see almost negative 1 billion in Q1 earnings, even though many already see it coming.
I’ve been surprisingly accurate lately, but won’t be upset if I’m wrong now
dc_h
Active Member
Sometime in July or August they will repeat the test and require all vendors to hit 1000 per day peak and eventually 1500 per day. Stress test is a good way to find your gaps and saturation points that need more capacity. I’m more confident about approaching 10,000 weekly now, maybe even in 2018.
Super simple. If Tesla can get to 5k week then they will be cash flow positive and everyone (including shorts) knows it.
If Tesla gets to cash flow positive at this scale then the rocket has hit escape velocity.
If Tesla gets to cash flow positive at this scale then the rocket has hit escape velocity.
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