Even though it must be extremely expensive, I think Musk is right to spare no expense on M3 (and to spend no expense on anything else) right now. He has bet the farm on Q3 & Q4 and needs to make them work.
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Sorry, I should have been more precise. Does this increase the likelihood that lawsuits from similarly situated plaintiffs will succeed to a degree that will impose a material cost on Tesla?
Interesting that they are rush shipping more pack equipment if they are already at 5k/wk from GF1. Indicates packs may be limiting factor soon... (labor on the semi-automatic pack lines would need to be crazy to offset air shipping costs).
It also helps them bunch up some expenses in Q2 (which I think everyone has already accepted will be a disaster) rather than Q3.
Esme Es Mejor
Member
No. It closes the door on similarly situated plaintiffs (a class) bringing a lawsuit (an action). It does this for an undisclosed but undoubtedly cheap price, allowing Tesla to focus resources elsewhere.
Waiting4M3
Active Member
Charter a cargo plane as big as a 747 can cost $25k/hr, so it could cost ~$500k for each plane, so Tesla could have paid $3m for this shipment of 6 planes. However, shipping via ocean freight vs air can be a difference of a month.
How much labor cost can be saved in 1 month?
Just a WAG if Tesla have 500 people at GGF building these modules, at 100k/yr salary+overhead, that's $50m/yr, or $4m per month. Installing the Grohmann line 1 month earlier, once the battery line is producing at full speed, can potentially save Tesla money, and free up precious manpower to ramp stuff where needed.
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Not sure how extremely expensive air lift of a limited number of machines will be, especially as compared to the value added to production. Didn't Tesla air lift a bunch of batteries to Puerto Rico last year, mostly for goodwill, or at least deferred payment? It's my guess this was also a shrewd business decision.
Edit: Thinking / typing too slow. Need some upgrade ...
I was thinking more labor than transportation (which I would expect would be capitalized).
sundaymorning
Active Member
Shorts are betting their own farms that Musk can’t get to 5k. The GF is already at 5k without new equipment. Fremont is where all the attention is given right now. Shorts are going to lose their farms on this bet.
Ah, interesting whether transport is part of lumped cost. Also interesting since Tesla made the machine... Out of my accounting depth.
You may be thinking of the Australia battery. (700k I think?)
OK, I see that anyone who bought Autopilot 2.0 between 10/16 and 9/17 can get some compensation. Cost seems to be about $5 million for US and Tesla says they'll compensate all owners on similar basis - so, say, $10 million globally - not really material in comparison to a $700 million pre-ZEV GAAP loss this quarter.
bdy0627
Active Member
If that's the Grohmann line, better late than never. We were told to expect that in March, so maybe this isn't that? Sure seems like it though. If so, apparently Elon was being highly optimistic about the timeframe when he said it would arrive in March.
Musk optimistic about a timeframe? Say it ain't so!
bdy0627
Active Member
He also can't push out near-term production guidance again. He has done that too many times at this point, and he knows it.
bdy0627
Active Member
Hmmm, very true. The other issue is that Elon cannot afford to push out quarterly guidance yet again (financially and in terms of credibility.) He needs to do everything possible to ensure production is at 5,000/week by the last week in June. This move suggests maybe they aren't confident they will get there without it.
Some shorts may be, but I think a lot of us believe that even at 5k per week Tesla can't make a sustainable material profit. We are eager for Tesla to attain the 5k per week so that, if we are right, the market can reflect this inability before our puts expire.
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