I've stolen DiscoDucky's summary to post here since the site is restricted:
Summary first and then some rough notes from the conference call.
So the short of it...
1. Factory, build process, machines, paint, hiring pace is on track
2. Supplier issues are within acceptable parameters
3. Peter gave his resignation quicker than what Elon expected
4. Nick appears to have been let go
5. Neither Peter or Nick has ill will or were there any significant disagreements
6. Safety is a concern to get 5 stars in all categories
7. There will be test rides of the *ONE* Model X (SUV-like) prototype at the Feb 9th event in LA.
Long of it....
1. Elon
a. Apologizes for the way the news came out
b. He believes the news is positive
c. Intended to convey it at the earnings announcement
d. He believes it is his fault
e. Actual personal reasons, Peter resignation
f. There wasn’t a good fit for Nick at this phase of the development cycle
g. Meet or do better than July
h. 20K cars next year
i. 25% margin, at least
j. Model X is going to be extremely well received
2. JB
a. Powertrain, electronic and infotainment as well as manufacturing of those components
b. His team is on track with key performance metrics
i. Including 4.4s on a real road
ii. Top speed of 130MPH
iii. Full motor winding line complete
iv. Doing final validation of Model S components
v. EPA certifications are going well
3. Jerome
a. On schedule, high quality, stick to budget: business as usuall
b. Beta build is proceeding on track
i. Test cars are undergoing 2nd winter test in Minnesota
ii. Aerodynamic tests are better than expected
iii. Crash testing
1. Component is going well
2. Body panel is going well
3. Full crash testing is pending
4. Elon reiterated that there will be no safer car that can be bought
4. ???
a. Overall timing for manufacturing is on time
b. Using actual production equipment in Freemont
c. Hiring is on track, expect to double workforce this year
d. Tooling is on track, receiving more dies from Japan
e. Release candidate build is set for March
5. George Blankenship
a. Stores are doing well with significant traffic
b. 6 new stores in US
i. ~300K customers in December
c. 8000 Model S at year end
d. Options and pricing was received very well since reservations accelerated
e. More design stores are coming this year
6. Elon again
a. More customers are getting test drives
b. Very happy, couldn’t be happier
7. Steve – BofA
a. Supplier and paint shop worries or bottlenecks
i. Elon – Low probability of issue of supplier issue
1. If issue, they could produce the component in house
a. Airbag being the exception, but is largely put to bed in this stage
b. Considers 4 stars in any category being undesirable
2. Quality is good, but they are iterating
ii. Gilbert – Paint shop is fully operational in automatic mode
1. Painted 4 different colors
8. Patrick – Goldman Sachs
a. IP protections on employees
i. Elon – Lots of patents as well as trade secrets policies to ensure
1. They were working on body and chassis and nothing else
a. Estimating size and weight
2. They arrived after the 1st prototype of Model S
b. How involved were Peter and Nick in Model X
i. Team that is working on Model X will be at the event
9. Rod – Deuche Bank
a. Last minute changes for insourcing
i. Inpressure diecasting is coming in house due to economics
1. Machine is being delivered and installed at Freemont
ii. Battery pack – Continued refinements in next 2 to 3 months
1. Testing for corner cases (1 in a million type of events)
b. Last minute changes for Safety (like the Volt)
i. Denmark accident with Prius, Toureg and Roadster
ii. Never been a serious injury in a roadster
iii. Never been a battery pack fire
iv. Only a lead acid battery melting a headlight
v. Tesla has more *other* battery packs deployed than GM without issue (Smart and A-class)
10. Amir – Barclays
a. Internal safety testing information
i. Elon – Mentions blog for updates when available
ii. Each cell is double fused internally
iii. More breaks at external levels (triple fused)
iv. If liquid cooling fails there is no domino effect of failure
v. Vindication of all cell strategy which act like firebreaks in the forest so no issue with one cell can propagate to others
1. Software and electronics are more complex but it’s inherently more safe
11. Carter – Driscol
a. More information about departures
i. Elon - Neither one have left for a competitor
ii. No signification disagreement on Model S or X
iii. Skillset was not suited for the new phase of development
iv. Team of 20 yes, team of 200 no, new level of maturity
b. Model X event
i. Feb 9th at downtown LA, like an SUV, 1st prototype, they will do test drives, but they only have one test ride
12. Micheal – Robert W Beird
a. Better PR and management of external communications so there is no distraction
i. Elon – we are continuing to see reservations accelerate, no issues seen so far
13. Andrea - ???
a. One Model S from start to finish at Freemont
i. Gilbert – We have finished a beta build all in house in an automated fashion (not quite a 100%)
ii. Elon – Clarified that his use of renaming the executive meeting room was indeed a joke
14. Elane - ???
a. How much notice did they give
i. Elon – Onboarded in 09, had a sense there needed to be a transition (Peter) but it happened quicker than anticipated. Nick was let go, not his decision
b. Safety
i. Car is passing, but need to get it to 5 stars in all categories. They are working on a specific size of occupant that is unbelted.
15. Steve – BofA
a. China
i. George – Working on China engagement, positioning company well.
16. Brian – Russell Group
a. Interior will be finished and in showroom
i. Elon – Production fit and finish is better
b. Test drive
i. Release candidate phase, 3 months or so, March/April with 100% homologated
c. Update on deals with other companies
i. Optimistic, but can’t comment
17. Amir again
a. Gross margin target timeline
i. 25% in 2013 is on track with very specific details on cost, not significant amount of uncertainty left
ii. It’s going to be some number better than 25% and will improve over the course of 2013
18. Elaine again
a. Is the car legally approved for public roads from non-company employees
i. Set for no later than July
19. Concluding remarks
a. Elon – Thanks to everyone!
Summary first and then some rough notes from the conference call.
So the short of it...
1. Factory, build process, machines, paint, hiring pace is on track
2. Supplier issues are within acceptable parameters
3. Peter gave his resignation quicker than what Elon expected
4. Nick appears to have been let go
5. Neither Peter or Nick has ill will or were there any significant disagreements
6. Safety is a concern to get 5 stars in all categories
7. There will be test rides of the *ONE* Model X (SUV-like) prototype at the Feb 9th event in LA.
Long of it....
1. Elon
a. Apologizes for the way the news came out
b. He believes the news is positive
c. Intended to convey it at the earnings announcement
d. He believes it is his fault
e. Actual personal reasons, Peter resignation
f. There wasn’t a good fit for Nick at this phase of the development cycle
g. Meet or do better than July
h. 20K cars next year
i. 25% margin, at least
j. Model X is going to be extremely well received
2. JB
a. Powertrain, electronic and infotainment as well as manufacturing of those components
b. His team is on track with key performance metrics
i. Including 4.4s on a real road
ii. Top speed of 130MPH
iii. Full motor winding line complete
iv. Doing final validation of Model S components
v. EPA certifications are going well
3. Jerome
a. On schedule, high quality, stick to budget: business as usuall
b. Beta build is proceeding on track
i. Test cars are undergoing 2nd winter test in Minnesota
ii. Aerodynamic tests are better than expected
iii. Crash testing
1. Component is going well
2. Body panel is going well
3. Full crash testing is pending
4. Elon reiterated that there will be no safer car that can be bought
4. ???
a. Overall timing for manufacturing is on time
b. Using actual production equipment in Freemont
c. Hiring is on track, expect to double workforce this year
d. Tooling is on track, receiving more dies from Japan
e. Release candidate build is set for March
5. George Blankenship
a. Stores are doing well with significant traffic
b. 6 new stores in US
i. ~300K customers in December
c. 8000 Model S at year end
d. Options and pricing was received very well since reservations accelerated
e. More design stores are coming this year
6. Elon again
a. More customers are getting test drives
b. Very happy, couldn’t be happier
7. Steve – BofA
a. Supplier and paint shop worries or bottlenecks
i. Elon – Low probability of issue of supplier issue
1. If issue, they could produce the component in house
a. Airbag being the exception, but is largely put to bed in this stage
b. Considers 4 stars in any category being undesirable
2. Quality is good, but they are iterating
ii. Gilbert – Paint shop is fully operational in automatic mode
1. Painted 4 different colors
8. Patrick – Goldman Sachs
a. IP protections on employees
i. Elon – Lots of patents as well as trade secrets policies to ensure
1. They were working on body and chassis and nothing else
a. Estimating size and weight
2. They arrived after the 1st prototype of Model S
b. How involved were Peter and Nick in Model X
i. Team that is working on Model X will be at the event
9. Rod – Deuche Bank
a. Last minute changes for insourcing
i. Inpressure diecasting is coming in house due to economics
1. Machine is being delivered and installed at Freemont
ii. Battery pack – Continued refinements in next 2 to 3 months
1. Testing for corner cases (1 in a million type of events)
b. Last minute changes for Safety (like the Volt)
i. Denmark accident with Prius, Toureg and Roadster
ii. Never been a serious injury in a roadster
iii. Never been a battery pack fire
iv. Only a lead acid battery melting a headlight
v. Tesla has more *other* battery packs deployed than GM without issue (Smart and A-class)
10. Amir – Barclays
a. Internal safety testing information
i. Elon – Mentions blog for updates when available
ii. Each cell is double fused internally
iii. More breaks at external levels (triple fused)
iv. If liquid cooling fails there is no domino effect of failure
v. Vindication of all cell strategy which act like firebreaks in the forest so no issue with one cell can propagate to others
1. Software and electronics are more complex but it’s inherently more safe
11. Carter – Driscol
a. More information about departures
i. Elon - Neither one have left for a competitor
ii. No signification disagreement on Model S or X
iii. Skillset was not suited for the new phase of development
iv. Team of 20 yes, team of 200 no, new level of maturity
b. Model X event
i. Feb 9th at downtown LA, like an SUV, 1st prototype, they will do test drives, but they only have one test ride
12. Micheal – Robert W Beird
a. Better PR and management of external communications so there is no distraction
i. Elon – we are continuing to see reservations accelerate, no issues seen so far
13. Andrea - ???
a. One Model S from start to finish at Freemont
i. Gilbert – We have finished a beta build all in house in an automated fashion (not quite a 100%)
ii. Elon – Clarified that his use of renaming the executive meeting room was indeed a joke
14. Elane - ???
a. How much notice did they give
i. Elon – Onboarded in 09, had a sense there needed to be a transition (Peter) but it happened quicker than anticipated. Nick was let go, not his decision
b. Safety
i. Car is passing, but need to get it to 5 stars in all categories. They are working on a specific size of occupant that is unbelted.
15. Steve – BofA
a. China
i. George – Working on China engagement, positioning company well.
16. Brian – Russell Group
a. Interior will be finished and in showroom
i. Elon – Production fit and finish is better
b. Test drive
i. Release candidate phase, 3 months or so, March/April with 100% homologated
c. Update on deals with other companies
i. Optimistic, but can’t comment
17. Amir again
a. Gross margin target timeline
i. 25% in 2013 is on track with very specific details on cost, not significant amount of uncertainty left
ii. It’s going to be some number better than 25% and will improve over the course of 2013
18. Elaine again
a. Is the car legally approved for public roads from non-company employees
i. Set for no later than July
19. Concluding remarks
a. Elon – Thanks to everyone!
And none of the 2000 had battery fires.
