Will Tesla be Ready for 500,000 Model 3's?

[Garlan Garner]

OMG, There is a new master plan to build more buildings for the M3? Are you kidding?

There is no way they can build buildings to produce the M3 and install all of the infrastructure/robots to get them rolling out of the door in a year.

Tesla releases new ‘master plan’ to double the size of the Fremont factory to support Model 3 production

Unless this article is old and Tesla has already built these building...I just don't see how they can get it done.

Their focus might have to move from Mars to Fremont.

 

[Red Sage]

These are all great points, and I haven't even read the linked article! Good job!

I think that what concerns Tesla Motors most is the ratio of locations to sales. The Tesla Model S has effectively matched, and slightly exceeded, sales of the Mercedes-Benz S-Class from 2013 through now. There are '368 associated dealerships' for Mercedes-Benz in the US, and they managed to sell 21,934 of the S-Class. That works out to an average of 59.6 units per location. For comparison, Cadillac has 928 locations in the US. Tesla had 96 locations in June 2016, I'm not sure how many were around during 2015, but they sold 26,400 cars. That is instead 275 units per location.

If Tesla expands to as many as 200 locations by the end of 2017, they'll still have far less than AUDI, BMW, and Mercedes-Benz. So, if they built perhaps 350,000 of Model ☰ during 2016... And 80% of those were Delivered to Customers, that would be 280,000 units Worldwide... And 60% of those went to US Customers, that would be 168,000... And that would be an average of 840 Model ☰ per US Tesla Store that year. I definitely believe they can manage that rate rather easily.

There's, as usual, good and bad points to this article:

1) Dealers are there to make money. Most money now is via service. Tesla (albeit they have had teething problems), isn't going to require the same level of service time and intervals as an ICE. Less need for dealers (note: Not saying they don't have a shortage, but am saying there's less of a need so comparing ratios to standard auto sales & service for ICE dealership, needs tweaking).

(ex: took the Volt in for 1 yr service since 2 yrs were 'free' w/ the lease. They rotated tires, and that's it.... no need for oil change, fluids check, anything else. Oh they also washed it, told me to come back in a year and tried to sell me a Suburban).

2) Japan. If the authors drove in Japan they might realize a large footprint S/X isn't the first choice. The model 3 fits better. Also, for branding purposes, yes, you still want to have a flagship store in arguably one of the largest economies of the world. You must have a presence.

3) Nissan plant. There's a bit more assembly and less actual production than Tesla. So comparisons to a large, long standing ASSEMBLY plant need to be backed off a bit. Dechard (1.2M sq feet, w/ 2K workers) makes the engines, not Canton (4.7M sq ft), which is called vehicle ASSEMBLY.

Not saying there's sufficient dealers or ever will be. But pointing to the status quo ratios and screaming insurmountable problem isn't the strongest of arguments.

 

[Red Sage]

So the established auto CEOs' arrogance and judgement could be notched down a bit. And it was, with 375K EV reservations.... Funny how every major car co now has announced an EV product line and billions of dollars being invested in EV tech.

I think that the one-two punch of the Model ☰ Reveal Part I and worldwide sanctions against Volkswagen AG for DieselGate combined got their attention. I still don't believe they are being fully sincere with their EV programs though. The fact that almost everything they show has the word 'concept' attached to it is a strong clue, I think.

 

[Red Sage]

Why did you quote me?

Uhm... Informational context?

I probably should have quoted the other guy too.

 

[Red Sage]

This is great information; very well thought out and presented --- thanks so much. This is going to be VERY interesting how Tesla approaches these non-traditional hurdles (in addition to the traditional hurdles). I promise to stay-tuned.

Good! Glad to help!

On a different subject...

Economic Effects Of State Bans On Direct Manufacturer Sales To Car Buyers | ATR | Department of Justice

FTC urges Michigan to drop Tesla sales ban

Below is an excerpt from a letter to Senator Darwin L. Booher, 35th Senate District, Lansing MI, by representatives of the U.S. Federal Trade Commission dated May 7, 2015.

... Finally, advocates for a categorical ban on direct sales argue that direct-selling manufacturers would charge higher prices to consumers. In their view, consumers benefit from the "intrabrand" competition between dealers of the same brand of vehicle. In other words, rival dealers in the same area that sell the same make and model of car compete for business and competition between them can lower prices for car buyers. Manufacturers, they maintain, would not be subject to the same competitive pressures.

This view is inconsistent with modern economic learning and with the Supreme Court's widely accepted observation that strong "interbrand" competition—competition between rival manufacturers—can suffice as a source of downward pressure on price. 23 Manufacturers in a competitive market face acute pressure to keep prices low to keep buyers from shifting their purchases to a competing manufacturer's product. Thus, forcing firms to use inefficient distribution methods can result in higher prices and other forms of consumer harm. ...

Marina Lao, Director
Office of Policy Planning
Deborah Feinstein, Director
Bureau of Competition
Francine Lafontaine, Director
Bureau of Economics​

 

[Model 3]

OMG, There is a new master plan to build more buildings for the M3? Are you kidding?

There is no way they can build buildings to produce the M3 and install all of the infrastructure/robots to get them rolling out of the door in a year.

The Fremont factory as it stands should be all they need to produce the Model S+3+X in 2017 and the planed 500k cars in 2018. But may be needed to expand to up 1m in 2020 or so. 3-4 years? Seems likely to be "just in time"

Thanks for the link, I have been waiting for years to see them expand this factory, as it was clear that sooner or later they would have to do it anyway if everything worked out as planed.

 

[Troy]

Hi, everybody. Here is the situation:

Worldwide:
31 Mar 2016: 121 service centers, 122,250 Teslas, 1,010 Teslas per service center.
08 Oct 2016: 129 service centers 164,349 Teslas, 1,274 Teslas per service center.

USA:
31 Mar 2016: 59 service centers, 71,808 Teslas, 1,217 Teslas per service center.
08 Oct 2016: 61 service centers 92,594 Teslas, 1,518 Teslas per service center.

California:
31 Mar 2016: 18 service centers, 29,065 Teslas, 1,615 Teslas per service center.
08 Oct 2016 : 19 service centers 39,467 Teslas, 2,077 Teslas per service center.

New service centers in the USA since 31st March 2016:
1. Tempe AZ. University Drive, Aug-16
2. San Francisco CA - Van Ness, Aug-16

These moved elsewhere:
1. Austin-Pond Springs (old location: Austin-Burnet Road)
2. Bellevue-20th Street (old location: Bellevue-16th Street)
3. Dallas-Cedar Springs Road Service Plus (old location: Dallas-Farmers Branch)

The situation might not be as bad as the numbers make it look like because of the following reasons:
• Tesla might have more technicians per service center now.
• Tesla sometimes closes down smaller service centers and opens larger ones.
• They might have added more shifts.

In fact, last time I posted similar data in another topic, somebody from Tesla wrote back and said the following:

It's not service center count that defines capacity. It's square footage, number of technicians and number of shifts. Source

Also, check out my topic here: Tesla Service Center Stats. Recently I added daily counters for the USA and worldwide. These numbers are updated automatically every day. I will update the EU numbers in 2-3 days. I'm waiting for latest registration numbers to be released.

Data sources:
1. Wayback machine: USA service centers on 9th Apr 2016.
2. California Tesla registrations are published by CNCDA.org
3. 2014 and 2015 USA sales were published by Tesla here. 2012 and 2013 are known data because Tesla sold cars only in North America and Europe and Europe registration numbers are public data. 2016 USA numbers are my calculation. More details here.
4. Worldwide Tesla sales are published in shareholder letters.
5. Current service center numbers are available on Tesla website here.

 

[xav-]

I was at the Paris auto show yesterday.. And as my dad put it.. There was nothing really interesting besides Teslas. And my dad is no fan of Tesla. We could just have headed to a Tesla showroom and save the money.

99 percent of the cars we came across were ICEs.

We came across the bolt.. It looked worse than in pictures. $38k for that? It honestly looked like a Ford Fiesta with a big battery. There is no way that this is comparable to a Model 3.

So to answer OP.. I have no freaking idea how they can pull it off.. But we better hope that they do.. Cuz my feeling from the auto show yesterday is that we won't find any descent alternative for a long time.

 

[purplewalt]

Hi, everybody. Here is the situation:

Worldwide:
31 Mar 2016: 121 service centers, 122,250 Teslas, 1,010 Teslas per service center.
08 Oct 2016: 129 service centers 164,349 Teslas, 1,274 Teslas per service center.

USA:
31 Mar 2016: 59 service centers, 71,808 Teslas, 1,217 Teslas per service center.
08 Oct 2016: 61 service centers 92,594 Teslas, 1,518 Teslas per service center.

California:
31 Mar 2016: 18 service centers, 29,065 Teslas, 1,615 Teslas per service center.
08 Oct 2016 : 19 service centers 39,467 Teslas, 2,077 Teslas per service center.

New service centers in the USA since 31st March 2016:
1. Tempe AZ. University Drive, Aug-16
2. San Francisco CA - Van Ness, Aug-16

These moved elsewhere:
1. Austin-Pond Springs (old location: Austin-Burnet Road)
2. Bellevue-20th Street (old location: Bellevue-16th Street)
3. Dallas-Cedar Springs Road Service Plus (old location: Dallas-Farmers Branch)

The situation might not be as bad as the numbers make it look like because of the following reasons:
• Tesla might have more technicians per service center now.
• Tesla sometimes closes down smaller service centers and opens larger ones.
• They might have added more shifts.

In fact, last time I posted similar data in another topic, somebody from Tesla wrote back and said the following:


Also, check out my topic here: Tesla Service Center Stats. Recently I added daily counters for the USA and worldwide. These numbers are updated automatically every day. I will update the EU numbers in 2-3 days. I'm waiting for latest registration numbers to be released.

Data sources:
1. Wayback machine: USA service centers on 9th Apr 2016.
2. California Tesla registrations are published by CNCDA.org
3. 2014 and 2015 USA sales were published by Tesla here. 2012 and 2013 are known data because Tesla sold cars only in North America and Europe and Europe registration numbers are public data. 2016 USA numbers are my calculation. More details here.
4. Worldwide Tesla sales are published in shareholder letters.
5. Current service center numbers are available on Tesla website here.

I don't know about the other Service Centers, but the Dallas Service Center is MUCH larger complex than previous location.
It did not just relocate, it Super-Sized.
And it is also combined with a Sales Center, so there are now Two Sales Galleries in Dallas (other is still in NorthPark Mall), One in Ft. Worth.

Previous Service Center in Farmers Branch had three lifts.
Current Service Center has nine lifts, and probably more service bays, but I haven't counted.
And they are working late hours prepping cars for delivery.
And many more Technicians and Service People, with a indoor office area for Service personnel and a separate waiting Lounge.
I think I heard the number of Technicians has quadrupled from the previous location.
And every one of the new Technicians has to be trained to work on Teslas.
Their certifications had been previously posted on the Service Center wall, I haven't seen the new wall with all the certificates yet.
Very experienced workers from other High-End Automobile Brands are taking the career change and starting the next phase of their career with Tesla, learning how to service and repair these vehicles.
It takes time, money and commitment to be trained and re-learn a whole new operating system for vehicles, because it is unique and so different from anything else.
Tires, Brakes and Suspension might be similar, but all the rest of the technology is really new stuff.

Previous Service Center had very limited parking inside for any vehicles, and an across-the-street building for some car storage and car deliveries, and parking lot was usually full or very tight on spaces.
Current Service Center has over 30,000 SF of indoor parking for cars, with much more outdoor parking.
And there is now a designated indoor delivery area large enough for at least three new vehicles touch-up and for delivery to new owners.
(It is a special event to take delivery and be hand-walked around and thru your new Tesla, and have all the features explained to new owners).
Previously, only one vehicle could be parked and delivered indoors.
It was in the garage area, not a segregated area indoors.

There is now a Sales Gallery with vehicles with all the various finish Options (Paints, dash, and seat finishes) on display in its own separate area.

SUMMARY:
IF the Dallas Service Center "relocation" is any indication of the extent of what is going on at other Service Center Relocations, It is not a simple One for One exchange.
It is more like a Three or Four for One Growth Spurt and Expansion.

Quoting "It's not service center count that defines capacity. It's square footage, number of technicians and number of shifts."

 

[LectrikPower]

I have no anxiety, I'm not nervous at all. Tesla is fully aware of how important it is to get the Model ☰ just right. Elon is making the proper moves to ensure they succeed.

We shall see. Being aware and being able to execute are two different things.

I'm thinking that there is more time to address the SC issue than there appears to be. It's not like 500k cars will show up on day one.

 

[Red Sage]

Hi, everybody. Here is the situation:

My Parents went away for a week's vacation
And, they left the fob to the brand new Tesla
Would they mind...?
Hmmm... Well... Of course not!
I'll just take it for a little spin
And, maybe show it off to a couple of Friends...​

Thanks for the stats!

 

[Neohippy]

I have no anxiety, I'm not nervous at all. Tesla is fully aware of how important it is to get the Model ☰ just right. Elon is making the proper moves to ensure they succeed.

When you say proper moves do you mean expanding the factory? Or ensuring production is on schedule? Or making sure they eliminate as many quality issues as possible? I would agree with you Elon is doing his best to stay on schedule. They still have been having issues with the Model S after 4 years which is concerning. That's what worries me about getting a early Model 3. There are going to be a lot of vehicles delivered in a short period of time if they do as they say.

 

[Ric O'Barry]

Anyone know if the model 3 will have a roof rack option?

 

[Red Sage]

We shall see. Being aware and being able to execute are two different things.

I'm thinking that there is more time to address the SC issue than there appears to be. It's not like 500k cars will show up on day one.

Certain States both limited the maximum number of locations that Tesla Motors could have, AND indicated that if they closed an existing site it could not be moved to another -- unless it became an 'independent franchised dealership'. Making it so that Tesla Employees cannot either Deliver or Service cars in the State makes things even worse. That is one of the reasons for the current lawsuit with Michigan, I'm sure. Because upon winning at the Federal level, all those compromises can be revisited and either expanded (only five locations allowed in New York?) or eliminated (only two locations allowed in Colorado?). With all the 'interbrand' competition that exists between the 'independent franchised dealerships' that offer other brands, there is sufficient impetus for Tesla to offer their products without 'price gouging' as NADA's members continually predict. It isn't as if the hundreds of Cadillac, Chrysler, and Lincoln locations across the nation will suddenly evaporate because Tesla arrives on the scene to sell direct. Cars from those competitors might actually be able to outsell Tesla in certain regions where they are preferred... for a while. The Federal Trade Commission has been consistent in stating that the public interest is best served by healthy competition in business and that there are rare instances where protectionism is of any benefit whatsoever.

 

[Red Sage]

When you say proper moves do you mean expanding the factory? Or ensuring production is on schedule? Or making sure they eliminate as many quality issues as possible? I would agree with you Elon is doing his best to stay on schedule. They still have been having issues with the Model S after 4 years which is concerning. That's what worries me about getting a early Model 3. There are going to be a lot of vehicles delivered in a short period of time if they do as they say.

I mean every single conceivable [GOLDURNED] thing under the sun. There is no need for one thing to be put on hold for another. But everything must be prioritized, and done in the correct order as well. It isn't so much a serial process so much as it is a parallel one. Everything must be done quickly, accurately, and precisely.

The expansion of the factory has been a given since the moment Tesla noted their intent to take on the BMW 3-Series by building 500,000 units of their Generation III vehicle per year by 2020. That was over three years ago.

Production scheduling of Generation III vehicles has been tied to a particular schedule since Tesla noted their need for a Gigafactory to meet the need for battery cells. That was about three years ago.

Quality Issues have been an ongoing concern for improvement of their manufacturing process for a long time. That's why Elon indicated they make an average of about 20 improvements to the cars per week, and he said that over two years ago. Plus, he has already stated the priority for the Model ☰ is to ensure ease of manufacturing. I believe that will certainly improve quality as well.

Once again, the schedule is to make sure that Gigafactory output and Model ☰ Production come together and ramp together at a consistent rate. The completed Gigafactory will have three times the previously expected capacity by 2020. Elon has said he hopes to Deliver between 100,000 and 200,000 of the Model ☰ in 2017. Think about that. Personally, I'd feel they were in great shape if they Delivered around 50,000 of them that calendar year, especially if the first public Sale is in 'late 2017'. This is a very aggressive schedule. And when you really think about it...? That means those cars might be configured beginning around late August/early September then manufactured and shipped to reach Customers beginning perhaps the first week of October. Deliveries would certainly be less than Production, which would likely be less than Capacity. Just to reach 100,000 Deliveries, during the last three months of the calendar year, would mean that an average of 8,333 Customers would receive their cars -- per week. If that were 80% of the cars that were built, that would equal a build rate of 10,417 cars per week, or about 504,167 cars per year. For this reason, I expect that Deliveries will begin a little earlier than October, perhaps as soon as July or August.

As for "...having issues with the Model S..." what exactly are you speaking of...? The biggest complaints I've heard were over drive units that used steel bearings before they switched to ceramic ones. Beyond that, it seems people's complaints are more about the 'quality' of materials used in the interior and that people can 'hear road noise'. Idunno about you, but those are the sort of things I roll my eyes over, then [IGNORE]. Mostly because such 'issues' are easily fixed, if you want them to be. I think some people just like complaining for the sake of hearing their own rants. Because honestly, I've never seen any automobile manufacturer pay as close attention to the materials used in their vehicles as Bentley and Rolls-Royce. Every other company pales in comparison.

For comparison? I once worked with someone who was surprised to walk out to her brand new Chevrolet Beretta one morning, just weeks after they bought the car, unlocked it, and the door fell off when she tried to open it. That is what I call a quality issue. The fraying of stitching around the edge of a rub point at the B-Pillar is simply wear and tear. That happens in the real world and stuff. And Tesla will fix that for you anyway, whether you complain about it or not.

 

[Red Sage]

Anyone know if the model 3 will have a roof rack option?

We don' need no steenkin' roof-rack mounts!

www.seasucker.com/product-category/board-kayak/

 

[Sharkbait]

We don' need no steenkin' roof-rack mounts!

LOL! I see people in SoCal driving around in their Beamers with roof racks on all year long, as if to prove they know how to snow ski or actually even own a set of skis.

 

[ggnykk]

Once Model 3 arrives, I am predicting that it will be complete chaos in terms of production, maintenance service, quality, customer service for probably 1 year or more, before things start to settle down, and Tesla starts catching up.

 

[S3XY]

Honestly? I expect that there will be gozillion page discussions here from people who are much more demanding than even the worst cases of hypercritical Model S and Model X owners we've seen so far once the Model ☰ arrives. I intend to promptly [IGNORE] a bunch of those who contribute to those discussions with unfounded accusations and general stupid stuff. (Obviously, I have no designs on becoming a Moderator here, God Bless 'em!) There will be adjustable height shoulder belts in the Model ☰, and door pockets, at least... But without the prerequisite number of cubby holes, and straps, and grab bars, and light fixtures, and coat hooks, and 3.5 cupholders per passenger, and the endless list of useless 'features' that are naught but bells & whistles...? There are going to be a LOT of ANGRY people who simply don't understand the design philosophy at all. And those very same guys are going to be part of ridiculously frivolous class action lawsuits that will quite often be dismissed out of hand over truly stupid $#!+. Things are, unfortunately, going to get far worse in the complaints department.

This is gonna be fun to watch, for a while. Then I'm gonna have to get away from this place. Seriously.

I have a feeling that at that point we're all going to spend more time away from this place because we'll be having too much fun driving our new M≡'s to be posting here.

 

[CarlitoDoc]

To answer the OP: NO, hell no, they are not ready.