Tesla meets self-imposed deadline for Model 3, rolls out 5000 cars in a week

https://www.cnbc.com/2018/06/29/tesla-q2-production-and-delivery-numbers.html

by melling • 8 years ago

361 358 8 years ago

That's impressive. I've read a great many analyses stating Musk'll never succeed in his model 3 ramp up. Let's hope he keeps this up in the coming months. It's a long way to 450.000 vehicles...

Someone12343• 8 years ago

I've read a great many analyses stating Musk'll never succeed in his model 3 ramp up.

*By the deadline he provided. Which he didn't.

grecy3• 8 years ago

This means they're now making about 7,000 vehicles total per week (S+X+3), which means they'll make more vehicles in the next 12 months than they have made in the previous 10 years.

I'd say they're ramping pretty fast!

EDIT: 7,000 per week, not per month, thanks below.

jacobkranz• 8 years ago

7,000 vehicles per week

gizmo3• 8 years ago

Tesla pulled people from the S&X lines to reach their 5000 Model 3 goal. No way they also produced 2000 S&X cars in the past 7 days. In addition, their current death march schedule isn't sustainable. They won't come close to producing 7k cars in any week in July.

Tesla needs to spend billions in capex in order to get to 5000 M3 and beyond if they want to produce at a sustainable pace with acceptable quality. Billions they don't have.

chrisper• 8 years ago

Does quality match the quantity here? I remember Tesla having lots of quality issues (misaligned doors etc)

ryanhuff3• 8 years ago

Mine looked good.

aphextron2• 8 years ago

Given that half of those 5000 are being produced in a tent in the parking lot with summer heat and no AC, I can only imagine.

raverbashing• 8 years ago

You can have AC on big tents, and I would be surprised if they didn't as your external 40C could easily become dangerous in a literal greenhouse.

At least forced ventilation is needed.

donarb• 8 years ago

Along with blowing dust, pollen, birds, rodents, etc. Factories don't need to be clean roomed like they do for computer chips, but you'd think it would be closed to the outside elements.

RaceWon2• 8 years ago

My question is who R&D's these cars at the limits of adhesion? Every single auto maker track tests their cars using real racing drivers who understand vehicle dynamics and can comfortably drive street cars on the limit, and over it. Track testing ensures a car is safe for the average driver, who has no idea that the throttle steers the back of the car-to give just one example.

How will these cars behave when little Jimmy rides his bike in front of them and they have to execute evasive maneuvers?

I hope someone who has a clue about driving was seriously involved with the handling characteristics, otherwise who knows how these cars will behave.

inferiorhuman3• 8 years ago

Given that half of those 5000 are being produced in a tent in the parking lot with summer heat and no AC, I can only imagine.

Well, Musk himself said that the cars being made in the tent are higher quality.

“It does everything that the other assembly lines do but with fewer people, lower labor costs and much higher uptime,” he said. “Our unit cost for vehicles is lower on that line than on the other lines, and we’re seeing higher initial quality.”

https://www.nytimes.com/2018/06/30/business/tesla-factory-mu...

minhazm• 8 years ago

I think the estimates I saw were a few hundred are being produced in the tents. In any case, the customers are who will deal with any quality issues. If there are issues, Tesla has a track record of making things right for the customer.

technofiend• 8 years ago

That plus the fact that Tesla doesn't have a dealership system to distribute the repair load and parts will be going to new cars if current Tesla owner complaints are any indicator and at least for me there is no way I'd buy a Hail Mary car built in 2018. Give him time to work out reliably making 5k cars per week then sure, but I think you're still somewhat in an early adopter phase buying a Model 3 right now. If I had to buy one tomorrow I'd go for a used S.

ArtWomb3• 8 years ago

Finally got to drive Model 3 yesterday. A friend received his car a few days ago and let me try it on some suburban streets. Nothing fancy. But I did take it for a mini "drag race" against another buddy's Porsche 911. Again this was on a residential tree-lined street with kids playing outside. Not exactly fast and furious. But it definitely kept pace that first eighth of a mile ;)

In my humble opinion it outclasses all similar rides: Audi A4, Mercedes C Class, BMW 325, etc. And with charging stations popping up in every supermarket, office park, highway rest area, etc. It may rapidly become the brand of choice for young, urban commuting professionals.

TaylorAlexander• 8 years ago

A friend of mine and I used to “race” (drive fast on public roads) together in high school.

One day he was driving fast on his own, and when he came around a corner he saw kids in the road. He swerved and missed them. He hit a tree and died.

Drive safely off the track.

ArtWomb3• 8 years ago

Am sorry to hear that, TaylorAlexander. This was not like that. We cleared the street beforehand, and the kids enjoyed the brief show. Admittedly, even despite the precautions, it felt unsafe. And I will certainly endeavor to keep it on regulation race tracks in the future :)

tsunamifury• 8 years ago

I find it hard to believe that it would outclass a C-class on interior luxury, a BMW on overall sportiness. I've driven all these cars, and when you get in a Tesla is definitely feels like a significant step down.

selectodude• 8 years ago

For a lot of people, "sporty" means "torque" and that's about it.

ryanhuff3• 8 years ago

I don’t think he/she said it outclassed a C-class on interior luxury.

ArtWomb3• 8 years ago

It's not the trim and details. It's the experience. Luxury car dashboard software lacks intelligence.

But I spent less than an hour with it. And am generally more of a Subaru Outback or Ford F150 person, though I still appreciate fine German engineering. Can't quite put my finger on it, but it just felt lighter than the MB 4-door sedans I have driven in the past. Despite the EV battery and distribution ;)

anothergoogler• 8 years ago

It may rapidly become the brand of choice for young, urban commuting professionals.

Municipal rail is the brand of choice.

jcims• 8 years ago

There’s a lot of work you can’t get to on municipal rail.

briandear2• 8 years ago

Still waiting on that train from Mountain View to Cupertino. Meanwhile, there is an Audi in the garage that can take me there anytime I want and a bus to take me there when I don’t feel like driving. I still find it really hard to take a week’s worth of groceries for a family of six on a train. Even if BART did go exactly where I needed, when I needed, I’m not inclined to risk Hepatitis or theft.

I understand that some people actually like being around strangers. I don’t. I like being in a mode of transportation where I can control the destination, temperature, aroma, and music. I don’t have to worry about people asking me for money or potentially assaulting me either. I don’t have to keep an eye on my bag, nor wait on platforms in all sorts of weather.

Public transport definitely has value, but ascribing it as the best choice is a viewpoint based on limited experience. When I was in Zurich, I felt much differently. But Zurich and the Bay Area are vastly different. They don’t have Prop 47 for instance.

Fins5• 8 years ago

Sorry, but even model S will not outclass any of these on the interior. A 10 years old A4... maybe.

Which does not stop it from being greatly popular with "urban commuting professionals" but by being a better car.

pkaye• 8 years ago

Can anyone tell me why they are taking a long time to ramp up? This is not their first electric car and electric cars are supposed to have a lot fewer components than gasoline engine cars.

gameshot911• 8 years ago

Producing physical things is hard. Issues crop up every step. Of the way, and any one thing can have big downstream impacts. Just think of the web of supplies chains that feeds into the components that go into a car. And in Tesla's case, throw in the fact that they are still a new company and haven't had decades to iron out all the kinks.

rootusrootus2• 8 years ago

They've been around 15 years and they bought a modern manufacturing plant purpose built to make cars. They can buy talent. I won't cut them too much slack, supposedly they're worth more than GM. Now prove it.

ISL• 8 years ago

The hardest part is the long-term testing. A failure mode that appears after ten or twenty years is the hardest to detect.

Imagine the financial impact of "Tesla recalls every Model S ever made due to stress-corrosion cracking in a critical chassis component"....

darawk• 8 years ago

The first reason is probably just that manufacturing stuff is hard, especially at scale like this. It takes a while to get good at it, and develop processes and talent to ensure production lines move along smoothly.

The second reason is that I think they invested heavily in an ultra-automated factory, and they weren't able to get that working quite as well as they'd hoped in the time allotted.

These are sort of the high-level reasons, maybe somebody with more specific knowledge could give a more nitty-gritty explanation.

Fronzie• 8 years ago

Although they did take over a car factory, they replaced all the internals. The 'reinventing the wheel' has led to initial mistakes (and lessons learned).

With the car industry about 100 years old, and fierce competition, the common wisdom can't be that foolish. So on the long term, structural improvements might well be possible, having ramp up problems when doing everything different is to be expected.

neom• 8 years ago

The supply chain is hard. Supply chain optimization is even harder. And that's not even discussing manufacturing. One of the biggest issues we had in very very very early days of DigitalOcean was, how do we juggle leases/lines of credit, with their requirements for cash in bank, with being out of capacity every other day. This is months of negotiation and conversation, not just snapping the fingers. Some tangential insight: http://money.cnn.com/2008/11/09/technology/cook_apple.fortun...

Nokinside3• 8 years ago

Producing low volume luxury cars and mass market $35,000 cars is very different. Mass manufactured cars must be designed for the manufacturing process in mind. Tesla is still constantly tweaking with the manufacturing process. The Model 3's they are delivering are still prototypes.

Tesla's knows how to make the electric 'skateboard' and it's technically far ahead of others. They are struggling with the traditional parts.

Munro Associates did completely Model 3 teardown and report for some customer. Munro said in a interview that had Tesla outsourced the manufacture and design of of the car minus the scateboard to a company like Magna they would have hit every target and even Toyota would be crapping their pants now. If the traditional mechanical parts of the car would have been even decent, Tesla would have mopped the floor with everybody.

verelo• 8 years ago

Does anyone actually buy a $35k version? I tried to spec one recently and couldn’t get anything i felt was acceptable for under 68k

kardos• 8 years ago

So if I calculated correctly that's 4855 per week or 3 percent short. Not bad!

JUDAS• 8 years ago

Musk has said to appear on Rogan's podcast when production of model 3 hits 5k/w.

https://jrelibrary.com/upcoming-guests/

https://twitter.com/joerogan/status/1005924723983675392?lang...

abledon• 8 years ago

That will be one of the most entertaining conversations. I love how chill the atmosphere is on that show.

obscurantist• 8 years ago

"Jamie, pull up the video of the chimp getting run over by a Tesla."

Luc• 8 years ago

Bertel Schmitt on Asymco's podcast was amusingly anti-Musk this week (listen from about minute 37) http://www.asymco.com/2018/06/27/asymcar-44-the-view-from-to...

annerajb3• 8 years ago

Amusingly? He has been like that for the past two years.

williamscales2• 8 years ago

"It was not clear if Tesla could maintain that level of production for a longer period of time."

I think this is the million dollar question—was this just a sprint effort to hit a milestone for PR sake or will they produce 5000 next week too?

stingraycharles• 8 years ago

I think it’s a good question to ask, but it doesn’t mean the milestone was meaningless. Several months ago this would have been unthinkable, and the 5000 deadline was arbitrary anyway.

meritt2• 8 years ago

Several months ago this would have been unthinkable

Unthinkable? Their Q4-16 Shareholder letter [1] (Feb 22nd, 2017) stated: "Our Model 3 program is on track to start limited vehicle production in July and to steadily ramp production to exceed 5,000 vehicles per week at some point in the fourth quarter and 10,000 vehicles per week at some point in 2018."

On July 2nd, 2017 Musk forecasted [2] 20,000 per month by December '17.

[1] http://ir.tesla.com/static-files/1ff901ba-bb25-4264-9153-7aa...

[2] https://twitter.com/elonmusk/status/881757617416056832

Someone12343• 8 years ago

the 5000 deadline was arbitrary anyway.

Wasn't it in multiple letters to shareholders? It is literally an update to debtors on the company's position, far from arbitrary.

Were Tesla required to give an estimate? Nope. But doing so may be used to attract further investment into the company, so it is far from innocent.

make3• 8 years ago

I think that most people would agree that it was implied in the idea of the milestone that it would be sustainable for more than 7 days.

agumonkey4• 8 years ago

Musk has been quite endurant so far. It's possible tesla will keep up, or not.

As long as tesla doesn't die i'd bet Musk will find a way to crank up the next stage.

calinet68• 8 years ago

One cannot will anything one wants into existence.

At some point, he'll need to understand how to design an effective large-scale manufacturing system, and not simply yell for one.

Specifically, he should actually learn some things about managing people, and the place that has in producing quality at volume at speed. It's sad, because that's exactly the lesson Toyota was trying to teach at NUMMI, and their legacy has been totally forgotten by its new owner—at great cost. It's simply a shame.

"According to this, they're using 7 times as many employees and still making less than a 1/5 of the cars NUMMI did when they had the factory." https://insideevs.com/teslas-fremont-factory/ -- via https://twitter.com/Benshooter/status/1012113642689519617

(albeit they're earlier in their maturity, for sure, but still)

mhb2• 8 years ago

endurant?

saas_co_de4• 8 years ago

They definitely cannot. These numbers are completely gamed within an inch of outright fraud.

dagenix• 8 years ago

pretty strong words from someone who doesn't provide any evidence

manicdee9• 8 years ago

So when they do maintain this rate for the next few weeks, is that still within an inch of fraud?

calinet68• 8 years ago

Those who know anything about manufacturing are seeing very clearly that this is unlikely, or if achieved will be done at great cost and waste.

https://twitter.com/skabooshka/status/1012000014376230913

Kranar2• 8 years ago

Those in the know said electric cars in general were an unpractical waste of money. I also remember three years ago hearing those in the know saying a self landing rocket would not be possible, and if it ever were made it would also be done at great cost and waste.

Heck, those in the know said even a couple of months ago that Tesla would not be able to achieve 5000 Model 3s by today.

The truth is, there aren't really any people we can claim are "in the know" when it comes to new, innovative approaches to manufacturing.

Maybe Tesla will fail, maybe it will succeed. I don't think anyone actually knows one way or another. Elon Musk and his crew are trying something no one else has bothered to try before and we just have to see how it goes and what lessons can be learned from it.

Latteland18• 8 years ago

that particular poster seems to be an anti-tesla troll. Certainly there is reason to wonder if Tesla can do what they are trying to do, they've had trouble so far. But it's not an impossible task, there are lots of companies in the world doing mass production of cars, tractors, etc, it's not some impossible task.

Animats• 8 years ago

Bloomberg's chart of Tesla Model 3 production[1] shows very low production rates in early June, around 1000. Maybe they saved some parts up for end of quarter. Let's see what happens over the next month.

A well-run production line produces about the same number of units per week. Tesla's weekly numbers are all over the place. Their cost per unit has to be very high, because the cost of running the plant is roughly constant as the output varies.

Eventually Tesla ought to get their plant debugged, but if they're doing assembly in a tent, that's in the future.

They also seem to be having trouble at the battery plant in Nevada, which is strange. That's a relatively simple product, and it's one they've built before.

[1] https://www.bloomberg.com/graphics/2018-tesla-tracker/

toomuchtodo4• 8 years ago

They timed production to maximize federal tax credits for US consumers.

Robotbeat4• 8 years ago

This was the first time they hit a peak of 5000 model 3s. Undoubtedly, this was at their limits right now, but they're STILL ramping up, so it won't be their last, either, and soon (months) will be at 7000-8000 M3s per week at a peak rate.

I just want to point out one thing: hustle is valuable. Not all companies can sprint like this when they need to.

xyzzy_plugh• 8 years ago

I've been at companies that could hustle, and hustled. I'm not sure it's valuable. In one case, our hustle was a waste, as a dependency was late. In another, our hustle was a success, and we launched to the world.

In both cases, me and colleagues made the same amount of money, experienced a degree of burnout, and if anything taught the company they can do it again if they want. Hustling at a sustainable pace? Sure. Sprinting, like death marches, just burns employees.

I would resist commenting, but I know those Tesla employees won't be getting a huge bonus or extra time off. I wonder how well it will go for them the next time.

Someone• 8 years ago

Looking at historical data:

- 2,425 model 3’s in Q4 2917, about a third (793) of them in the last week of 2017 (http://ir.tesla.com/news-releases/news-release-details/tesla...)

- 9,766 model 3’s in Q1 2018, about a fifth (2,020) of them in the last week (http://ir.tesla.com/news-releases/news-release-details/tesla...)

So, the Q1 average was about equal to that last week of 2017, but only because of a massive sprint (20% of production was in the last week of the quarter)

If that pattern has repeated itself, we should see about 26,000 model 3’s produced in Q2, 5,200 of which in the last week.

Also, based on these data points, they won’t produce 5,000 next week, but next quarter’s sprint will bring the average there.

I wonder what the cost of reaching that milestone is. That extra factory wasn’t free, and they either are driving their personnel into the ground or they had to hire and pay a lot more people (possibly even both, as new people being hired will need training)

freerobby• 8 years ago

Tesla expects to increase production to 6,000 Model 3s per week by late next month.

http://ir.tesla.com/news-releases/news-release-details/tesla...

empath752• 8 years ago

Let’s see if they’re actually building 5000 a week after another few weeks or if they just built these in a burst and it’s not sustainable. And let’s see how many returns and recalls there are.

colordrops5• 8 years ago

I don't understand the skepticism. He's not claiming to have built a perpetual motion machine. Even if it were the case that it's just a burst, it demonstrates feasibility. Of course the lines will get augmented and more efficient with time. It's not like there's some law of physics preventing regular deliveries of 5000 cars a week.

pwinnski• 8 years ago

The skepticism is simple: Musk has a history of making schedule pronouncements that fall through. He predicted they'd hit this milestone last year, and they didn't. In fact, he predicted they'd be far beyond this milestone by now, and they aren't. And he really, really, really hates it when people point how his broken promises and failed claims, so it's reasonable to expect he might be trying to play with some smoke and mirrors and distract everybody with a one-time hit at 5k, hoping we forget he's late, and that he said that would just be a stepping-stone on the way to 25k/week.

Or, you know, it could just be late, and he's on track slowly. But the skepticism is absolutely warranted, and there are probably better odds for the skepticism.

cma• 8 years ago

it demonstrates feasibility.

Not if they shut down or heavily impacted Model S/X production to achieve it.

Nokinside3• 8 years ago

It was not clear if Tesla could maintain that level of production for a longer period of time.

When Tesla reached it's 2,000 units per week deadline, they had production line shutdown soon afterwards. Then ramp up again from lower level.

Based on their previous numbers I would say that their next 3 month production average will be 60% - 80% of their last peak.

philipodonnell6• 8 years ago

with the final car rolling off the assembly line on Sunday morning, several hours after the midnight goal set by Chief Executive Elon Musk

No, they missed the deadline, twice now. Lot of Muskites in these comments, remember, Tesla failed to meet the same deadline in January and pushed it to June. (EDIT: I've been told they missed this 3 times now, the 5K/wk figure was originally Dec '17, then Jan '18 then Jun '18).

When it was clear they would miss again, they put up a third production line in a canvas tent, which the NYT quoted as "never heard anything like this ever" using what Musk tweeted as "scrap we had in warehouses" to build the cars. And even then, and running all three lines 24/7 striving to hit that goal for just 7 consecutive days with the whole world watching... they still came up 150 cars short.

(5k/wk / 168 hrs/week = 30/hr * missing the deadline by 5 hours = 150 cars short)

drdeadringer2• 8 years ago

This reads like the film "Gung Ho" made reality.

stcredzero• 8 years ago

What about "Tucker?"

arthurcolle• 8 years ago

Elon Musk continues to kill the game

danso• 8 years ago

I actually thought he was underpromising, and that Tesla would surprise the world by blowing past 5K weeks early. That they pulled out all the stops in the final weeks and still missed the deadline feels like a bad sign.

mjevans• 8 years ago

It's not the one time performance that matters, it's the rate of flow as time continues.

Also recall that band //width// can be increased for a cost while latency has hard upper bounds.

For anyone complaining about profit margins, think per unit profits rather than hitting some round base10 number.

panarky2• 8 years ago

Imagine that today is July 1, 2020. Looking back I see three scenarios.

1) It's clear now that the company is a sham and Musk is a snake-oil salesman. It's all smoke, mirrors, bubblegum and baling wire. After hitting 5000 cars per week one time, they never reached that level again. The company had to do a punishingly dilutive capital raise just to get 6 months more runway, and the company's market cap is now $6 billion (down 90% from 2018).

2) The company has continued to stumble from failure to failure with just enough successes to delay the day of reckoning. Musk is still sleeping in the factory trying to iron out kinks in the manufacturing process and automation. They're producing 3000 cars per week, but the quality is so poor that 30% of cars must be returned to the factory for rework. Competitors are likely to match Tesla's battery technology in the next 3 years, and the company's market cap is down by 50% from 2018.

3) After many delays and billions of dollars of cost overruns, Tesla has perfected the "machine that builds the machine". It's producing 40,000 cars per week in three factories in the US, Europe and China, and a fourth factory in South Korea opens next year. Tesla is cash-flow positive and the company's market cap is $600B (up 10x from 2018). In hindsight, all the delays people anguished about in 2018 proved to be nothing but amusing anecdotes in the company's history.

I assign probabilities of 10%, 50% and 40% to these scenarios, which equates to an expected market cap of $250B in two years. At $60B today, it looks like a bargain.

SEJeff• 8 years ago

Musk's future compensation directly hinges on your third scenario (well market cap of $650 billion, but close enough!):

http://fortune.com/2018/03/22/elon-musk-compensation-tesla/

shafyy• 8 years ago

You think there is a 10% chance that Musk is snake-oil salesman and a sham?

gizmo3• 8 years ago

Why should Tesla be worth 600B if they produce 2 million cars a year? Toyota makes 10M cars per year and has a market cap of less than 300B.

Future growth is already baked into Tesla's current valuation of 60B. They're not making any money today (in fact they're losing billions) but they have a high market cap because they might become profitable years from now. Once (if) they become a mature car manufacturer their valuation multiple will go way down. They'll be judged on their profit margin and FCF like any other car manufacturer.

Your best case scenario of Tesla growing their market cap by 550B in the next 2 years is completely unrealistic. Even Facebook didn't grow that quickly, and their profit margin is second to none.

sremani• 8 years ago

The third scenario seems 40% until you realize that 2 million Model 3s per year @ average price of 45K are being sold.

I am not a car market place expert, $45K cars do not usually move in those numbers.

edit: For reference, check the number of cars moved. https://www.statista.com/statistics/276419/best-selling-cars...

csomar• 8 years ago

I assign probabilities of 10%, 50% and 40% to these scenarios

Well, the devil is in the details. Where did these numbers come from?

jamesgblaine• 8 years ago

Also it isn't even their battery tech, right? It's Panasonic's.

confiscate2• 8 years ago

Your world view is too narrow. That 5000 figure is important, but it's not really meaningful in the grand scheme of things.

There is a 4th or 5th scenario, where

4. other car makers trail behind Tesla more and more in terms of technology. Remember, all these car makers had DECADES of head start developing EVs before Tesla was even born. Tesla was supposed to trail them in tech, not the other way around.

It's easy to assume that because a company is bigger, and have more resources and manufacturing experience, that they can move fast in developing tech. It's easy to judge a book by it's cover. Incumbents move slow ALWAYS. If moving fast was so easy, they would of done it before Tesla was born.

5. solar panels from SolarCity come into play.

Tesla has already deployed Solar grids in Australia. It's not just "smoke and mirrors", it's actually in production.

While the competitors are still trying to "match Tesla", Tesla has already moved on to find other areas to grow in tech advancement.

Right now, solar panels are considered a "toy". It's not even on any of the car makers' radar. It's like how Tesla's first Roadster cars were not on any of the car maker's radars 5 years ago. It's a "toy" until one day, it becomes a reality, and you tout your ability to "catch up" with your "vast experience"

5 years from now, folks like you will write another article, about how GM will be able to produce solar panels to "catch up to Tesla in just one or 2 years"

philipodonnell6• 8 years ago

Not to be rude, but these scenarios and percentages are all really random as is your valuation. Its far more likely they continue to do the same thing they have for the last year or two: limp through their slowly escalating production targets until the Model 3 is just one of several electric sedans available and there is no way to justify their multiples.

s2g2• 8 years ago

600B is insanity.

rsynnott3• 8 years ago

There’s also option 4, which I would say is most likely; Tesla is gone; the brand is owned by someone else. In practice, 1 and 2 would likely lead to this scenario.

EastSmith• 8 years ago

Your comment reminded me about this article "The War on Tesla, Musk, and the Fight for the Future"

https://www.dailykos.com/stories/2018/5/29/1767826/-The-War-...

8draco8• 8 years ago

Tesla is most overpriced startup currently on the market. It will crash in a spectacular way in near future. They are constatly missing deadlines, have quality issues, troubles to manufacture spare parts in sufficient quantity and have terrible work environment yet everybody are coming up with excuses for them. This will end at some point and that even beside the fact that electric car in reality create more pollution in vast majority of the world more than modern engines.

justAnotherNET2• 8 years ago

This will end at some point and that even beside the fact that electric car in reality create more pollution in vast majority of the world more than modern engines.

Is this thread being linked to by some Tesla short seller blog of what?

Surely this kind of misinformation isn’t organic to HN.

Latteland18• 8 years ago

I'm sorry but I think your facts are not true. Only people with an agenda to support the oil companies or something come out with claims that evs are terrible polluters. First, regular ice cars have pollution in their manufacture, and the production of gasoline has a lot of inefficiences, it must be transported physically. ICE engines are vastly less efficient in use of energy. Coal is a decreasing amount of power generation. It's just a silly argument that evs are terrible polluters. Of course there is some pollution in their creation, like any object on earth.

anoncoward1113• 8 years ago

Oh my god, come on. I'm a Tesla bear, and I don't really see a massive different between a rate of 4,850 cars and 5,000 cars....

ambicapter• 8 years ago

52 * 150 * 35,000 = 273M in revenue.

philipodonnell6• 8 years ago

If it wasn't that big of a deal, they would have hit the target before 5am the day after they were supposed to.

austenallred2• 8 years ago

OK, sure, but call it 4850 of 5000 when everyone says there wasn't a prayer of making it is pretty remarkable. Call it 97% of the way. The fact that they built out a tent and hustled 24/7 to hit the goal is impressive to me.

Overall it's pretty classic Tesla/Musk. Predict the absolutely impossible, get 97% of the way there, and regardless of how you slice it the only thing that's not impressive is the facxt that they didn't meet the arbitrary guideline. They still crushed everything that anyone else thought was possible, so IMO it's a victory just a hollow one.

Will they be able to repeat this sustainably? Probably not unless they figure some other things out, but the point is that it's within striking distance. The company has a shot at profitability in the near future, and I see Teslas everywhere now.

In the past they missed it drastically; the number is important because if they can figure out a way to get to that level of production they have the chance to become cashflow positive relatively quickly.

jjeaff• 8 years ago

I see Teslas everywhere now.

Meaning you live in one of 4 coastal cities. Teslas are exceedingly rare everywhere but the wealthiest cities.

aplummer• 8 years ago

Yeah agree, I see no difference between 4850 and 5000 - people are so hung up in other comments on calling this a failure. It shows it’s possible, the rocket just missed the landing a bunch of times, nobody cares about that now.

WheelsAtLarge4• 8 years ago

It's not the number. It's the fact that people can't count on what the company says. So it's always a case of over promise and under deliver. So it's easy to focus on that fact and call the company and its founder flaky. Few companies can survive that.

But the reality is that they eventually deliver and Musk can keep investors engaged which keeps the company going with more cash. Even reaching 4850 is a big deal.

The real stretch goal is reaching profitability. I hope that happens soon.

Maro• 8 years ago

When it was clear they would miss again, they put up a third production line in a canvas tent, which the NYT quoted as "never heard anything like this ever" using what Musk tweeted as "scrap we had in warehouses" to build the cars.

I'm a software guy. Can somebody explain to me how you can build a high-tech auto production line from "scrap"?

grizzles• 8 years ago

I saw a drone video inside the tent, it looks mostly like service bays inside like you'd find at a small local car place that uses hand jacks. A mix of lift + non lift bays is common in any factory at the end of the line.

That fits with my analysis from a few days ago: https://news.ycombinator.com/item?id=17397505

manicdee9• 8 years ago

You can't. GP is completely misrepresenting everything about this situation: not a tent, not canvas, not scrap. Musk's tweet about scrap in a tent was very clearly a joke.

regularfry• 8 years ago

It probably refers to working equipment they replaced on the main production lines because they wanted something smaller/faster/shinier, but hadn't yet thrown out.

aerovistae• 8 years ago

So when musk just tweeted 7000 cars in 7 days, you’re saying you have information proving he’s committing some form of fraud? Could you elaborate? This is going to be a huge story and it looks like you’ll be the one to break it, which is pretty exciting.

konschubert• 8 years ago

They're also building Model S Cars

philipodonnell6• 8 years ago

When you miss a deadline to produce 5000 cars of a specific model I guess the other thing you can do is brag about producing 7000 cars and include all your models in that number.

WheelsAtLarge4• 8 years ago

Musk is certainly a self-promoter in the vein of P.T. Barnum. It's gotten to the point of irritation. But you can't deny he's changed the car industry.

A company's true function is to benefit society. Tesla has done that, so he gets a win from me. He's done it by taking chances and thinking outside the box. The tent is an example. Most companies would have given up but they did not.

20 years from now Tesla might not be alive but we will see its impact on the car industry. Very cool, Musk.

eptcyka• 8 years ago

A company's true function is to benefit society.

Could you elaborate on how did you come to said conclusion?

antpls2• 8 years ago

If you look at SpaceX launch schedules, many are delayed for several weeks/months. Yet it has a better public image than Tesla. I think missing deadline isnt that unexpected, it happens in many projects. If the goal is still achieved at a reasonable time after the deadline, it is still a success imho. It means the project is now a reality, and that's awesome.

GW1509142• 8 years ago

Missing a launch in rocketry is a normal and expected part of life in the industry, and no matter who is launching it happens. Missing targets for producing a car isn’t. This is what people mean when they say “comparing apples and oranges.”

ec109685• 8 years ago

They built almost $250M worth of cars in a week, which is a pretty large number (assuming avg selling price is 50k).

Latteland18• 8 years ago

If they almost got to that rate of 5k it's just as good. There's nothing magical about that number. Musk sets high goals and usually gets close, but it takes longer than he said it would. Reusable rockets, impossible, took years - but now we have them.

I can't understand the people that think he's a charlatan. They have sold approaching 200k electric vehicles. They are great cars, I have one. But separate from that, they always had a plan to increase production and sell more of cheaper cars, ramping up from first selling expensive ones. The latest ones are going to need a lot more volume before they can make them cheap enough to sell at 35k, such as higher battery production. They will lose money until they make them at high volume. It's not crazy to say they'll have a lot more money coming in as they raise production, that's like any business. The open question is will they actually make a profit. We can't know what the numbers are until they come out. Based on history, I think they'll get close to profitable but won't quite make it, but they'll clearly be headed in that direction as the early hurdles of increasing production are met. Again - it won't matter exactly when they are profitable if they are close. Just like the 5k/week number.

cjhopman• 8 years ago

His goal was 20000/mo with less than a quarter of the current manual labor that he's using. We're now twice as far along as the original goal, and he can't even make 5000 in a week when rushing cars through as fast and shittily as possible.

Building 5000/w is nothing if you're just willing to throw more and more money at it. The point of the original goal was that it was actually going to be a sustainable, profitable approach.

timwaagh• 8 years ago

promising news i think. a friend of mine said they would go under. i dont really want them to go under though.

avereveard• 8 years ago

Unless you are the one to receive the tent assembled model 3. If past rushes are an indicator of the future to be I totally expect a large recall operation following this stunt

njarboe5• 8 years ago

I would guess Tesla announces the 200,000th domestic sale sometime in the next week. They could be hitting their ramp-up to high production of the Model 3 right when they hit the 200k domestic electric car milestone. This also happens to be right at the beginning of a quarter so they can get as many $7500 federal tax credits for their customers as they can. One would guess this is not just some lucky coincidence, but who knows.

andromeduck5• 8 years ago

That's only for American sales so no reason why they can't ramp production and just export to other markets.

njarboe5• 8 years ago

That is why I said "domestic sales". They want to hit 200k US sales at the beginning of a quarter and when they have a high production rate. That would be this quarter starting July 1, as they are already very near the 200k limit. It's not reasonable to think they could export the whole next quarter's production of S, X and 3 production without many serious repercussions. One being pissing off hundreds of thousands of US model 3 reservation holders.

jacquesm• 8 years ago

What are the chances that cars from this period will develop above average defects?

rjplatte• 8 years ago

There's a pattern from Elon of overpromising, and then pulling through, but way later. I wouldn't be surprised if they're easily staying at a 5000/week production baseline in the next three months.

rich-w-big-ego5• 8 years ago

Elon used the same over-promising strategy during the build-up to the start of Model 3 production. Elon promised that Tesla would start producing Model 3s in July 2017, noting that production would not actually start until sometime later; since some supplier somewhere would mess up and miss the deadline (and have themselves fired), they would inevitably be delayed. It's the same thing in this case: promise really aggressively, and be serious about the promise, but understand that Tesla will be delayed by the least lucky, least effective part of the team/production line. This way, Tesla can be aggressive, even though if you go by their promises, they should be _really_ aggressive.

ycnewbienomore• 8 years ago

I can’t give up my Model 3. Driving any Tesla car is a dopamine hit. You really have to try and drive them to experience it and you’ll be hooked. Many people don’t realize what a refreshing and tremendous difference a smooth and powerful torque curve gives. Seriously forget all the noise about Elon Musk. Try and drive an electric car, which are by far still smoother than gear-shifting gas powered cars, and then try a Tesla.

pasta• 8 years ago

Tesla is not the only brand that creates electric cars.

This is all about Elon making clames he could not make true.

The danger for Tesla is that people don't want to wait for broken promises anymore and will choose another brand.

Edit: for example the Jaguar I-PACE might be very competitive.

ryanhuff3• 8 years ago

It’s not just being electric. I drove a Prius for several years before getting my Model 3. After now driving the Tesla for a month, I drove the Prius again last week. What an awful car.

rich-w-big-ego5• 8 years ago

The iPace would rival the Model X. The iPace is FAR behind the Model X in all performance measures. The iPace has a manufacturer's estimated range of ~350km, no EPA rated range given. The Model X has EPA rated maximum range of 475km - that's a third party verified range that is 125km above the estimated (and very optimistic) range of the iPace. As far as speed goes, iPace is 4.8s to 100km/h, while the P100D variant of the Model X is 0 - 100km/h in 3.6s, a solid second faster.

stevehawk2• 8 years ago

I have yet to hear anyone say they're impressed with the I-Pace

Fins5• 8 years ago

Sorry, but no, didn't do anything for me. Especially and particularly driving a Tesla, which felt almost like getting into a Yugo. Except Yugo was at least priced appropriately for its quality and comforts, and Tesla isn't.

davidgould2• 8 years ago

Exactly this. I drive a Chevy Spark EV, which is based on the worlds least exciting car ... and it’s brilliant! I would never buy another gas car, they just don’t drive well. And yet we hear all this dribble about panel gaps and the stitching on the seat leather. I never knew there were so many so willing to look so silly in public.

Fins5• 8 years ago

Panel gaps say a lot about construction quality, and how well it will hold up going forward.

And if paying $60K+ for a car, I would expect something with amenities of a $60K+ car, not something with terrible ergonomics (touchscreen, right...) and missing features that a $30K Hyundai has.

woodandsteel4• 8 years ago

You know, it is really interesting watching the Musk haters over the years.

The more he succeeds in doing what he promised (albeit usually behind schedule), the more they hate him, and the more convinced they become that his present projects will all turn out to be complete failures.

It almost makes you think they have some ulterior motive, like they work for the fossil fuel industry, of one of the other rocket launch companies, or a major auto manufacturer, or maybe they bet their life savings on Tesla stock crashing.

Any Musk haters out their want to respond? And if you do, be sure to tell us about your past predictions, and if they turned out right or wrong.

saas_co_de4• 8 years ago

yeah, when he crashes and burns it will burn 100 billion dollars and the credibility of the whole tech industry (like Theranos but 100X).

There will be a nuclear winter in tech investment after that which sets back legitimate companies with real innovation by years with lasting damage to the global economy.

Same story as Uber and why people "hated" on them before the adults cleaned things up (as best as possible).

These con artists are shitting in the water for everyone else which has direct financial impact. Not hate, just money.

rich-w-big-ego5• 8 years ago

I think there's something to this argument. Elon actually realizes this part himself:

  when he crashes and burns it will burn 100 billion dollars and the credibility of the whole tech industry

Elon has stated publically that it would be "really bad" (his words) if Tesla fails, because Tesla will then serve as an example of why electric cars will never work, and from that point it will be 10x harder to create an EV startup - to say nothing of the investment crater that's leftover from their death.

However, I don't understand the rest of the comment regarding the "con artists" and how this is at all like Uber.

woodandsteel4• 8 years ago

Let me repeat my question: what have been your past predictions about Musk's projects, and have they been right or wrong.

woodandsteel4• 8 years ago

You know, when the Model 3 came out and terrible production difficulties meant they were producing only 200 cars a month, the Tesla-is-a-scam people told us that the company would never get production much above that.

But actually it has been improving production at a steady rate, and is now at least close to the promised 5,000 a month. So the Tesla-is-a-scam believers were quite wrong.

scarejunba2• 8 years ago

TSLA has been public a long time. The guys who shorted it are losing money. The guys who say it's a scam but don't short it are probably bullshitting.

dlp211• 8 years ago

Or don't believe you can time the market. You can be bearish on a company and still think shorting it would be a disaster. The market can remain irrational longer than you can stay solvent.

ourcat• 8 years ago

Would you trust a car built in a hurry?

Robotbeat4• 8 years ago

7000 cars in a week. 5000 Model 3s.

tardo99• 8 years ago

I wouldn't want to drive a car built in a tent at breakneck pace to prove to investors how fast they could build cars. Not for me.

jiggliemon• 8 years ago

Tesla is still maturing as a company; more to the point, they’re maturing as a manufacturer.

While other companies would order whole componants from vendors - Tesla will only order parts - and assemble in house. For instance - Toyota will order brake assemblies. While Tesla orders guards. Toyota will order a door - and Tesla a door panel. Even worse - Tesla has a history or delivering third parties sub-par China made tooling; and expecting 2-3x performance out of it - when in actuality their sub-par tooling will reduce efficiency. Trying to save money on tool manufacturing isn’t where mature companies cut corners. Trusting vendors to look after their own interests is a good practice (provided those vendors have a proven record)

Eventually Tesla will work it’s way into understanding that it’s core competencies are IP, design, and marketing - and leave the micro manufacturing to third parties.

A 6mo miss in production on one vehicle isn’t a sign of the times for a company with a 10yr road map. The markets aren’t super forgiving, but I think this will all get smoothed out as Tesla grows up.

adventured2• 8 years ago

The markets aren’t super forgiving

Tesla's stock is 40% above its 52 week low and was just near its all-time highs two weeks ago. That's pretty forgiving. Must drive the bears crazy.

Ryudas2• 8 years ago

One thing I don't see people mentioning too much, but tesla numbers are great for electric cars, but they're tiny, tiny compared to something like ford. I don't get why people assume tesla can negotiate similar prices for these things as other manufacturers can. I don't think they can. Who says it's cheaper for tesla to order like the big manufacturers do?

chemmail• 8 years ago

Elon may have did this the wrong way. He should have released the 2020 Roadster first, price it at a lux $500k, beat the snot out of every hypercar out there. Get the Semi out, make actual money, then lose money on every Model 3, but have a subscription service to have monthly income. Kind of how Amazon loses money on the thing people mostly use it for, selling physical stuff, but makes money everywhere else.

rich-w-big-ego5• 8 years ago

Your analysis might make sense if money and profitability and staying solvent was what Elon was most interested in. However, money alone is not the goal; getting us off of oil is the goal. I think that Elon really wanted to make a mass-market car as soon as possible, which explains why he chose to take the harder path of making the mass-market car before the hypercar and the semi's.

bpd10692• 8 years ago

So much insecurity in these comments. Hilarious. I hope you didn't buy into the shorts thesis.

pooya13• 8 years ago

Leave it to CNBC and HN to take such a success story by Tesla and turn it on its head to call it a failure. 1- Emphasizing the 5hr delay as opposed to the almost 5k figure WHEN THEY THEMSELVES SAID A FEW MONTHS AGO THAT TESLA WON'T PRODUCE MORE THAN 2k PER WEEK 2- Accusing Tesla of having low production quality in their tent line without any evidence 3- Criticizing Tesla for not being able to produce performance and dual versions, then when they do criticizing them for selling those before cheaper options when that is what any sane company would do 4- ... Honestly it is baffling to me that you guys keep being proven wrong over and over again, yet you keep insisting that Tesla will fail. If you really believe Tesla is doomed I suggest you start shorting them (and let me know how it works out for you!).

dayaz362• 8 years ago

Not surprised the only sane and accurate comment is grayed out at the bottom of the thread. HN is filled to the brink with anti-tesla shill bots. The astroturfing is so obvious it's comical. That's why I don't ever trust HN comments..

dang2• 8 years ago

The community is obviously divided about this. That's not the same thing as "astroturfing". The guidelines ask you not to insinuate that without evidence, so please don't.

https://news.ycombinator.com/newsguidelines.html

loourr• 8 years ago

This is such a horribly biased and negative article.

chriselles2• 8 years ago

Hitting 5000 Model 3 Units in a single surge week is an anomaly, until it becomes a repeatable and sustainable pattern.

And a pattern that includes low/no rework, because building 5000 units a week is one metric, building 5000 high quality units with no expensive rework is another metric entirely.

Questions:

Why would someone work in a non air conditioned tent under high stress when they could earn the equivalent wage working across the road in an air conditioned McDonalds?

What impact will the major step down in Solar City/Tesla have in commingled Tesla finances?

Why is Bloomberg’s Tesla tracker showing a fast flattening(rather than accelerating) production trend?

Back in 2016 at GSB we were supposed to get 80 minutes with Musk in class, but it turned into possibly the first “sleep at the end of the factory line” narratives.

Am I the only one who things a fancy tent is a modern equivalent of a Potemkin Vilage?

Fast, cheap, good.

Pick one today, maybe two later.

I find Tesla requiring $1000 deposit holders to contribute an additional $2500( for a combined $3500 converted into an advance payment no longer deposit) interesting.

At Amazon in the very early days we had 100% float from publishers for 30-60 days for a 20% gross profit operation.

Tesla’s attempt at the same is 5% float for 3-6 months for a -20% net profit operation.

It’s like using a single dish sponge to absorb a negative cashflow tsunami.

Making stuff is hard. Making stuff at industrial scale is super duper hard.

greglindahl3• 8 years ago

Do you have a source for Tesla assembly line workers being paid the same wage as McDonalds workers?

chriselles2• 8 years ago

Hmmmm....

I couldn’t actually find a McDonald’s that paid the same as the $15 starting rate for Tesla production specialist/hourly as found on Glassdoor.

My bad!

But I did find In ‘n Out Burger that offered the same.

Tesla meets self-imposed deadline for Model 3, rolls out 5000 cars in a week

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