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Elons Q1 Earnings Q&A MX related answers

Elons Q1 Earnings Q&A MX related answers

I have transcribed Elons words related to Model X from todays Q&A http://ir.teslamotors.com/events.cfm (webcast link)

Elon said….

“Model X production increased by a factor of five from Q4 to Q1 and we continue to make huge strides in volume and quality of the vehicle.”

“I am personally spending an enormous amount of time on the production line. My desk is at the end of the production line. I have a sleeping bag in a conference room adjacent to the production line, which I use quite frequently.”

“I suspect by the end of this quarter most of my time will not be spent on the factory floor.”

“I feel confident that we are going to hit the 2000 vehicle a week target by the end of this quarter of which on the order of 40% are X”

“We have some internal milestones that we have achieved thus far that I am pretty excited about. Friday at 3 am we achieved our first flawless production of the Model X where it went through the whole production process and had zero issues, that was a great milestone, celebrating with the team at 3 am on Friday was great and now we are starting to get several in a row that are flawless, so it’s really gaining momentum very quickly.”

“As for convincing all the naysayers, I think that will basically be never.”

I like #2, good imagery there, and I give him credit, the man is trying to get our X’s to us

#5 is interesting, I hope mine comes out flawless

gatordent | May 5, 2016

Elon is a good example of a dedicated CEO, to make a comment about celebrating a flawless X coming off the line at 3am was for the team to hear not the investors. Great job all of you at Tesla keep it up!

Gayatrikr | May 5, 2016

What a guy a fitting heir /reincarnation of steve jobs apple shud buy tesla and make him the ceo of the empire a fitting tribute to the grtst -steve jobs

DarthB | May 5, 2016

Great to hear. I hope newer Model Xs delivered will have zero issues. Mine (VIN 22xx) has been great so far but still has some cosmetic stuff that SC is fixing--silver lining if you haven't picked up your vehicle yet!

dortor | May 5, 2016

so far every quarter has been the "quarter" in which they have finally "fixed" the X production issues…

LOL - the 1st X without defects was last Friday - ridiculous - remember when Elon lied and said they were starting production in Sept. of 2015 - hello - it's May 2016…

I'm gratified that nearly 3 years and 6 months after they started to over designing this car they feel they can finally make at least one that is defect free - this is a really really low standard to shoot for - but just because they can now manufacture to match design does not address the DESIGN flaws present in this vehicle (doors, FWD, 2nd row folding seats, buggy software)

and there is still a lack of parts and transparency from the company…

congrats to Tesla/Elon on the progress so far - but this is not how successful companies run - at least 4 times in a row now they have announced products way way way before they were actually able to deliver them (roadster, S, X, Powerball) so the track record is not good

and when the discussion last year about this car being a nightmare to produce and how it would affect the company - the fan boys in the forums dismissed all foreseeable outcomes (i.e. they still are not and have not delivered any quantities that matter of this vehicle) we were told it was no problem and it would be fine...

well if this is fine it's a very very low standard.

I look forward to the next quarterly phone call where Elon is either:

a) trying to explain once again they have the production issues worked out (we've heard that before)
b) demand for X isn't as bad and people think it is and it's not because of delivery problems, defects, or design flaws...

either way this ride isn't over yet and Tesla so far with the X has failed to impress.

rhartson | May 5, 2016

if you loathe the company so much, why participate here?....I dont understand why this stuff is necessary...it helps no one except you I suppose.....the company and Elon deserve enormous credit for trying to move our ossified,fossil fuel dependent economy forward...yes there have been issues, as they are creating something wholly new; thats to be expected...if you want to dump on that, I suppose that's your choice- but assuming others want to hear it is a leap...yes, people can gripe that they paid "good money" etc-but this is was always about pushing boundries and technology, and early adopters should accept that or not get involved...I for one applaud the man for his boldness, and choose to support the endeavor.....if that makes me a fanboy-the popular dismissive term here-then so be it. I just fail to understand why anyone would get involved without a clear understanding of the risks...its a lot of money-yes-more than any of the several Merc's I've had-and I didnt take the expense lightly-but the company from what I've seen is making good faith efforts to address the issues....if you see everything thru a biased lens then you'll see what you want to see....of course dont know why I'm bothering with any of this b/c no minds will be changed...personally my experience with our Model S has been stellar and informs my views going forward....

vperl | May 5, 2016

Be Happy.

I am

DarthB | May 5, 2016

Understand some people's frustrations. Before I got my car, I come to this forum almost everyday to rant. It was my daily therapy session.

What can I say, things will be alright lol.

darlin | May 5, 2016

@rhartson +100

elguapo | May 5, 2016

One thing to add - delivering flawless cars is awesome and critical. I would also like flawless updates that don't make it difficult to unlock my car and "break" functions. Lots for TM to focus on.

I do love my X though.

lilbean | May 5, 2016

Enjoy your freedom without the car for now. Once you get it, it will be all you think about. I was actually relieved when it was at the SC. I got a break from all the attention.

carlk | May 5, 2016

@rhartson

dorter is jealous at Tesla, at the X or at us. He's hoping everything will fail and is super unhappy that it did not. Poor guy.

Ankit Mishra | May 5, 2016

@dortor
You might have certain issues with Tesla. Reflect on the reasons why Tesla makes you so shaken. Don't be desperate, accept being wrong with grace.

dortor | May 5, 2016

what am I wrong about Ankit - you were stating the X was fine and that they would be fully producing them back in December - to date - according to Elon they have only produced "one" flawless car after almost 7 months of trying - that means all the other ones have/had significant issues

Sept. 2015 - X is ready to produce - these are the first 5 we'll be ramping by the end of the year and Deliver all Sig's before year end
Q4 earning's call - Elon - I'm confident X production will ramp this next quarter - we finally worked everything out
Q1 earning's call - Elon - we just produced our first actual X without an QC issues - we're so proud it took 7 months - next quarter - you'll see - we'll make a ton of them...

successful companies don't design products that can't be produced.

socalsam | May 5, 2016

Thread of the month in the making right here...

Anyone got any popcorn? Should be epic to watch this trainwreck. :)

jeffpoel | May 5, 2016

from what I understand, dortor doesn't own a Tesla and probably can't afford one. His negativity stems from jealousy and financial inadequacy, thus all the negative comments. Get a life, son. I love my new X. You wish you had one.

carlk | May 5, 2016

Yes what does he care about how the car is? dortor has never had the intention nor probably means to buy an X yet he's been posting one negative opinion after another since even before anyone who had put hands on one. And he even has the nerve to argue with real owners who all say they love this car. What a pathatic jerk.

Ankit Mishra | May 5, 2016

@socalsam
You are the master of thread disasters here. If you say so, it must be true.

socalsam | May 5, 2016

Ankit- is there a reason you feel it's ok to hurl insults towards me?

lilbean | May 5, 2016

The 2nd forum topic entitled "Please Read First Before Posting On The Forums" asks that participants please by respectful of others.

sKaz | May 5, 2016

I am sad that a very nice post by @jestah has turned sour so quickly. +1

I wonder exactly what quarterly report would have made @dortor happy?

Would you like to see...

Vehicle quality is declining and TM is unable to produce flawless MX?
Elon is uninterested and spending all his time on vacation or over at Space X?
TM has met ZERO milestones that they set for themselves?
TM financials were below wall street expectations?

/sigh

Ankit Mishra | May 5, 2016

@socalsam
What insults? And why did you implied that the thread is going to go off rails after I replied to @dortor and he replied back? If I try to be pathogenic about civility, I can take that as insult too.
You regularly make threads in which you express you frustration. They get very noisy and also toxic sometimes. I refer to them lightheartedly as disasters (in counter to your comment, our views differ a lot and hence rational discussion is a waste of time for us both IMHO).

socalsam | May 5, 2016

Good lord- why are you dragging me into this? Dortor is the one that started the thread. Not me. You ask for others to treat you with respect when you post yet for some reason you are antagonizing me.

Go away please. I'm enjoying my wait for my June delivery in peace. Serenity now! Serenity now!

Big T | May 5, 2016

The use of the word "flawless" by Elon is not properly understood. What he means is that there is literally nothing wrong with the vehicle. A flaw can be something that a customer would not even notice but doesn't meet the company's high standards as set by Elon.

sp_tesla | May 5, 2016

socalsam | May 5, 2016 Vs Ankit Mishra | May 5, 2016

Human common sense Vs robot AI

Ankit Mishra | May 5, 2016

@BigT
In my opinion- production line was messing Model Xs until now due to complex nature of car. Tesla spend a lot of time to deal with problems after and hence it caused slow delivery rate. Now, production line is making Model Xs in such a way that they don't need to be worked on afterwards.

Ankit Mishra | May 5, 2016

@sp_Tesla
Go search for threads complaining about Tesla. Not much complaints on this side today. You are welcome.

Dcp9142 | May 5, 2016

Getting the production line, which is highly automated, to produce the car without anything that requires rework is indeed an achievement. It lowers cost and improves time to delivery. B cause of the automation, that can become rapidly the repeatable standard. But many car makers deal with defects after end of line, that is why there are post line inspections. The bad old days, before the Chrysler bankruptcy, the Chrysler plant had many acres of cars waiting for remediation before they could be delivered.

georgehawley.fl.us | May 5, 2016

One way to look at it is that Elon isn't try to cover up.

1. Complex car to build.
2. Hubris led to overcomplicated design
3. CEO sits at end of production line to monitor results

Let anyone out there who has never made a mistake step forward.
The mistakes made at Tesla have been painfully obvious. The joys of driving cars after the mistakes have been corrected have been equally obvious. As long as they admit their mistakes and learn from them and as long as they ultimately turn out sensational products, they will be OK. Otherwise....

georgehawley.fl.us | May 5, 2016

Trying that is

Gary an Rachel | May 5, 2016

rhartson, thank you for posting your message. I feel your just wasting your time even reading what is typed at this point. Once I see the names of the posters I just skip to the next. I myself have to laugh at them. When I first put my money down to reserve a car I was 17654 or near that number. I kind of felt that at least by then I would have a solid car so I tried to use that to help with the waiting. Well to my surprise I found when we were able to design our car I had nothing to think over. I filled it out and sent it right back to tesla. I was super happy to then find I jumped almost to the front of the line and became 677 of the production line. Since March 24th we have been driving and loving every mile of our flawless P90DL with all options. The best part is not having to read all this BS everyday like while I was waiting and to be clear Those "special" posters did not help one bit in that process. Freedom of speach does not mean you should exercise it. But they are not really thinking about others now ate they and maybe, just maybe if they have received their car yet that maybe, just maybe it's because of what They are saying. This really could be a really nice forum for real car owners to learn and help grow a company to historic success. They really should just keep driving a Ford or Chevy unless they are preaus lovers. Sorry, it just so old and I needed to post. I think a nice drive to the coast for some beer and seafood in the X is in order. Loving every mile. Thanks to everyone who let me go to the front of the line. It feels like winning the lottery.

NumberOne | May 5, 2016

@rhartson +100 order of magnitude.

@ anyone and everyone People are misinterpreting Elon's comment. The Model Xs produced prior to the 'flawless' one that came off the production line were not flawed, but still needed some adjustments. The one car that Elon is referring to needed no adjustments. More an more cars will be produced without the need for tweeking, thereby reducing production time and increasing the likely hood of producing up 900 more Model Xs each week.

AlMc | May 5, 2016

I enjoyed the ERCC. I would really like to see TM/EM meet those ambitious plans, on time and with decent cost controls.
Wheeler seems to have really tightened up the cash use

I still would like to se a COO in charge of operations where he/she is responsible for the design/manufacturing/supply train working seamlessly together. I think it best if EM has to split his time between a couple companies and 'life' that he focus on the vision/direction while someone with large scale automotive production be the COO.

Aside: Just asking a simple question: If one puts a +infinity to acknowledge someone else's posts is that better than +1 or +100 or simply just saying 'I agree'? Maybe +1 ramps to +100, then + infinity? j/k ;)

AlMc | May 5, 2016

PS: I thought we had all reached a 'group hug' moment the other day....Did not last long :)

socalsam | May 5, 2016

How about anothe call for a group hug? We can all participate in our festivus activities together later this year.

jestah | May 6, 2016

Well cheers to the 98% positivity on this thread, I categorize posters as either owners, “wait”ers or haters. I tend to ignore the latter.

It took me a fair amount of time to record the call and accurately transcribe word for word- I find value in the CEOs words spoken during a call and it sounded sincere and truthful.

I appreciate a multibillionaire in a sleeping bag in the factory seeing his vision through.

A flawless production involving 8000+ unique parts is better late than never, and the subsequent ‘several in row’ that were flawless means eventually likely hundreds in a row, which means us wait’ers will get our X’s sooner rather than later and they will be, um, flawless.

Thank you to the owners who report their satisfaction (or issues) so we can drive vicariously (and trust tsla fixes the issues by the time ours deliver).

And so we wait…

As for the haters, read Elons last quote, never is a long time- good luck with that.

rhartson | May 6, 2016

@sam...Im in...sounds fun...I think this post has been largely positive BTW...good talk friends....

vperl | May 6, 2016

- ~ on group hug.

jjs | May 6, 2016

Come on @vperl, group hug, be happy. :)

socalsam | May 6, 2016

I think the big picture is that everyone here (I assume) wants Teslas big mission to succeed. We all want to give a big middle finger to the Middle East and their oil. We all want electric mobility to become a reality for the masses and for that Elon and team should be applauded.

However the Hail Marys that Tesla keeps throwing out becomes a bit frustrating when they can even do the basics like block and tackle. Increasing the goal to 500k vehicles by 2 years to 2018 instead of 2020 sounds great but when you are a reservation holder and they can't even get 3000 vehicles out the door in 8 months it becomes hard to believe they will do 500k, 10x last years volume in about a year and a half.

I hope they succeed. But listening to these conference calls and Elons rhetoric just makes me roll your eyes. Considering how he stock tanked over 11 points yesterday, the market doesn't believe him as well. They have never hit Their numbers- ever. The cynic in me thinks that Elon is just saying these imlososble deadlines just so he can go out and raise cash which is something on the last quarterly call he said they won't do. And so much for being cash flow positive this year.

I write this not as a hater by any means so if you want to attack this post- go waste your time elsewhere. I think it's dangerous for the company to make unrealistic goals and expectations. I'm a fan of tesla long term so I'm all for the Hail Mary but I just wish they could do their basic blocking and tackling first.

dortor | May 6, 2016

ahhhh - yes - you know you're making progress when other forum users resort to personal attack - "pathetic jerk" - hmmm nothing to do with the X

I'm just completely stunned to watch everyone jump up and down with Joy at Tesla's enormously flawed execution and think that this is a standard to aspire to…i understand you are all blinded by the light fan boys - buy please take a step back and seriously consider if you would tolerate this sort of roll out - missed deadlines, outright lies about production abilities from _ANY_ other company you choose to do business with - particularly for a premium priced product because the X is NOT cheap and cost more than homes in most areas of the US…

I just guess my standards are higher - and despite carlk's accusations I do not WANT to make X owners feel bad about their purchase - but the X is not the perfect car and has some very foreseeable design flaws that certain customers are choosing to overlook - we will never have any data however on if/how/when/why those design flaws have made the X slightly less successful than it could've been and that conversation is academic

as far as a CEO sleeping on the line to make sure production gets ramped up - that is both good and bad - completely and 100% necessary given what a design screw up the X was - and it required Elon's personal attention to make it work in production - again this is not the sort of standard you want to shoot for in building successful and sustainable companies. Kudos to Elon for his personal dedication - no question - shame on Elon for not building a functional and healthy company that an anticipate and avoid problems and still meet their commitments.

I know I'm not going to change any minds on this forum - but I refuse to let you all off the hook. Glad you're happy with your X's - but are you happy with how Tesla handles their customers, their products, their public commitments and their employee's (I know a TON of former Tesla employees in the bay area and they all say to a person Tesla is hell to work for because Elon won't let them solve problems they see are coming and avoid unfortunate outcomes)…but again I can't attack the cult of Elon on this forum.

So I guess you guys all win - the X roll out has been a fantastic success, there were no foreseeable screw ups, and it's a standard that all companies should aspire to when rolling out new and revolutionary products, all company CEO should sleep on the factory floor in order to personally attend to design/manufacturing that were avoidable in the design phase because that is in fact the best use of their time. You all have convinced me. Tesla is the model company of the future - I look forward to my next cell phone from apple/samsung to be delayed for 3 years and have problems dialing number's with 7's in them because they are solar powered and that forgives all the other screw ups. And my washing machine with FWD's that can't be delivered for 7 months after the start of production - it's great I'll just let the laundry pile up. Because no other company in the world executes better than Tesla - you are all right to question my motives and we do not want Tesla to execute better, what they are doing is just fine - and given their track record based on the 4 products they are currently producing the Model 3 roll out is going to be AWESOME…grab your popcorn and wait to tell dortor I told you so the 3 rollout will be a glorious demonstration of world class company efficiency - once Elon starts sleeping on the factory floor again…

you've all won - but it's really the pathetic Jerk comment that finally made me see the light - I'm not worthy and Tesla is flawless.

Ankit Mishra | May 6, 2016

@dortor
Hey man, why are playing both sides of the game by yourself? You are doubting Tesla as usual and then countering your naysaying yourself. Is this some new special move that you have developed?

dortor | May 6, 2016

@Ankit - it's just the internal mental thrash I'm going through as you all show me the error of my ways - once you let Tesla's perfection wash over you and through you all will be well and we will be one with Elon.

Ankit Mishra | May 6, 2016

@dortor
Things might be good enough for you, but they might not be for others. I am excited about Model X because it will challenge the basic definitions of car making. It's about questioning things so that better things can be made. I think you are bothered mostly about the attempt to challenge reality (of cars) as we know.

AlMc | May 6, 2016

@dortor: Don't go away or change your views. I liked the ER/CC but being a cautious bull I, and it would appear many over in the TMC investor's section (as well as analysts), are having a hard time believing that the guidance given can be accomplished ****in the time frame****EM put forth.

So, how does one invest based on the recent projections. If you are a bear you see that EM/TM has missed guidance fairly consistently over the last two years and this is one reason why the SP of TSLA has been a bit range bound over that period and point to the X ramp/QC issues as being a cap drain.
If you are a bull you believe that the worst of the X issues is behind us and that the model 3 will be easier to build and therefor you believe EM's projections.

If you are somewhere in between (cautious bull)..You believe that EM/TM will get there..just not in the time frame that was given. 100-200k 3s produced by the end of 2017 is VERY aggressive. My own belief is that 50K would be great.....but that represents another guidance miss.

Even the most ardent supporters I believe would agree that the X rollout has not been as smooth as promised/expected. IMO, and acknowledged by EM in several ways: 'most difficult car to build', 'probably should not have been built' and delayed because of 'hubris' the X 1.0 should have had more collusion by the development team, the suppliers and the production team. IMO, the designing team designed an incredible vehicle then said 'make it so' to the suppliers and production team. This led to the bulk of the production and QC issues. EM has learned from that situation IMO as evidenced that at the CC he has said there will be more interaction with those three groups on the model 3 to make it the easiest to manufacture. So, while the design team 'drove the bus' on the X, the manufacturing team will 'drive the bus' on the '3'.

Let us hope that EMs being present on the factory floor will not only help morale but has led to fewer QC issues and an increase in the numbers produced.

TonyInNH | May 6, 2016

I've been following the forums for a while and can attest to the fact dortor has always been supportive of Tesla. Nothing he has ever said about the Tesla was false. The truth hurts, the X is over-engineered to the point Elon, himself, even hinted at it. While the delays may have been unavoidable nothing excuses the false promises. What's the saying 'Fool me once shame on you, fool me twice shame on me'. Tesla has yet to meet one deadline, the "event" in September was a token event at best to please shareholders, it was months before any real production took place. Production was supposed to going full bore months ago and only now does Tesla claim to have a flawless run. Meanwhile Tesla claims to have new orders out next month despite their mammoth backlog and people like me are forced to wait longer and longer as more and more people order the 90s with 6 or 7 seats.

I've supported Tesla and have been following them from the beginning, but at the moment there are only two excuses for the poor communication.
1. Elon, despite being the CEO, has no clue as to what's going on in his own business
2. He's trying to keep cash flowin' and shareholders happy by constantly stringing people along little by little

I think '2' is the most likely case and while it's good in the sense that at least he knows what he's doing, it doesn't make me want to believe anything he or Tesla in general states regarding the progress in production or quality of the X.

Ankit Mishra | May 6, 2016

@TonyInNH
"The truth", " Fooled ", " Forced ", " Elon- towering figure who is wrong ", " pyramid scheme ", " rebel/resistance ". Wow. You have got good hooks for a novel here.

TonyInNH | May 6, 2016

Was any of that supposed to be comprehensible?

AlMc | May 6, 2016

@Tony: I would also agree that @dortor has been a supporter of the TM mission statement, as have you and I. I believe 99% of the people that have participated on the X forums on a regular basis support the mission statement.

It all boils down to a familiar issue: The style in which you support TM.

Do you voice support no matter what because you can overlook *misses/mistakes* because you feel that gets you to the mission statement completion faster.....

OR do you offer criticism (hopefully constructive) when there is a *miss/mistake* because we all know that these threads are watched by TM so that they get feedback that might help them *fix* those issues (or avoid similar situations leading to 'issues' in the future) so future buyers don't have to experience those issues..thereby getting you to mission statement completion.

sp_tesla | May 6, 2016

"AlMc | May 6, 2016
1)Do you voice support no matter what because you can overlook *misses/mistakes* because you feel that gets you to the mission statement completion faster....."

#1 Sound like a religious cult.

"2) OR do you offer criticism (hopefully constructive) when there is a *miss/mistake* because we all know that these threads are watched by TM so that they get feedback that might help them *fix* those issues (or avoid similar situations leading to 'issues' in the future) so future buyers don't have to experience those issues..thereby getting you to mission statement completion."

#2 Well said, it's will also help current owners especially with fixing/resolving the pathetic & very annoying long lead time of parts & lack of priority of utilizing existing reliable supply chain.

Ankit Mishra | May 6, 2016

Wow. Those Falcon Wing Doors are really the 2nd disrupting feature of Tesla after the fact that it's electric. It really ticks off some people in the same way being electric messes up petrol heads/ICE lovers.

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