Forums

LA Times just depressed me

LA Times just depressed me

"...In 2016, Musk and Tesla said it planned to produce 500,000 cars of all models by the end of 2018. The company said Wednesday it plans on making 5,000 cars a week “at some point this year” and 10,000 cars a week “at some point next year.” In other words, total production of Models S, X and 3 could range between 260,000 and 520,000 cars in 2018.

If Tesla produces 100,000 Model S and Model X luxury cars in 2018, as it plans to do this year, the low-end estimate leaves 160,000 Model 3s. So more than half of those who put down deposits could be waiting until 2019 or beyond to receive their automobiles."

As I'm a later reservationist, here's to hoping Elon is under-promising and over-delivering.

slasher0016 | 4 mei 2017

LA Times is bad at understanding. Musk said he is going to product 5k Model 3s a week by the end of this year, and 10k Model 3s a week by the end of next year. That's additive to the Models S/X ones.

If Tesla does 100k S/X ... has no factor on the 5-10k per week of Model 3s. So 260k to 520k is ONLY Model 3 production.

KP in NPT | 4 mei 2017

+1 Slasher. That is how I understood it on the call. he is talking separately about the 3.

El Mirio | 4 mei 2017

LA Times had put out some false information about musk companies in the past, careful with that "news" source.

http://insideevs.com/elon-musk-responds-false-la-times-article-suggest-t...

ddrmadness | 4 mei 2017

I'm sorry I've missed something. Where did he specify that the 5K/week and 10K/week figures apply only to the model 3?

Haggy | 4 mei 2017

The LA times might have gotten it wrong. I've seen plenty of sources get it wrong. When Musk said he would achieve that rate by the end of the year, he didn't mean he would produce that many cars that year. He meant that the production rate by then would be what's needed to be able to make 500,000 cars per year. In other words, by the last week of the year they should be able to make more than 9616 cars.

Perhaps they are aware of a statement that actually says what they claim, but I'd take it with a grain of salt.

El Mirio | 4 mei 2017

My fault, LA Times is correct this time, 500k is for all models together

https://electrek.co/2016/05/04/tesla-tsla-surge-model-3-production/

Octagondd | 4 mei 2017

@ddr - in the quarterly report they stated "preparations at our production facilities are on track to support the ramp of Model 3 production to 5,000 vehicles per week at some point in 2017, and to 10,000 vehicles per week at some point in 2018."

If Model S and X keep growing at the same rate they have been growing, they will produce about 150,000 of them in 2018. That leaves 350,000 for Model 3. If they hit 10k/week by week 27 of 2018, then they will easily make their goal of 350,000 Model 3 in 2018 since it will be at least 5k/week for the first 26 weeks and 10k/wk after that.

The shorts are trying to put out as much FUD as possible to keep the stock plummeting so they can recoup some of their losses. Someone at the LA Times is either short on Tesla or does not like the new guy in town succeeding.

Captain_Zap | 4 mei 2017

The LA Times usually isn't Tesla friendly. This isn't the first go-round.

JeffreyR | 4 mei 2017

"Tesla Q4 and full year 2016 Financial Results and Q&A Webcast"
http://ir.tesla.com/eventdetail.cfm?EventID=179732

"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."

Colin Michael Langan - UBS Securities LLC
So, in the next year that you should get to the 5,000 per week, is that right?

Elon Reeve Musk - Tesla, Inc.
Well, I feel pretty confident that we should get there by the end of this year, to 5,000 a week. Now, I do want to separate this from parts orders. I know a number of our suppliers are listening. It's impossible to keep – like nothing is a secret these days, it seems. Yes. It's like major intelligence organizations cannot keep a secret. It's like, really – I don't know who can, honestly. So, when we place parts orders with our suppliers, we've told them 1,000 a week in July, 2,000 a week in August, and 4,000 a week in September. These are parts orders. Then the parts need to arrive. They need to be turned into a car. And the car needs to be delivered to customers.

http://seekingalpha.com/article/404...ranscript?part=single#question-ans...

tigardspaz | 4 mei 2017

I trust insideevs and electrek. If seekingalpha were printed, I wouldn't use it to line a birdcage.

Red Sage ca us | 4 mei 2017

OP: Why would you bother reading Tesla news from that rag?

minervo.florida | 5 mei 2017

I believe 2019 is a good estimate. Major start-ups like this take time for Tesla and suppliers to ramp up.

Just imagine how hard it is to ramp up to 10,000 cars per week for shipping the finished product alone.

Haggy | 11 mei 2017

"If Model S and X keep growing at the same rate they have been growing, they will produce about 150,000 of them in 2018. That leaves 350,000 for Model 3. If they hit 10k/week by week 27 of 2018, then they will easily make their goal of 350,000 Model 3 in 2018 since it will be at least 5k/week for the first 26 weeks and 10k/wk after that."

There are many articles that ignore what Musk says and come up with numbers that don't mean the same thing. 10,000 per week at some point in 2018 does not mean 500,000 per year in 2018. It means 10,000 cars in the final week of 2018 with ongoing capacity at that rate going forward. In other words it means at least 500,000 cars per year for 2019 and later.

Red Sage ca us | 11 mei 2017

Haggy is correct.

SamO | 11 mei 2017

I see people confused by "run rate" and "produce" all the time. The shorts are pretty intent on obfuscating the real data. And then pretending Tesla 'missed" because they didn't produce 500,000 in the year, even though they exited the year producing 10,000/week.

But obviously, their plans haven't worked. I've never seen a company with more integrity or a nose for doing the right thing. Now Tesla definitely doesn't do everything "perfectly" (whatever that means) but they usually get it right eventually.

Three more friends told me this week that they made NEW Model 3 reservations. They don't want to have to wait too long, given that there are no other cars in the same class as Tesla.

Octagondd | 12 mei 2017

@Haggy and Red,
So how do you make 500,000 of all vehicles in 2018 which is what Musk stated in 2016? Yes, he has a right to change that prediction at any time, but I honestly see no reason they can't get to 10k/week by July of 2018. They will be at 3k/week in '18 on X and S and he is thinking he will hit 5k/week on 3 at the end of '17, so what exactly is stopping them from making another 2k/week jump in 27 weeks of 2018?

Red Sage ca us | 12 mei 2017

Octagondd: The point is merely that there are those that purposely misstate Tesla's clear intentions as a means to claim someone has 'lied' or that they have 'missed' or something has been 'delayed', in their opinion, 'yet again'.

Octagondd | 12 mei 2017

ahh, yes, I see that. That is not me. I disagree with Haggy though and believe he can achieve 500,000 vehicles in 2018. Elon's rate statements do give him some wiggle room and that I agree with, but also happened to still agree with his statement in 2016 about producing 500k units.

Haggy | 12 mei 2017

I don't think he ever said Tesla would make 500,000 cars in 2018. He said they would get up to that capacity in 2018. All that means is that at some time in 2018, the factory will be capable of producing 500,000 cars per year. If they produced less than that for part of the year, it would mean ramping up far past that level for the rest of the year. If that were the plan, then that larger number would be what Musk would mention.

SamO | 12 mei 2017

Remember the "S" curve of increased production. A few months make a huge difference.

Octagondd | 12 mei 2017

I think you are correct in that he did not say 500k in 2018, but a rate of 500k in 2018. But, the last quarter report says, "Simultaneously, preparations at our production facilities are on track to support the ramp of Model 3 production to 5,000 vehicles per week at some point in 2017, and to 10,000 vehicles per week at some point in 2018." This is specific to Model 3 so it is not accounting for the 3k/week of Model S and X.

If S and X are at 3k per week at some point this year and can maintain 40-50% growth year over year, then you are seeing minimum 4k/week for those models in 2018. Maybe not, since we don't know what demand will be like, so lets just maintain 3k/week. Then you have the statement above specifically about Model 3 which says 5k/week by the end of this year and 10k/week some time in 2018. Let's assume year's end. Well, we already have 8k/week between Model S, X and 3, so do you think they can manage another 2k/week out of the next 5k/week of expected expansion of Model 3 by July 2018? I certainly would. I realize expansion is not linear and can happen in clumps but I cannot imagine they are going to only stick with 5k/week of Model 3 for more than half the year of Model 3 and then all of a sudden pop in another 5k/week.

All this being said, I do agree and understand your point that Musk and Tesla did not say 500k in 2018, but they did say a rate of 500k in 2018. I just happen to think they will hit 500k in 2018 and possibly surpass it based on the numbers they are projecting currently for the Model 3 ramp rate and the year over year growth of Model S/X.

Red Sage ca us | 12 mei 2017

Octagondd: That's what I thought you meant. I remember Elon's statement having quite a bit more than just 'wiggle room', with multiple qualifiers and necessary parameters for leeway as an allowable margin of variance. Remember I am the resident Friendly Neighborhood Over-the-Top Optimistic Tesla Certified Apologist Fanboy and stuff. Hence, I agree with both Haggy (about the motivations of Naysayers), and you (about the possibility that Tesla can pull it off anyway). ;-)

EinSV | 13 mei 2017

Tesla has made statements in the past that arguably could be read to predict either a 500,000 vehicle run rate by the end of 2018 or 500,000 vehicles produced in 2018, but I think it is now clear that the plan is to build 500,000 vehicles in 2018.

For example, the recent Q1 10Q states:

"We plan to build 500,000 vehicles in 2018." (page 31)
"We are planning to produce 500,000 total vehicles in 2018." (page 36)

IMO, those statements seem to make it pretty darn clear that the plan is to build 500,000 vehicles in 2018, not just hit a 500,000 vehicle run rate by the end of the year. So if Tesla is able to meet its targets there is a good chance that people toward the "back of the line" will get their Model 3s sooner than they think!

SamO | 13 mei 2017

I agree that the plan is to build 500,000 vehicles in 2018, but that is based upon a certain amount of uncertainty given the S curve of deliveries.

Elon Reeve Musk - Tesla Motors, Inc.

Yeah, the trick is that when you got a whole new product and a whole new factory, trying to predict exactly what that initial S-curve, the initial portion of the S-curve looks like is extremely difficult. Inevitably, the production starts off slowly and then you gradually eliminate the constraints and eventually it starts taking off exponentially. But because of that, sort of initial slow ramp that then grows exponentially, a small change in where that lands in the quarter can have quite a big impact on total volume. It's a lot easier to predict where the upper flat portion of the S-curve is likely to be, but predicting the rapidly changing portions of the S-curve is I think not within the ability of anyone to predict with accuracy.

https://seekingalpha.com/article/4068889-tesla-tsla-q1-2017-results-earn...

Iwantmy3 | 15 mei 2017

I think there has been a certain amount of confusion due to the 500,000 number being used in different ways at different times. I understood that Tesla is targeting 500,000 cars (total S, X, and 3) in 2018 while also targeting a 500,000 car run rate for model 3's by the end of 2018.

Haggy | 15 mei 2017

Assuming no bottlenecks from overlapping production areas, then I'd expect the Model S/X total production to grow past 100,000 cars for 2018. The more bullish you are on that rate, the less you'd have to be for the Model 3 total to get to 500,000 per year.

The paint shop was upgraded long ago to handle 500,000 cars per year. Tesla can stamp out body parts faster than they can use them. The biggest production hold ups with current vehicles has to do with people time. It will come down to how much more Tesla can automate with the Model 3.

Red Sage ca us | 18 mei 2017

I have forecast as much as 120,000 to 150,000 of the Model S and Model X as combined annual Sales for some time. I currently think it is more like a pace of 80,000 to 100,000 or so Deliveries as a combined total worldwide. I actually expected the Model X to be quite a bit more popular than it seems to be, but there is still time for it to catch on, selling through at higher rates, I think.

What's harder to guess at is territorial distribution between the two cars. The Model S has typically hovered at about 45% to 50% U.S. Sales. I would expect Model X would be more like 55% to 60% in the U.S., but I have no data to back up that premise.

If both were manufactured at about 60,000 units per year, that would end up with about 27,000 to 30,000 of Model S sold in the U.S., and maybe 33,000 to 36,000 of Model X. So, 60,000 to 63,000 of them sold here together in 2017. If a similar quantity of Model ☰ can be moved into the hands of new U.S. owners this year, that will make for a very nice showing.