Tesla Q2 Deliveries


#21

Tesla is a religon and the believers will believe anything Musk says…like Lexa and the hyperloop. …If Musk says it will happen then it will happen. .common sense be damned…Same with the global warming group, the anti nuke group or the Trumpsters…truth is not even an issue. …


#22

I still have very reliable sources in the supplier community from my days as a sell-side auto/auto parts analyst and those sources are telling me that Tesla is currently nowhere near that 5,000/week run-rate on Model 3 production. It is the last day of November and the chances of Tesla achieving the linespeed necessary to reach a 5,000/week cadence on the Model 3 by year-end are near zero.

https://www.forbes.com/sites/jimcollins/2017/11/30/teslas-production-problems-are-the-companys-achilles-heel/#1c5eb42671a2


#23

I question how the line is going “too fast”. That screams poor process design. Most car companies can make 500,000 cars a year off a single line. Tesla can’t even do 100,000. I was on a car launch that rolled a car off the line every 77 seconds. Every process gets bench marked and needs to be completed in <50% of that time. Any longer and the line operators can’t maintain the pace of the line over a full shift. They clearly don’t understand the basics of car manufacturing. What’s more shocking is they haven’t hired anyone to fix it.


#24

Exactly. I understand it’s complicated, but it’s being done by every car company in the world.

So what is unique that Tesla is doing that is preventing them to at least match(if not surpass) what other car companies are achieving?


#25

Are all car lines the same or are they designed for a specific throughput rate?


#26

I’m not sure how all the car companies do it. Most factories I was in were pretty old, so they were designed decades ago before a lot of the modern manufacturing techniques. We knew the cost per hour of running the factory. We knew the cost of all the raw materials and parts that go into the car. It’s pretty easy to calculate the line rate required to be profitable. That turns into each team’s time goal for adding their parts to the vehicle. By the time we got to PVT, we would built the cars on the actual line mixed in with the existing model. Every 5-10 cars would be a prototype. At that point, you better be ready to go at line rate, because no one wants to be the person to cause the line to stop.

I know Toyota uses the same manufacturing process for every vehicle. They design all vehicles, so they are built in the same order. That’s why they can build a truck, SUV, and car on the same assembly line. It’s pretty amazing. Their US factories are pretty new, so they take full advantage of the modern approach to manufacturing. Honda does the same.

Most people are doing the same thing to increase line rate and reduce costs. They are pushing suppliers to provide modules vs components. That way the sub assembly labor is in a non-UAW factory. They used to assembly the dash in the auto factory. Now they come in fully assembled. Production is planned enough in advance they come in exact order for the assembly line. The operator verifies the dash and body match by scanning a bar code on both.


#27

Tesla should just sell to someone who actually knows how to run an assembly line… Ford in 1920 could do a better job than rusty Musky…


#28

How so? Has Apple delivered one single car in more than 40 years of its existance?


#29

Isn’t that the Amazon model? That company has not been profitable for almost 20 years…


#30

Sound like Steve Balmer’s comment on iPhone launch.


#31

Don’t let your biggest holding blind you and make your emotions irrational. Although Apple is also my biggest holding, I’m much more realistic about what it can and can’t do. I don’t for one second hold on to Apple because I think it can produce an iCar in the future.


#32

When does Amazon issue more shares or debt to fund capital expenses? Amazon is able to fund it’s own capital expenditures from operating cash flows. That’s why profits are low, but Amazon has been profitable since Q4’14. Tesla is constantly raising more cash, because they can’t fund themselves. There’s literally zero path for profitability with the 15% gross margin they are projecting. The R&D and SG&A expenses are too high, and they are growing almost as fast as revenue. You add the extra interest from more debt they’ll need to scale, and there’s no path to profits.


#33

From 1996 to 2014. That was 18 years after they’ve gone public for profitability. How long has Tsla been a publicly traded company? Give it some time…


#34

How many times did Amazon issue more stock or debt?


#35

Does not make a difference. Every company is unique in its own way… no single path to profitability.


#36

There is no path for Tesla at 15% gross margin. The math literally doesn’t work unless they fire all the engineers and stop developing new products.


#37

Then they might ended up getting acquired by Apple for $100 billion because it badly needed an electric car. Again, many paths to success… profitability is just one of them.


#38

Now you’re just hoping for luck.


#39

Isn’t that the premise of all investors? If you are a pessimist, then a meteor will strike Earth in 6 months and we’re all going to die, so there’s no point in investing and I can spend my last 6 months blowing away my entire fortune… wouldn’t that be fun! :rofl:

Also, this is not just “luck”. There are many people working very hard everyday to make sure Tesla becomes a success. I’m just entrusting their ability while enjoying the fruits of their labor so what’s wrong with that? :wink:


#40

I think there are companies that better deserve that sort of optimism, because they are executing as promised. Tesla has failed to meet vehicle deliveries every quarter except one. Why should I believe anything they tell us? I’d prefer a company that’s consistently met or exceeded their goals.

It’s a bit like if someone keeps cheating on you, and you keep believing that they are going stop doing it.