Conference Call Comments From Musk On Tesla Model 3 – Video/Listen

Tesla CEO Elon Musk

AUG 6 2017 BY ERIC LOVEDAY 13

What an electrifying week it’s been.

There was the Tesla Model 3 reveal, July sales reporting and then Tesla’s Q2 2017 financial report.

It’s been so hectic in the EV world that we’re still trying to wrap our heads around all that went down in the past 10 days or so.

We certainly don’t want to overlook the Model 3-related comments made by Musk during the conference call that followed the Q2 report though.

So here they are (via Seeking Alpha).  Also, the full conference call (minus the first ~2 minutes can be found below if anyone cares to listen to the hour+ Tesla/investor chat).

On the production front for the Model 3, Musk responded to various questions. Here are those comments:

“But what people should absolutely have zero concern about is that Tesla will achieve a 10,000 unit production week by the end of next year.”

“So, if you can sort of see where we came from, the Roadster – we were making only 600 units a week where the non-powertrain portion of the car was made by Lotus. And we did the powertrain and final assembly of the car, and then we went from that to 20,000 units a year of the Model S, a far more complex car, where we did the whole thing. And then with Model 3, we are more vertically integrated. I think people should really not have any concerns that we will reach that outcome from a production rate.”

Moving on to reservations and cancellations, Musk stated:

“So, let’s see, Model 3 net orders are – there’s not that many cancellations – about 1,800 a day. I want to emphasize you can’t see the car, unless you want to look at pictures online. You can’t test drive a car. You have to put down a $1,000 deposit.”

“I don’t think it really has much materiality, but I did misspeak at the Journalist Review on Friday. I had said that there were 500,000 net reservations. I did also say that I wasn’t sure because I don’t follow this number, and this was just a guess. And so we did check to get some precision on this.”

“So to be more accurate, there have been 518,000 gross reservations for 3, and we have 455,000 net reservations. But those cancellations occurred over the course of more than a year. The net gain since Friday, net of cancellations, has been over 1,800 per day.”

Last but not least, Musk again kinda down sold the Model 3, stating:

“But I just didn’t want to leave people with the wrong impression. I think this is inconsequential because with a small amount of effort we could easily drive the Model 3 reservation number to something much higher, but there’s no point. It’s like if you’re a restaurant and you’re serving hamburgers and there’s an hour and a half wait for the hamburger, do you really want to encourage more people to come order hamburgers? It doesn’t make sense. So I think it’s neither here nor there, but I wanted to make sure there was not a misunderstanding.”

And that’s a wrap.

Video (below): Here is the full (well, almost) Tesla Q2 2017 conference call:

Source: Seeking Alpha

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13 Comments on "Conference Call Comments From Musk On Tesla Model 3 – Video/Listen"

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Pushmi-Pullyu

@Staff:

Your “Source: Seeking Alpha” link goes to page 11 of 17.

Link to single-page view is below:

https://seekingalpha.com/article/4094115-tesla-tsla-q2-2017-results-earnings-call-transcript?part=single

I for one sincerely appreciate the link to the transcript, because for me it’s far, far faster to read it than to listen to it.

Thanks! 🙂

Unplugged

Thank you, Pushmi for the link.

George Bower

I’m not sure it got much press but I ran across some interesting info form Tesla about ease of manufacturing on the Model 3.

Going from memory but it was something like:

The number of sub assemblies (or parts) that get put together during production have been reduced from around 1500 to 100. ….a pretty impressive number.

Robert Weekley

Per “So, if you can sort of see where we came from, the Roadster – we were making only 600 units a week where the non-powertrain portion of the car was made by Lotus…” As to that number: “600 units a week”, I am sure, either Elon mixed up Weeks wthe Years, or the Author of this story mixed up the quote!

Since they sold about 2,500 Roadsters from 2008 to 2012, that is just over 600 per year!

So, going from 600 finished cars per year, to some 73,000 or so, from 2008 to 2016, is still quite a growth percentage! Plus, the not mentioned Tesla Model X, a very hard car for them to finish and build, almost at 50,000 units for this year or more, Plus the Model S!

This year, if they only built 94,000 Model S and Model X, that would be 156X the Yearly output of the Tesla Roadster, or 156 years worth of production, at the rate they built those at!

At 5.5X 94,000 cars, that would be 517,000 cars, and some consider Tesla Won’t be able to get to 5.5X thier current rate, in 14-15 Months??

Pushmi-Pullyu

Yeah, I noticed that too. At 600 Roadsters per week, they would have finished total production (~2450-2500) in precisely one month (29-30 days)! Obviously incorrect.

Well, to quote science fiction author Larry Niven: “We all talk first draft.” 😉

terminaltrip421

and 600 a week comes to 31k vehicles, so going from that to 20k models ‘s’ a year wouldn’t seem like much of a brag — added complication or not.

kubel

“We aspire to be less dumb over time”

This Elon guy… XD

speculawyer
I love this section on battery technology: Rod Lache – Deutsche Bank Securities, Inc. [snip] And, secondly, there’ve been a fair number of battery announcements, solid-state battery technology, Toyota, and a few others. Elon Reeve Musk – Tesla, Inc. Oh, man. Rod Lache – Deutsche Bank Securities, Inc. What’s your general assessment? Are we getting close to some kind of breakthroughs here? Elon Reeve Musk – Tesla, Inc. Oh, god. Rod Lache – Deutsche Bank Securities, Inc. Or what’s your thoughts? Elon Reeve Musk – Tesla, Inc. Okay. Here’s my opinion. The battery breakthrough of the week, battery breakthrough du jour. When somebody has like some great claim that they’ve got this awesome battery, you know what, send us a sample. Or if you don’t trust us, send it to an independent lab, where the parameters can be verified. Otherwise, STFU. Yes. So everything works on PowerPoint. You know, I could give you a PowerPoint presentation about teleportation to the Andromeda Galaxy. That doesn’t mean it works. So Tesla is the biggest buyer of lithium ion batteries on earth. You know who people come to first when they’ve got a lithium ion battery? Us, because we’re their biggest customer. I… Read more »
FISHEV
“So to be more accurate, there have been 518,000 gross reservations for 3, and we have 455,000 net reservations. But those cancellations occurred over the course of more than a year. The net gain since Friday, net of cancellations, has been over 1,800 per day.” A bit confusing. That would be 63,000 cancelations from April 2016 to July 2017 with a net orders in house of 455,000. Not sure what the Tesla “1,800 a day” references, reservations received since the highly publicized July 28th delivery of 30 test cars? As for not advertising, the splashy deliver of the test cars, none are yet for sale or being delivered outside of those 30 test cars, is definitely advertising and definitely designed to add orders, which it did. So a bit disingenuous, unnecessarily it seems, on the number fluffing there. As for the 520,000 year production of the Model 3 by end of 2018 and continued production of TS and TX during that time would mean capability of 650,000 cars a year going into 2018? It would have been helpful to have a breakdown by: 1. Cars planned to deliver in 2017. 2. Cars planned to deliver in 2018 (something less than… Read more »
Nix

That would be 63,000 cancelations from April 2016 to July 2017 with a net orders in house of 455,000. Not sure what the Tesla “1,800 a day” references, reservations received since the highly publicized July 28th delivery of 30 test cars?

The numbers are pretty clear, but it does take some math.

First, start with the only full data-point we have on a single date:

“as of May 15, 2016, we held deposits from about 373,000 customers who had made reservations for this car. This reservation total is a net number after customer cancellations of about 8,000 and after about 4,200 reservations that we canceled on the belief that they could have been duplicates from speculators.”

May 15 2016 — 373,000 reservations, after 12,200 cancellations.

By the end of July 2017 (approx 14 months later) they have 455,000 reservations after an additional 50,800 cancellations. That is a total of 82,000 net new reservations. Or roughly 5,850 net new reservations per month on average after subtracting out cancellations.

The “1,800 a day” is exactly that. The net new 5,850/month reservation has now gone up to 1,800/day since the final reveal.

FISHEV

Chuckle…so 12,600 new reservations since the highly publicized sales event showing delivery of 30 pre productions cars garnering free front page advertising and having, apparently a good advertising return.

If Musk did not want to add to the line as he claims, he would not have held the event which was likely no delivery at all, likely the employees driving the 30 test cars were the same people driving them over the last couple months.

But he was able to spin the status quo into a “delivery” of 30 Model 3’s in July so he could claim he met his production date which has apparently slipped a bit as Tesla is not selling production models as of early August vs. previously promised July.

All a bit opaque vs. just telling folks what the actual sales and production predictions are for 2017 and 2018.

FISHEV

PS to read the entire Q2 2017 report without signing up for SeekingAlpha newsletter (a bit opaque of Tesla not to provide a PDF version), do a “Search” for “Model 3” and the entire transcript will show up which you then save as PDF.

John

After reading this, I have one solid takeaway.

I want a hamburger. And I don’t want to wait over an hour for it.