Musk Cites Significant CapEx To Achieve Tesla Model 3 Volume Production

Tesla Model 3

NOV 9 2017 BY STEVEN LOVEDAY 81

Tesla Model 3

Tesla Model 3

To appease investors and consumers, Musk must continue his optimism about the Silicon Valley automaker’s future, while providing some viable answers and even a bit of reality surrounding Tesla Model 3 production goals.

Though the popular CEO didn’t get on the recent earnings call and say the Tesla Model 3 world is in peril, he was a bit more reserved about the current situation. Nonetheless, he painted a rosy picture of the more distant future. In the previous conference call, Musk shared (via Forbes):

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

Tesla Model 3

Tesla Model 3 Production

He has also said on multiple occasions in the past that the automaker won’t need more money for the Model 3. Shortly thereafter, Tesla upped its borrowing capacity a few times, as well as holding its first junk bond sale.

JPMorgan Chase analyst, Ryan Brinkman, recently questioned Musk about the 10,000-a-week statement.

This time, the Tesla CEO took a bit of a different stance. He explained that it may be “too early” to make such a forecast. He did still say that 10,000 is the goal, and demand can sustain it (which is blatantly obvious since there are 500,000 reservations. Demand could sustain 20,000 a week or more). However, he didn’t give a time frame and he said it will prove expensive. Musk continued:

“But I mean, if you extrapolate from 5,000 units towards the end of Q1, we do want to call upon significant CapEx until we are confident about cash flow on Model 3, so then that’s a question of how long it takes to implement. I mean, that’s where you get to 10,000 units a week for Model 3, which is a number we are confident can be sustained from a demand standpoint.”

Forbes points to the potential elimination of the $7,500 federal EV tax credit as another future obstacle. However, we have no way of knowing if this will actually happen. Many people that planned on a $35,000 base Model 3 minus the credit are still seemingly planning to move forward with the more expensive initial offering and the prospects of no credit. Most should already be aware that if they are waiting for the base Model 3 to arrive, the credit will have disappeared by then regardless. As far as we’re concerned, the fate of the government incentive may not play a huge role in Tesla’s situation. Although, it may have a more dire impact on OEMs electric car pursuits.

It’s become abundantly clear that EVs are here to stay and that growth is imminent. Despite Tesla’s struggles as a startup, it’s paving the way, and as far as Wall Street goes, there’s still a significant emphasis on the automaker’s successful future.

Source: Forbes

Categories: Tesla

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81 Comments on "Musk Cites Significant CapEx To Achieve Tesla Model 3 Volume Production"

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So should we interpret that as 5000/week is what they can get out of Fremont and that a new factory (i.e. significant CAPital EXpenditure outlay) to get the other 5000/week?

If so, then that could take some time to acquire/build.

No, they’ve repeatedly said they can get to 10k/week at Fremont. What they haven’t said is how.

There are reports they originally ordered a 2nd line that was a duplicate of the first, but cancelled it. There are also reports of a new line being designed and tested in Michigan for delivery late next year.

In the conference call they said they’re going to wait until this line is running 5k/week before deciding on the next step. Musk thinks they can speed up some parts of this line. They’d only need to duplicate the remaining parts, saving space and money.

I personally think they also want to see how many Model 3 reservations translate to orders before committing to expansion. Execs not named Elon are making contingency plans to use the second line to make Model Y instead of more 3s. That’s why they scaled Model Y back to a Model 3 variant instead of a whole new platform.

That shows you have paid very good attention to the earnings call. Thanks for being an informed commenter. I was just over at electrek and the amount of ignorance on the comments section was painful.

Looks to me like he’s been paying more attention to the rumor mill. There are multiple assertions in that post which I guarantee are not based on anything in the recent quarterly conference call between Tesla execs and financial analysts.

Even if all the pre-orders translate to sales. You still might not have sustainable 500k/yr sales ongoing. So you might max out production at 300k/yr

Well, based on the simple extrapolation from the understanding that there were 12,000 Reservations for the Model S, by the time the 1st Deliveries started in mid 2012, and they were being told by the naysayers, that they would fill those 12,000 Reservations, and that would be the end, I can’t see why a car like the Model 3, would have issues with demand to the continued 500,000 per year mark, unles Model Y sales steal its Thunder!

Then, when the Model X came out and Sales & Deliveries started, they had 20,000 Reservations for that, which are filled and those 20,000 are now about just 6 Months of Production, and the sales keep coming!

That for a car 3x – 4x as expensive as the Model 3, Plus it is approaching the sales Volume of the Model S, might even PASS the S Sales Volume in this, the Q4 period, or Q1 in 2018!

Shortly after that, it will be the Model 3 passing them each in Sales and Delivery Volumes, then, Both the S & X Combined! Probably, by late Q2 or early Q3, 2018!

AFAIK the Fremont factory maxed out at 350k/year (7k/week) when Toyota owned it and I very much doubt that Musk can make it more efficient than Toyota so my bet is that we will never see 10k/week at Fremont.

Tesla expanded the factory since they took over, so outpacing Toyota should not be a problem. Also auto production is much more efficient today in ten years ago.

Ordering a new production line from Detroit was a smart move then in the line after when the Detroit line is moved to CA or NV, then Tesla robotics can enhance the next line, is very shrude move. Only now GM needs to do the same and set up shop in the EU to be a world auto company again and not just a regional and that should include United Kingdom as well!

No, the second 5,000/week will also be produced at the Tesla factory in Fremont.

There is enough space inside the Tesla factory in Fremont to create a production capacity for the production of 10,000 Tesla Model 3 cars per week.

That is what has been said in the past with regard to the production of the Tesla Model 3.

I cannot for the life of me understand the reasoning behind this OBSSESSION about Tesla being able to produce 10,000 Model 3 vehicles per week at some point in the future. The immediate need is to reach volume production of 5,000 per week (that’s 20,000 cars per month!! 260,000 cars per year!!!!) which will make a HUGE difference in mass adoption of EVs in the US and around the world, greater than any EV to date and probably greater than the sales volume of the top-selling gen2 Nissan Leaf in 2018 and beyond.

Can everybody PLEASE stop obssessing over this crazy goal that makes no sense. IMHO there will not be enough EV demand to sustain 520,000 Model 3 sales per year until well after 2020.

Another Euro point of view

+1000

The problem is that it’s doubtful if Tesla will be profitable with “only” 260k cars sold per year.

That was just 260,000 for Model 3 alone, as I got it! There would still be an added 85,000 – 100,000+ Model S & Model X on top of that! So, 345,000 to 360,000+ with the ‘T’ Logo on them, per year, not counting Tesla Semi (Truck, as it now seems to be called!).

That is all as an item for 2019, anyway! Still time to finish up quite a bit of the current expansion build out in Fremont!

My (very vague) estimates say that 260K Model 3/year is pretty close to breakeven (depending on how well the Powerpack business is doing).

500K Model 3/year is highly profitable.

So there is a great advantage in getting to 500K/year. Also in ramping up the Powerpack business quickly.

89 Million cars are sold per year. BMW alone sold 2.3 million of which 400k were 3 series. You don’t believe that Tesla can sell 500k?

Lawrence – No, I don’t believe Tesla can sell 520,000 Model 3 vehicles per year in 2018 or even 2019 as demand for this 35-45k entry-level luxury EV simply cannot sustain that kind of sales volume until well after 2020. I may be wrong but I really doubt it. A lot of the EV adoption curve in the US will depend on the fed tax credit staying alive and state rebates continuing.

Bluntly put, if Tesla can get to 3,000 Model 3 deliveries per month by January/February 2018 I would be VERY happy with that progress. BABY STEPS.

Don’t forget that the gen2 Nissan Leaf will absorb most “working class” EV demand for the foreseeable future as other budget EV manufacturers (Hyundai/Kia/VW/Ford) try to catch up to Nissan and as GM begins heavy discounting of the Bolt to compete for Nissan customers as well.

And yet they sell nearly double that in that price / class range.

I don’t shop in that range but the base 3 series starts around $35k, but only stripped in black. There are many option packages and they are steap.

Demand is not a problem. It will be trivial for Tesla to sell 500K $35000 Model 3s per year *worldwide*.

There’s one big difference people who love in condos and apartments can buy the 3 series and gas up without an hassle. Those same people will not have a place to charge their cars.

Sur le nez.

5,000 per week isn’t “Volume Production”?

It is, both by industry standards and in Tesla’s written communications. This is an article about an article about Tesla’s communications, which themselves have been confusing.

Yup. This isn’t merely Inside Tesla’s Finances, it’s Inside Inside Tesla’s Finances!

Yawn. Wake me when there’s an article which is actually about the Model 3.

Wow. What a horribly one sided story.

No mention at all of Elon talking in the exact same call about how the ramp-up from 5K/week to 10K/week would be a fraction of the capex compared to getting to 5k.

Nothing covering the part of the exact same call where he talked about “kicking robots” into operating at higher speeds without further capex on more robots for as many tasks as possible.

Nothing about how due to their supplier agreements, once they get into serial volume production that they don’t have to pay for parts until the car is built and delivered, thus further ramp-up becomes self-funding on the parts side.

Sad.

In all fairness, the part about running robots faster is typical Musk-speak. He talks about things they’re looking at doing in a way that makes some people think it’s a fait accompli.

The self-funding ramp is a temporary effect which only exists while they’re delivering locally. It fades as the delivery mix shifts to nationwide and reverses when they deliver overseas. By then they should be on firmer ground, financially speaking. At least that’s the hope.

The self-funding feature of the ramp up is good for the first approx 200,000 to 300,000 units.

That conservatively represents $8 to 12 Billion in sales.

At that point proceeds from existing sales entirely fund the gap produced by overseas sales delays, and STILL offers huge carry savings over their Model S/X supplier contracts.

I find your complaints about one-sidedness decidedly ironic.

Apparently you never heard the expression “People who live in glass houses shouldn’t throw stones.”

When is the last time you wrote a comment about Tesla which was was not biased against the company; which was balanced and neutral? Never, that’s when!

You need to be more specific. It was the 12th of never and that’s a long long time.
https://www.youtube.com/watch?v=nNNRGa3pKyw

Four Electrics — I find your content free whiny post to be a breath of fresh air. It is at least a massive improvement over you posting falsehoods, misrepresentations, and outright lies.

Your version of one-sided posts is typical to post the version of the story that is not at all on the side of reality. We don’t need any more of your posts from the alternative to reality.

Your mean this part?

“And we are pushing robots to the limit in terms of the speed that they can operate at, and asking our suppliers to make robots go way faster, and they are shocked because nobody has ever asked them that question. It’s like if you can see the robot move, it’s too slow. We should be caring about air friction like things moving so fast. You should need a strobe light to see it. And that’s incredibly critical to CapEx efficiency. And obviously we’re going to be designing a lot of the robotic elements and what makes the robots internally. So yes, because current (1:02:22) suppliers are just too slow to respond in some cases.”

LOL! Yes, looks like Tesla wants to push the edge of the production speed envelope so high they need to add aerodynamic shrouds around the robot arms to reduce air friction. And telling their suppliers that. And their old-school suppliers appear to be dumbfounded by the request. Hmmm……Maybe that is the problem at the Gigafactory. The production software did not factor in the relativistic effects of the near-light speed the robots work at.

If that was the problem, it would be easy to ramp up to 5k/week and maybe more, and only hard to get much beyond what others have been doing in the past. As Tesla has often pointed out, the Fremont plant once had a capacity of nearly 500k/year, which means more than 10k/week peak since no plant operates 100% of the time at peak for a full year…

Besides, we know they are hand-building battery packs over at the gigafactory, and that’s the main bottleneck. So dragging Fremont into it seems pointless.

I’m not sure it make sense to compare production capacity of the old GM/Toyota NUMMI assembly plant to the Tesla Fremont assembly plant, even if it’s the same building. Tesla does a lot more in-house parts manufacturing and sub-assembly work, so that reduces floor space available for production line work. On the other hand, if Musk’s vision for a touchless assembly line working at eye-blurring speed comes to pass (I’m not holding my breath), then they should be able to get the same amount of production out of a far smaller amount of floor space.

Additionally, reports are that the building itself has been expanded.

Yes, between what has already been expanded, and the permits they already have approved, the factory is already on track to being double the size as it was under NUMMI

The building has not been expanded significantly laterally since it was NUMMI. Some say there are higher floors going in but if so it isn’t obvious from the street. Of course, even if it isn’t happening yet it’s an option.

They are laying foundation in empty land between Freemont BART station and Tesla Factory about two months ago.

“Well sir, the problem is the arm is moving away so fast that the electrical signals cannot catch up to it in time to reverse its direction.”

But we all know that’s ridiculous. The robots will never approach light speed. The real problem is that they cannot find any hearing protection good enough to muffle the sonic booms all the robot arms will be making as they move at 1500km/h.

🙂 Sonic booms may be a benefit. Anything to drown out Elon’s hyperbolic bluster.

What is amazing is that he has the audacity to talk like that in these conference calls to some of the world’s most experienced automotive financial analysts. These people KNOW the auto industry and how cars are built. They were very diplomatic and polite, but reading between the lines, I saw a whole lot of eye-ball rolling. If they explicitly called Elon on his obfuscations, it would start a major sell-off.

But they may have no choice but call a spade a spade in another quarter or two if things aren’t turned around.

“Our next question comes from..” selections can easily shape a call. There are plenty of institutional shorts within the brokerage side. That doesn’t mean Tesla will continue indulging their questions on and offline, if they take too much liberty with the mic.

FBOW, Musk brings a lot of candor to these calls. Even in this world, I think most professionals respect that.

Nah, they just need to reverse the polarity.

HVACman said:

“LOL! Yes, looks like Tesla wants to push the edge of the production speed envelope so high they need to add aerodynamic shrouds around the robot arms to reduce air friction.”

My initial reaction to that was that it’s just as ridiculous as you’re portraying it.

But consider: If it’s a large flat part (say, a door panel) that a machine is moving, then air resistance is going to come into play if they want to speed up the assembly process to eye-blurring speed. Putting a shroud around the robot arm isn’t what’s needed there; that won’t do anything about air resistance from moving a large part.

Maybe it’s a failure of imagination on my part, but I can’t see how they could eliminate that problem unless they put the the assembly line (or parts of it) into a vacuum chamber!

That would really suck. 😉

That’s why Tesla now owns the companies who build the robots (two separate companies).

Everything you said is a direct paraphrase of the FUD that was used to say that Tesla would never build the Model S. They were wrong.

People presume aerodynamic fairings, sounded more like stiffeners to reduce flex. Higher acclerations more flex, higher wear on things.

Maybe you should take a step back and consider what it means that the writers on a fairly neutral EV-centric site are questioning Tesla.

Tesla has spent years making ridiculous claims, delivering late, and having reliability issues. Now they’ve been caught with their pants down on the M3 and the chickens are coming home to roost.

CCIE — apparently your reading comprehension is a complete failure. The story is from Forbes. Insideev’s didn’t write the source story, Forbes did. Insideev’s isn’t the source, Forbes is. The failure is in the original Forbes story.

You think that Forbes is a green car site? Nope.

Inside EVs posted the story. If they thought this story, or the FT one, didn’t have any truth, they wouldn’t have posted it.

Here is the other thing Tesla has done. They have delivered a quarter of a million Model S/X vehicles. Despite both of those vehicles being delayed, it still had no impact in the long term.

Sorry you are too short-sighted to understand that early delays in early phases of ramp-up have little impact on the long term numbers due to the limited volume of early ramp up.

There has been endless whining about Tesla being about 1,500 units behind in Oct. OMG!! what will Tesla do without that month of sales!! The horror!!

But when production reaches 10K/week that is 6 hours worth of production.

In the long term, all the whining and crying over the Oct. miss will come down to the equivalent of a 6 hour delay in production.

You guys can keep focusing on the stuff that has no real impact in the long term, and fail to see the forest for the trees. I’ll be the one with my eyes wide open with full vision of the long term. Your failure to see the long term is your failure, not mine.

You’re making the assumption that they’ll get it into mass production in the next three months, and that it will be reliable enough to keep people buying.

I happen to agree that they will get it into production before they run out of money (just barely). But, given their lack of experience with true mass production, I think reliability is going to be a major issue.

If anything is going to kill them, it’ll be stories of broken down cars and long waits to get service.

Tesla does have an advantage: electric cars are inherently more reliable than gasoline cars. On Model 3, they’ve also avoided a lot of the really mechanically complex and failure-prone elements of Model S and X (which really are no worse than those on many gas cars).

However, despite this, it is absolutely clear that they don’t have enough service centers. Not even for geographical coverage.

I don’t see why getting to 10k from 5k would be a small fraction. It’d be a large fraction. Musk, with his “speed is the ultimate weapon” statement thinks he’s just going to double the speed of most of the equipment. But it’s quite likely he’ll have to double the equipment in a lot of cases. Or he’ll have to replace/upgrade equipment to make it faster.

We already read that only 4 of 10 lines are up in the Gigafactory. To bring up 4 or 6 more lines is going to require a lot of equipment purchasing.

And this is all aside from the expenditure which comes just from storing and moving twice as many parts.

As to your comment about parts purchasing agreements, buying parts is not capex. It’s not relevant here.

unlucky said:

“We already read that only 4 of 10 lines are up in the Gigafactory. To bring up 4 or 6 more lines is going to require a lot of equipment purchasing.”

Not if the reports are true that the problem is purchased equipment not having been installed, or the problem is software running the equipment has to be re-written, or both.

In any case, your assertion assumes facts not in evidence.

To get to full capacity will at the least require adding more equipment to move parts in and out and to actually complete the building (which is not full footprint yet).

Are you asserting that it isn’t fact that the building isn’t complete yet? Why?

On top of that, the 10K figure was already a longer-term goal. There’s no reason to think that they would buy equipment needed to make 10K/week when they aren’t at 5K yet. He’s not crazy enough to do that. Of course, on the other hand, some of this equipment will be purchased by Panasonic, not Tesla.

Well dude, guess how technological progress and advancements are made in the world?

Better stick to HVAC.

TL;DR: world’s most expensive Kickstarter project, like most Kickstarter projects, requires more time, money. Principals revealed to have less expertise than previously claimed. More shortcomings to be revealed.

In short, there is nothing new under the sun.

Keep up your whining FUD 4E, kickstarter companies don’t decimate the established competition like the Model S has done to the lucrative MB S class market share you loser troll.

Model 3 will do the same to the much larger 3 series, C class and Audi A series and in fact just the reservations have already seriously impacted sales of those Euro vehicles.

Are we supposed to take Musk seriously? He’s utterly incapable of saying what’ll happen next month, but we should have “absolutely zero concern” about 10k/week by the end of NEXT YEAR..?

Well, if they survive the interim…

Also, the increase from give thousand to ten thousand is supposedly easy compared to getting to five in the first place, and yet the time he gives for the latter figure is more than a year away? What’s the implication for when 5k/week will happen?? July next year?

Whatever else one can say about Musk, communication isn’t his strong suite.

End of the 1st quarter March 2018 to be at 5k a week, according to Musk.
He went to Turkey, so that means, probably nothing, but I think it means they got a handle on problems.

They will probably have to raise the price in Europe like GM did with the Ampera E. About 20%.

Another Euro point of view

Ah !

Indeed. Better sell 5000 Model 3/ per week at a profit than 10’000 Model 3 at a loss.

Moreover there is nothing wrong with selling Model 3 above $40K. I am sure hundred of thousands would agree to pay that price anyway. I mean iphones don’t come cheap yet they sell very well. If Tesla understands that they don’t have to try to compete with Nissan or GM now. They can do that 10 years from now but not now.

“Another Euro point of view” said:

“I am sure hundred of thousands would agree to pay that price anyway.”

It’s amazing what people claim to be “sure” of, even when they have absolutely zero facts to support their assertion! 🙄

Another Euro point of view

Why not ? I mean worldwide of course. If Tesla manages to sell 100K cars at around $80K retail they should be able to sell at least 400K cars at around $40K-$45K. Now if they want to commit suicide selling at $35K the shorts at Seeking Alpha will for sure be happy.

Yes, fair cop. You did not specify the 400,00 Model 3’s per year which Tesla is targeting; I inferred that into your statement.

Mea culpa.

But if Tesla were to substantially raise the base price (MSRP) of the Model 3, then it’s only logical to conclude that annual sales would be substantially less.

And this, of course, is why Tesla haters are so eager to convince us that Tesla will raise the base price; that is not-so-subtly insinuating that Tesla will never achieve its goal of selling 400,000 Model 3’s per year!

Or, to put it more succinctly: Just more FUD from serial FUDsters.

I can’t speak for everyone (nor can you), but I’m eager to convince you of this because it’s how Tesla has done things for every car before. And when they don’t make their cost projections for this car they’ll do it again. Or simply delay the configurations until costs of inputs (batteries) come down.

Not because anything to do with Tesla’s sales goals.

Many, including those who postulated what the Options would cost on the Model 3, including myself, were and are, surprised at the cost of some of them: Paint, Long Range Battery, Advanced AP, Premium, etc, especially after Elon responsed to a tweet on the cost of the 2nd Motor would be less than it was for the Model S!

So, I think the current fully loaded Model 3’s, will give them a good chance at per car positive Margins, over components cost, but labor might be eating into that more at slower build speeds.

Right. It’s a $42k car on average so add a about 8k to that for the European version. If they follow the trend of raising prices in Europe, and people will still buy it.

Last call: “You should have zero, and I do mean ZERO, concern that we will be making 10,000 cars/week at the end of 2018.”

This call: “It turns out that was just a leading zero. You should definitely have some concern.”

“But I mean, if you extrapolate from 5,000 units towards the end of Q1, we do want to call upon significant CapEx until we are confident about cash flow on Model 3″

-Elon

So he’s saying he will need a big capital expenditure to double production from 5000 to 10,000/week.

Dah. Isn’t it obvious? Why is this so surprising??

Mainly he said just a year ago that Tesla “does not require any capital raise for the Model 3 at all”.

https://www.reuters.com/article/us-tesla-results/tesla-turns-profit-musk-says-no-new-capital-needed-for-model-3-idUSKCN12Q2QW

Whoops. Also said in that same article he thought Tesla could turn a profit in 2016 Q4. He was only off by $121 million. Whoops.

The car dealer joke “Q: How do you know when a car salesman is lying? A: His lips are moving!” applies to Elon as well.

OK Bro thx. Yeh I guess I remember that.

I pay less and less attention to what he says because I know by tomorrow it will all be changed.

bro1999 continued his non-stop FUD campaign:

“Mainly he said just a year ago that Tesla ‘does not require any capital raise for the Model 3 at all’.”

Wow, are you still beating that dead horse?

You are intentionally producing FUD by taking that remark of of context. If you read Elon’s remark in context, it’s obvious that he was talking only about the then-current financial quarter.

I think he was saying we will profitable, and not just for that quarter. Though it’s not like Musk did not say a lot of things that were wildly inaccurate. So what?

Well, one might wonder if the cost of rapidly expanding the Supercharger Network is beginning to cost ‘more than an insignificant amount’, as they are building sites with 12, 14, 16, 20, 40, & 50 Stalls at the newer sites, as well?!

While I have some reservations that they will make it to 10,000 World Wide Supercharger Stalls by the time the Ball drops this year in Times Square Midnight, Dec. 31st, 2017), it seems they will be able to make it past 8,000 stalls anyway, and maybe by the end of Q1 2018 before they hit the 10,000 stalls count!

I woul be more interested in seeing Tesla put in full Access to All Continental plugs where the cars are sold, like the new Dual Plug design for China, expanded for Europe and North America!

It didn’t seem that way at the time and it still doesn’t now.

He was, despite what you and bro1999 say, referring to the money needed to get the Model 3 launched. That is, to get it in production and saleable. Presumably that meant to the initial goal of 5K/week. It surely didn’t mean the quarter in question.

https://www.reuters.com/article/us-tesla-results/tesla-turns-profit-musk-says-no-new-capital-needed-for-model-3-idUSKCN12Q2QW?il=0

‘Musk told analysts the company’s current plan “does not require any capital raise for the Model 3 at all.”’

But I don’t see how his statement can be construed to mean he precluded needing capital to get to 10K/week. I would think he felt that the sales from the earlier cars (in the 5K/week era) could cover the ramp up costs, but I don’t think his statement could be considered as precluding capital raising after the Model 3 got off the ground.

Hey Bro how much capital does GM need to get the bolts production up to 5,000 a week? Oh that’s right no one want the bolt so GM is intentional slowing down production so those bolts don’t continue sitting on dealers lots with huge markdowns. I guess if Tesla ever wants to know how to slow production down they can come and look at the bolt assembly line.

Next he’ll be saying that they are going to put the factory in a non-air, or vacuum, state so that there is no air friction or sonic booms. Also, no people unless they wear space suits.

LOL agreed, Musk’s statements should be taken with a grain of salt.

However, from a marketing perspective, Musk’s BS is what gets the public’s attention on Tesla. The reality is that he’s in the business of selling a dream. And the more people buy into that dream the faster we will be able to achieve mass EV adoption worldwide.

“Many people that planned on a $35,000 base Model 3 minus the credit are still seemingly planning to move forward with the more expensive initial offering and the prospects of no credit. Most should already be aware that if they are waiting for the base Model 3 to arrive, the credit will have disappeared by then regardless. As far as we’re concerned, the fate of the government incentive may not play a huge role in Tesla’s situation. Although, it may have a more dire impact on OEMs electric car pursuits.”

Wow, this is naïve thinking. The only reason Tesla has been less immune to varying subsidies is because its cars have traditionally been very expensive.

Why would a $35k Tesla be immune to the loss of a subsidy, while the sales of a $35k Nissan/GM EV would suffer? As prices fall, buyers become more price-sensitive. $35k is high Camry territory. People will care less about the brand name than their monthly payment.

We have no idea what peoples intentions are. Heaven forbid Tesla say how many pre-orders there are in each country. It’s like he’s hiding something. Are only 20% of the pre-orders in the US? That would say a lot and Tesla has a larger hill to climb than if 50% are in the US.

I call this discussion the ‘Magician Robots’ “the hand is faster than the eye’.

Too bad other Robot manufacturers, such as Fanuc or ABB are doing great things with their sub-sonic barrier robots.

You would think they’d just want to precisely build one car after the other.

I can only conclude that it is much too boring to just build cars per ISO standards.

It’s absolutely irrelevant what toyota or gm did at fremont.

First and most importantly: almost everything complex in the cars built then was built elsewhere, it was just an assembly plant. There were at least 5 factories send stuff there by rails.

Second: Tesla expanded campus foot print.

Third: Different tech to build

Fourth: radically different vehicles

Fifth: 2 luxury cars are already built there.

Sixth: cars that were built there were cut rate economy cars.