Suppliers, Analysts Doubtful Tesla Can Hit Model 3 Targets


Tesla Model 3 - Image Via Datcode on Imgur

Tesla Model 3 – Image Via Datcode on Imgur

Tesla Model 3

Tesla Model 3

The automotive world doesn’t typically move at Elon Musk speed, meaning that the “impossible” targets set by Musk often can’t be achieved either internally or externally from suppliers that make the parts for cars. Musk admits to this in reference to the Model 3:

“Now, will we actually be able to achieve volume production on July 1 next year? Of course not.”

So, when Tesla announced the moving up of Model 3 production and higher production targets, the automotive industry was shocked. Did Musk think his company could actually achieve the impossible? Probably not, but hitting those targets are beyond his control.

Recently, Reuters tapped some industry analysts on the topic of Model 3 production targets and launch dates. Here are a few snippets from Reuters’ article titled “Exclusive: Suppliers question Tesla’s goals for Model 3 output” –

Elon Musk

Elon Musk

  • Musk said the Model 3’s simpler design, new production hires and enthusiastic suppliers would help the company make its goals. He said Tesla would drop suppliers that could not meet deadlines and would bring more parts production in-house than traditional automakers typically do. He did not specify how much or which parts.
  • One complication is that Tesla has not finalized the Model 3 design and specifications, said automaking consultants and supply executives who asked not to be identified because Tesla prohibits them from disclosing contract details.
  • Under ideal conditions, automakers have launched new assembly lines in 18 months, but they typically take two to three years after the first tooling and supply contracts are signed, several manufacturing consultants said.
  • The company still is soliciting bids for parts and machinery, according to representatives from several of companies that have received them, as well as industry consultants who monitor such bids.
  • Automaking consultant Ron Harbour of Oliver Wyman said increasing production at the Fremont plant to 500,000 vehicles in 2018 would require more stamping, welding and assembly machinery that “could take up to 18 months to order and install.”
  • Jeff Schuster of industry forecaster LMC Automotive said the goals were “implausible,” in part because Tesla’s battery factory in Reno, Nevada, was unfinished.

It seems that all those in the know think that Tesla won’t be able to pull this one off in the way the automaker outlined in its Q1 report. We tend to agree that it’s impossible for Tesla to actually hit its 100,000 Model 3s built in 2017, but we’d like to think that Tesla will do everything in its power in an attempt to be as on track as possible.

The Reuters article concludes with this oh-so-accurate statement from Frank Faga, a Detroit-based auto manufacturing consultant:

“I’d be really surprised if he can launch production by next July. But this is a guy who says he’s going to Mars. Who am I to say he can’t do this?”

And that is precisely why we like to believe that Tesla can achieve its targets, even if others say no.

Source: Reuters

Categories: Tesla

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117 Comments on "Suppliers, Analysts Doubtful Tesla Can Hit Model 3 Targets"

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Shouldn’t these suppliers be happy that they have a car company that want to buy from them so many parts for a lot of money?

+100. He’s saying, after you delivery this assembly line A, you know what, Build me an Assembly line B and C just like it.

Want to know who just got Christmas in May.

Tethe competition B.S. rumours said the Roadster was impossible, the S would fail, the X is too complicated etc… Press agencies in the game is only a higher level of B.S.

I’m fine is Tesla doesn’t meet its Model ≡ deadlines. That gives me more time to save up. I was expecting my Model ≡ to be made in 2020.

Most of the Model 3 reservists probably will NOT get the federal tax credits.

I think Elon himself doesn’t believe it. I think it was said to put pressure on the entire Tesla team to keep everything moving as fast as possible.

Even if it’s 2019 for 500k+ cars to be produced, that’s still sooner than 2020, so mission accomplished for Elon.

@Alaa said: “Shouldn’t these suppliers be happy that they have a car company that want to buy from them so many parts for a lot of money?:

Yes…but Tesla is also requiring suppliers to make big changes of how the supplier runs its business. It’s not just another parts order to fill. Being a supplier for Tesla requires the supplier to change gears from business-as-usual to Tesla Time. What normally would be expected to take 18 months to deliver Tesla wants it in 6 months. Change is hard for any established company including an automotive parts supplier. Tesla getting suppliers to change how they do business to meet Tesla’s expectations has so far proved to be hit-and-miss.

Change is hard because these guys are settled in their Hum Drum Comfort zone & are accustomed to sleeping at the switch.They may need a bomb under their *sses to wake them up & get them working again..Because They “WORK” At Avoiding Work & at Being inefficient to Maintain a Light Workload, So they can “DF” their lives away..

Tesla will be dead in a few years E!on just doesn’t know it yet. Look at the other car companies that made compelling autos Saturn or one with a rich history Pontiac remember them?

Elon will say anything to get his stock up to keep Tesla fanboys interested for as long as possible. Or to sell his shares at the highest price to reinvest.

Once the other car manufacturers start rolling out EVs and under pricing Tesla’s price it will be real interesting to see what happens to this little company.

Our newest username to just magically appear to spread FUD!

I wonder which existing hater this one is?

It kinda sounds like old see through, choke and gag.

I wonder who will take over their SuperCharger Infrastucture when this takes place?….

“Once the other car manufacturers start rolling out EVs and under pricing Tesla’s price”

Yup. Once that happens. If that happens. When will it happen?

So, In all Ur Expert Opinions Tesla Is already “DEAD IN THE WATER”…..That’s the spirit ! Here’s To Hoping that “YOU ALL EAT CROW” with your Humble Pie for desert! And lots of it !!!.. Cheers

Talk to suppliers and these impossible schedules, i.e.

– Who wants to be the next Hoerbiger and risk a lawsuit / bad name because of impossible demands?

For background:

– Who wants to be paid late (Tesla is not a good B2B partner compared to most competitors)?

Oh! I forgot to mention paid bogus commentators in my upper comment.

These are facts, RexxSee:

Please tell me how these Model X cars left the factory?

QA missing or in sleeping bags?

Remember: These are _production_ cars (one would assume test cars given to the press/reviewers get extra scrutiny!) and Tesla is six months into production – or so they would like us to believe.

Good luck on that 2017 Model3 based on a NEW platform and with moving specs and supplier lists…

Don’t blame “paid commenters” (which I’m not) instead of looking at facts in terms of quality and known production limits / deadlines for cars.

Apparently you don’t understand that cult members never pay attention to facts.

Apparently you Don don’t understand that professional stock manipulators who probably do not even drive EVs are coming in here to spread FUD.

Just because you hate Musk doesn’t change their despicable behavior.

InsideEV’s should do a story with a list of some of your better FUD statements over the years. It would be entertaining to see how wrong you are all the time.

Ugh, these suppliers are stressed. They are being asked to very quickly build high-quality parts for a very low cost.

God forbid that happens. There goes their peaceful and quiet life! 😉

They are not happy to be blamed for not being able to fulfill Elon Musk’s impossible goals.

Additionally, Tesla is a big gamble for them. What if they went all-in and expanded their production like crazy to meet Tesla’s demands and then Tesla folded? Then they would be knee deep in debt for a production line they have no use for anymore. In other words, this isn’t just a huge risk for Tesla but also for its suppliers.

Tesla currently sells two other popular BEVs, Industrial PowerPacks and Home PowerWalls. Records were broken when Model 3 took reservations. Who knows what other Tesla products will debut between now and production of Model 3?

Tesla is incapable of folding at this point. There is almost no risk to their suppliers.

Tesla is hardly selling any power products, the cars they are producing do not cover all of Tesla’s costs and they are in desperate need of more cash. Tesla is very much able to fold.

There’s also a problem with cash flow. The supplier have to buy raw materials to produce the parts Tesla wants. The supplier have some time before they have to pay for these materials. Then they make and deliver the parts to Tesla but just as the supplier Tesla doesn’t immediately pay for them. Now the supplier of the raw materials want to get paid, what if Tesla doesn’t pay its bills on time? Then the supplier takes the hit which can be huge if they are forced to expand production significantly in a short time. This can be really dangerous for them and no sensible business wants to be in that position.

Well the suppliers need to raise some of their own investment capital. It is not like they can expect Tesla to pay them for all the parts in advance and get the parts 18 months later.

But if those suppliers ink a deal with Tesla, they can go to banks/investors to raise capital for what they need to do to get started on the contract. Tesla is not just growing Tesla . . . Tesla is growing their suppliers.

More FUD from what is certainly a small organized group of shorters.

Anon said:
“Tesla is incapable of folding at this point.”

Incapable? Incapable is a very strong word, and its use is unjustified in this context. Tesla has $4.1 Billion in debt/bonds IIRC. If Tesla starts missing payments because it is short of cash, it defaults on the bonds/debt and the bondholders/debtors take over the company or force bankruptcy. Best case scenario, is that these secured creditors will renegotiate the terms of the debt, and give Tesla a second chance to right the ship.

By far the most likely scenario is that Tesla will not reach its production goals and rather install 1, maybe 2 M3 assembly lines in late 2017 with another 1 or 2 lines added in 2018.

It is very likely they will start mass production in late 2017 at which point all this doom & gloom nonsense will mostly go away.

Tesla is a very valuable company, easily the most innovative in the industry and is using a completely new business model than the laggard OEMs.

Panasonic is overly cautious at the same time Musk is overly ambitious and I am pretty sure they will meet somewhere in between but probably closer to Musk’s goals and timelines then Panasonic’s.

That was definitely a HUGE risk for Model S . . . and a bit for the Model X.

But at this point, Tesla is looking pretty solid. Both with consumers wanting to buy their products (with the 373K of Model 3 orders) and with investors willing to provide Tesla the capital they desire (The TSLA share price did not crash after the follow-on offering was announced).

I saw my first X yesterday, driving near my home. I can’t go anywhere without seeing 2 or 3 Teslas, and if I go on an extended drive, say over 30 miles – I’ll casually spot 8-10 Model S.

I don’t live in California. I don’t live in a particularly wealthy area. The cars don’t lit on dealer lots soaking up taxes and inflationary losses. They don’t have to be discounted to move.

I believe the auto industry as well as the gas and oil industry is well aware that Tesla is moving fast to become mainstream.

The sign that Tesla is making big waves is the amount of naysayers and critics Tesla attracts.

Yes, the “problem” with great demand for product.
Wow. The stock market will bitch about everything.

Tesla still has the problem of its expenses being in excess of its revenue.

Psssst …. Why do you alway have to spoil the nice Tesla party?

Rapidly growing companies nearly always have expenses that exceed to revenue. It is an inane thing to write that comment as if it has meaning.

When you say, “these suppliers” you assume that the Reuter’s article is talking about Tesla’s suppliers. It doesn’t. Read carefully and mark down each time it sources information from a Tesla supplier. Note how few that is… it occurs only once in the entire article.

BTW, the most idiotic question on the last Tesla earnings call was asked by one of the co-authors of the Reuter’s article.

When I read it… it looked like there were NO suppliers getting interviewed. Only consultants and “experts.” Who are all happy to share their opinions, but nothing is a fact.

Reuters’ editor slapped “Suppliers” into the headline in order to get more attention on web, and lookie here, it’s working.

Musk has pushed his team to their limits on the model s/x. Which is what a good leader is supposed to do. I think the timeline on the model 3 is asking for significant amount more productivity over that. I just think what he’s promising the impossible.

In other words, get that i3 two year lease, and enjoy the wait.

good idea.

ooooo i3 hell no. Volt looks more like car.

The Volt is great, perfect in fact, if you don’t need rear seat headroom.

So, I’m glad you give them the sale.

These are cars, not software. Serious errors can’t be fixed OTA. People may even die (see Takata).

I’m sure Tesla can build “cars” in 18 months.

The questions are:

– What margins (more vertical integration on hsort notice is counter to everything learned in lean production)?

– How many suppliers will bail? (Tesla pays them late so far, some are involved in lawsuits over Model X)

– What the quality will be on those 2017 and 2018 cars? (Late 2018 or 2019 sounds like a more reasonable date, there could be expensive recalls and many lemon cars. One giant recall can basically ground a small car maker…I don’t see why Tesla takes these risks.

LMFAO! Professional stock manipulator and unethical tftf who always neglects to inform us of his self-serving short positions once again spreading anti-Tesla FUD for his benefit. “people may die”, Really? Now you are really bottom-even for a Wall Street guy tftf. Tesla is universally known to build the safest cars. Likewise your Hoerbiger BS you keep mentioning is utter crap. The M3 does not have the FWDs that Hoerbiger failed to complete. The M3 is NOT the MX. The M3 was designed from the ground up to be easily mass-produced. Suppliers are hired and fired all the time in manufacturing so your lame example proves nothing. There are PLENTY of suppliers who want to get in on the action of making the quantities necessary for mass adoption of EVs and for Tesla. I know that Spiegel and all the stock scamsters are getting desperate because if Tesla starts delivering M3s its game over for your positions. All Tesla has to do is set up ONE assembly line and start making M3s by the end of 2017 and Tesla will be fine because they will be sequentially be adding more assembly lines going forward. As has been mentioned many times before,… Read more »

“The M3 does not have the FWDs that Hoerbiger failed to complete. The M3 is NOT the MX. The M3 was designed from the ground up to be easily mass-produced. ”

Did I write Hoerbiger will supply FW door parts? No, it was an example what can go wrong with impossible designs or schedules.

And to quote you: “FROM THE GROUND UP”. Exactly, a new car platform like the Model3 will take even longer to design for.

But keep believing in these “impossible” 2017-2018 schedules.

PS: The people may die comment is dead-serious. There’s a reason a new car model takes 4-6 years to design and test – especially with the kind of advanced assisted driving Tesla is promising for the Model3.

The M3 is ALREADY designed except for some interior and instrumentation.

Everyone knows that Tesla is not going to strictly meet their accelerated production goals but as long as they are making good progress they will be fine and nobody is going to die except maybe some shorter’s bank accounts taking a hit.

I can’t fine the article right now but it is not uncommon for cars to be developed/produced in much shorter time frames nowadays and since EVs are SIMPLER with less parts they can be designed/built faster.

“…since EVs are SIMPLER with less parts they can be designed/built faster.”

Yes, like the Model X that was supposed to ship by late 2013.

And the Model X shared parts with the S (less than Tesla once planned, but it still shared parts).

The Model3 however is a completely new platform – and Tesla needs to penny-pinch on $35k base cars.

So what can go wrong? A lot.

The sensible thing do do would be to launch the M3 by 2019 or 2020.

Instead, Musk is betting the company on an insane schedule and crazy cap-ex for batteries and tooling.

The issues are primarily that of quality. It does seem pretty clear that Tesla starts delivering vehicles that should have been part of a multi-month testing cycle to work out the worst of the bugs.

I’m tempted to cancel my reservation and then reserve one prior to the reveal part 2. As it stands now, if their first deliveries are in 2017, I would be getting my e-mail to configure my car that winter or early spring. Those early production units are going to suck, I’m afraid.

You sure you know what you’re talking about?
Vertical Integration is far more efficient then out sourcing production out to a second tier supplier.

Like Musk said, there’s more innovation if your building in house, in the subassembly and the production process to build the subassembly.

Well, as I’ve said, I think this will be harder than landing a rocket on a barge.

I just hope that the designers designed for ease of manufacture. Fewer parts, easy to build parts, and easy to assemble parts.

Godspeed, Tesla.

Landing a rocket on a barge is more technically challenging, while building 100K M3 is more akin to herding cats.

The article says the Model 3 will have between 6000 and 7000 parts. (The Model S has 8000.)

How many parts does a typical new ICE car have? If it’s significantly more (say, double or more), then that makes their ambitious goals more feasible.

ICEngines have 200-300 moving parts (!), so that’s a lot of savings right there.

Ever look over an exploded diagram of an automatic transmission? Wow!

Yeah, that’s one of the reasons why I think that an ICE drivetrain (engine, transmission, fuel system, exhaust system, etc.) can’t really cost the much less than an EV drivetrain (motor, controller, charger, gearbox, etc.) without the battery.

“Yeah, that’s one of the reasons why I think that an ICE drivetrain (engine, transmission, fuel system, exhaust system, etc.) can’t really cost the much less than an EV drivetrain (motor, controller, charger, gearbox, etc.) without the battery.”


Have you looked at inside of motor controller ICs? They cost way more than some casted or machined metal parts…

Those high powered ICs are expensive.

“ICEngines have 200-300 moving parts (!), so that’s a lot of savings right there.”

Yes, but how many none moving parts does Tesla have?

8,000 18650 cells alone in the batter pack?

I don’t think Tesla is better as far as part counts is considered.

However, moving part is another topic all together…

As long as the car drives the battery is a moving part 😉

I tried to look this up and it is hard to know. A Toyota site said a car can have 30,000 parts when stripped down to every last screw. However, many of the parts come pre-assembled from suppliers so you need to know the number of parts that have to be assembled at the final plants. Again, it is hard to compare because Tesla assembles their motors in their factory whereas ICE car companies often assemble engines, transmission, etc. at one factory and then ship them to another factory that puts them into cars.

Tesla is starting to do this by moving the battery pack assembly to the Gigafactory.

Yeah. Is a battery cell 1 part? It consists of a cathode, anode, separator, electrolyte, casing, terminals. It is all in the definition of what is ‘a part’.

I have had dealings with GM before and it’s common for them to push out invoices to 120 days.

Tesla is saying get aboard the train or be left at the station. Suppliers are saying the tickets cost too much.

Some suppliers, not Tesla suppliers.

I think Tesla’s game is to figure out which suppliers are capable and take other manufacturing in-house, like when they bought that Tool and Die company in Michigan. We know they went with a Korean tire manufacturer, so we already know that a decision was made there. What was it? Go with an imported product because it’s cheaper, or because they will meet supplier requirements.
I think their raw material suppliers won’t have a problem. They are sorted for lithium, and Alcoa has been great with the aluminium. They use a fair amount of Bosch parts, I note the pneumatic trunk/front trunk hinges are all Bosch. So who is complaining? NVidia? I doubt that. It has to be the folks making wiring harnesses, fuses, light bulbs, etc. Traditional auto manufacturers. The reason they are complaining is because they are “fat and lazy” and not used to working hard or quickly. Fat as in fat-cat, not actually obese. Think back to when Playstation kicked Nintendo off their high horse.

Tesla is disruptive to the automotive industry.

Good comment. Do you have any information or research on the biggest parts and suppliers on model s for a comparative analysis. Wondering how much of a car is manufactured in house vs supplied.

Panasonic and Alcoa.

Veddy interdesting!

” We know they went with a Korean tire manufacturer, so we already know that a decision was made there. ”

Yes, tires are not the critical path 🙂

That much I agree with even as a skeptic 😉

Now about the other 6996 parts missing…

Plenty of comments here about lazy workers in the automotive sector (not just yours) from people who have likely never worked in automotive manufacturing.

Wages have not kept up with inflation (you made more money 30 years ago in automotive than you do today), takt times are continually decreased, length of workdays increased, mandatory overtime, 6 day work weeks. Ergonomics are virtually non-existent – if you’ve ever bent over the hood of a car for a few hours, imagine doing it for 10 hours a day, every day.

It reminds me of uninformed people who complain about ‘lazy’ teachers who get summers off.

Basically the whole ‘walk a mile in a man’s shoes…’ thing.

My opinion is that suppliers who want the contract, will find a way to make it work, more likely a middle ground with Tesla. Nothing to do with laziness.

Famous chant, “four more years”, except this is in regards to how long I’ll have to keep SparkEV before Tesla 3.

Tesla milestones and deadlines are intended to inflate their share price (their only source of capital to fund operations). They are not actual production deadlines. Even if Model 3 was fully designed today (which is not and wont be for another year based on what they showed in April), since it is a new platform it has to undergo crash tests, durability tests, several rounds of revisions before it can be sealed for production. An accelerate production ramp only results in inferior design, like Model X which was pushed out too soon to maintain share price, resulting in a failed product that will never recoup the investment. The other issue is profitability, there is simply no way for Tesla to make this car at $35k for a profit. The only reason that GM can make Bolt for $37.5k is that they have excess production capacity, using a modified Gamma2 platform, they can use the ZEV credits fully, they don’t need to make it at a profit, and it is inherently a lower cost design than Model 3. Adding all this back to the cost will result in a number close to $50k for the base Model 3.

Isn’t it amazing how in all these Tesla threads all these newer usernames have started popping up with anti-Tesla doom and gloom FUD?

Complete BS Spiegel or Wahlman or some industry insider or whoever you are agzand.

The M3 design is 90% finished and will be finished in time for crash and durability testing etc. It was designed to be easy to manufacture and the necessary compromises were made to keep its costs down. Unlike the Bolt, it will be made in very high numbers and this alone will drop its costs lower then the Bolt.

I’m sure the average price of M3s will be much more then 35k but that will be from many buyers adding options exactly as what is happening with the MS and MX.

The MX is NOT a “failed product” simply because it would be far to early to objectively judge it.

The problems on the MX are being quickly worked out. MX is likely to eventually have a similar reputation as the MS which is widely considered to be the best car ever made and MORE reliable then virtually all of its competition.

Looks like you know better than suppliers and industry analysts referenced here. Just a few months ago Tesla said they will deliver 16.5k cars in Q1, they will be cash positive this year, and they won’t raise additional capital. These were the key points in their presentation. In 3 months time they have failed the first one, backtracked the second claim, and now raising $2b today. A company that flip flops in their short term goals can never deliver their long term goals, particularly when they are outside the norm of the industry. If I had told you in February that Tesla will dilute their shares in 3 months by 8% you would have accused me to similarly. But they did. Now lets see what happens in the next year or so. My bet is on analysis and math prevailing over hype and deception.

There are Tesla zealots who really can’t be reasoned, even if what they wrote short while ago turned out be completely wrong. Then there are Tesla fans who genuinely are concerned about turn of events. I’m a fan who want to drive Tesla 3 soon (note to Tesla: hurry the hell up!), but I’m also realistic as to what’s happening.

I suspect there are many here who share my view (Tesla fan, but realistic), not anti-Tesla as often thrown out by zealots.

SparkEV: I completely agree with you. We should not follow whatever management of a company says blindly. Particularly these companies that claim to be disrupting big industries. Look at what happened to Theranos and Sun Edison. We should keep an eye on their numbers and ask them why they cannot meet their short term goals, but they set higher bars farther in the future. This is a pattern that I have seen over and over again in companies that are in distress, and trying to muddy the waters rather than explaining what is really happening.

@ Agzand –

Naysayers – ya gotta love ’em!

Wright brothers?!!! HA! What a bunch o’ baffoons! Trying to fly…This is a pattern I’ve seen over and over… Stupid people trying to fly!They should just give up, and people should just stay on the ground…

So-called “disrupters”….HA! I mean, mega corp. GM calls Tesla a disrupter and hires team to follow their every move!…But that’s just because I’m smarter than they are…and I can go on websites and pretend I know what I’m talking about….

Agzand – you slay me! L 🙂 L

James: Based on your logic Theranos and Sun Edison should have succeeded. The truth is that only 1 out of many “disruptors” survive. Watch for Solar City later this year, as they are in worse shape than Tesla.

The Wright brothers were also lousy businessmen who ran their first aircraft company into the ground.

The supplier and production questions about the Model 3 are all about execution. Can they meet schedule AND avoid problems with product quality and reliability? Tesla’s history doesn’t exactly inspire confidence in that regard. Once they get beyond the true believers on the reservation list and more into mainstream car buyers, those quaint notions of trouble-free transportation will begin to take precedence over cutting edge features and ludicrous speed.

Placing unprecedented demands on suppliers and ramping up for production volumes that both the Tesla and its suppliers have near come close to matching create potential for disruptions of a different kind.

Wow another new username here to FUD! Obviously some of these people are paid to troll here.

Well agzand, while your looking for allies the Motley Fool takes a look at the longer term fundamentals of Tesla and disagrees with your unending pessimism.

@Get Real: Thanks! I looked at it briefly. Unfortunately I don’t see any numbers that matter, like CFO (cash flow from operations) or what is happening to gross margins over time, or cash burn intensifying while production is going up. Ultimately I am not projecting a total failure of Tesla, but I think at best it will be a boutique car maker in the foreseeable future. And it will lose a lot of credibility for false claims regarding Model 3 timing and price.

Sorry,agzand, you lost me when you called Tesla at the present a “boutique automaker”.

Your delusional if you think that by outselling the big boys in the lucrative luxury segment NOW that the MS and Tesla is “boutique”.

Tesla is poised to sell hundreds of thousands of EVs and to become the DOMINANT brand in the EV space which will grow rapidly over the next 5 years.

And yes that growth means over the short term they will raise and spend a lot of cash and be technically negative to get there just like Amazon did to become dominant in the online retailer space.

Outsell who? BMW Mercedes Audi make 1.5 to 2 million cars a year. Tesla made 50 thousands last year. Total Tesla production is a rounding threshold for any of these three. Amazon doesn’t make anything. Their investment is easily scalable. It is not the same with Tesla. Building 500k cars need many times the investment of making 50k cars. That is not the case with amazon.

Being in a small niche (e.g. lux) IS boutique. Porsche at 250k cars/year is boutique.

Tesla aspires to be mainstream. A successful launch of a reliable M3 would take them a long way down that road. I hope they make it, but they’ve got a very long way to go.

The Model S outsells the S-class, AZ and 7 series just like the Model 3 will eat the lunch of the C-class, 3 series and A4 in 3-5 years.

Get back to me when GM sells 400,000 Spark EV’s.

I know that Reuters is anti-EV/RE and provides a lot of cover for AGW denialists.

I’m sure that many industry insiders hate Tesla because of its profound disruption of what had been their industry.

I know that Tesla has relatively slightly missed many of its very ambitious short-term financial goals but it is meaningless considering how they are beginning to dominate in sales in first the luxury sector and are now moving downmarket with a very aggressive expansion of the company.

I know that the LONG-TERM outlook for Tesla is very bright as the DOMINANT EV BRAND and I’m very sure that within the next 20-30 years or so virtually everyone will drive EVs because of the need to address devastating climate change effects.

That is the fundamentals of the big picture rather then some myopic spread-sheet.

Where do you take the believe that Tesla EV will be ny better than let say Audi EV years from now, is beyond me. Their R&D is not any better than anybody elses … Their timing is different, but without manufacturing and servicing experience as well as shortage of cash, the others will soon catch them and probably pass them …. There’s many many obstacles for Tesla to be dominant EV maker let say 5 years from now.

Easy to answer, the Tesla brand is synonymous with compelling EVS and Tesla has had the foresight to start building the entire eco-system with Superchargers.

The others are stuck in compliance mode and heavily wed to ICE and diesel.

Agzand – If I would have told you that Tesla would acquire nearly 400,000 preorders for Model 3, you would’ve called me a dreamer…

@James: no, I predicted more than 300k pre orders. If you don’t believe me I can send you a screen shot of my post on a public forum. The problem is fulfilling those orders. Lets say BMW announces you can pay a deposit of $1000 and reserve a BMW 328 for $20k. Sure they will get 300k orders, because people think they are getting a tremendous value, a luxury car with awesome performance for Corolla price. But BMW cannot deliver a 328 for that money, and even if they do, it will permanently damage their profitability on their other models. Even if they deliver a corolla equivalent for 20k, it will damage their brand, which is their most valuable asset.

Tesla didn’t backtrack on anything. They need the capital raise because they decided to move up their already aggressive production target from 2020 to 2018 during the quarter. They ran into problems with the Model X, and reported it. I don’t see the problem here.

What you have missed is the fact that the prototypes were using production-ready powertrains, and that the remaining design is 90% complete. In the conference call, the design will be locked-down by July, in time for suppliers to start tooling…not “next year some time”.

You have to pay attention to the whole story, not just what sticks out at you.

I don’t believe a single word of that. I believe prototypes were running on chopped Model S chassis. The interior was not designed yet, this is one of the most important aspects of any car. You cant find a single successful car with a poorly designed interior. And they cannot order tooling before chassis is fully tested for durability and crash tests, because any change will cost billions. This is not an iPhone. Everything should be 100% final before a single press is ordered.

So agzand, why don’t you be ethical and disclose your short positions on Tesla?

Because this is a discussion. I am not publishing anything. Why when you cannot argue with the message you attack the messenger?

Let me translate agzand’s non-answer for the unitiated:

agzand is short on Tesla but can’t admit that because it would undermine his FUD arguments against Tesla and if he does that then he loses on points.

That only leaves a few other questions for agzand:

Do you even drive an EV or is that also irrelevant to the “discussion” here?

Are you a paid troll?

And if you are, are you Spiegel or working with his little crew to try and undermine Tesla for fun and profits?

And btw, I and others have dealt with all your fudster points one by one, Tesla isn’t going anywhere but you should head back over to Seeking Liars as a more appropriate place for your “concerns” than IEVs.

When you listen to whwat the drivers said in the test drives, you will realize that the interior has been thoroughly though-through. The dash is as it will be – for what they claim to be improved visibility and improved cabin air flow.

They have been working on this car since at least 2010, when that clay model pic was leaked. There is no reason to conclude that your ridiculous claims about being on chopped S chassis are reasonable.

Also if you knew basic accounting 101 you could see from their financial statements that there was no way for them to even execute their original road map with their cash in hand. And it is pretty clear to me that they will have another larger capital raise in 2017 or sooner, because $1.5b that they raised today is barely enough to cover their OPERATING cost for a year. It is not enough to cover investment in Model 3, gigafactory, and supercharger/service center network that they need to support 200-300k cars on the road.

At 2,000 cars/week in 2H16 Tesla probably could have funded their original ramp rate using cash on hand plus the ABL. But it would have been close and 2,000/week is a “Musk goal”. The “unexpectedly” high demand for the M3 was the perfect excuse to raise capital that would have been prudent to raise in any event.

That is my assumption, as well.

Tesla milestones and deadlines are intended to be what they’ve always been for Tesla, MILESTONES AND DEADLINES! Can they achieve them? Maybe, maybe not, but it likely won’t be for lack of trying.

As for capital, you do realize that Tesla actually makes and sells products for money? Otherwise known as CAPITAL? They of course need to raise a lot more, as they’ve come across the most unusual situation in modern automobiledom.

An accelerated ramp of a COMPLETED DESIGN only affects that portion of the design tied to the manufacturing process. On that basis, any underlying design(Model X) that makes manufacture much more difficult or complex, could be considered inferior. Tesla is stressing ‘ease of manufacture’ as the primary mission with Model 3. Therefore I would say, the opposite of inferior.

I believe that even if Tesla doesn’t hit every cost metric they seek, there will still be enough wiggle room on the battery side to bring the car in at $35k.

Tesla said June 1st was the design finalization for the Model III. That showed up in an interview. The March 31 reveal was production motors. I believe they were tweaking the trunk, I know the steering wheel is being updated, and that is all I recall was being worked on. So, sometime in June or July should be the second reveal. I do hope that the screen is posable, though.

The Reuter’s article is not about Tesla’s suppliers.

Most of the article is sourced from automotive industry people based in Detroit and New York. They have no insight into Tesla and hilariously gets things wrong wrt Tesla.

There’s only one quote that is attributable to a Tesla supplier and that’s the one where it says that Tesla is doubling the original production levels.

That’s it.

Everything else is sourced from people that are either not a Tesla supplier or is a shill for Detroit automakers.

Don’t you just love those stories where the naysayers line up to state, “he/she/they can’t do it!; Never never ever ever!” – And then that person/people/company does “the impossible”?

For Model 3 and Tesla – you can bet Musk hears this doubt every day loud and clear. He seems like that kind of person that says, “Oh yeah? watch me!!”

Of all the many problems my Model X had delivery, none were related to the falcon wing doors or any high tech feature. It was all basic stuff. The problem, as I see it, was that they were racing to hit end of quarter deadlines. Therefore, I see no reason why a simpler Model 3 would also not suffer massive quality issues if their timelines are at all aggressive.


Quality – Time to Market – Cost

Fundamental engineering trade-offs.

Apparently not for Tesla cultists (I have to use that word).

There are basic deadlines and lead times in the car industry that also apply to EVs, Tesla can’t change them (well, they could, but it would take decades).

Well unethical stock manipulator troll tftf, before you discount Musk/Tesla you should probably consider what his Space X has done to the Boeing/Northrup Grumman consortium ULA in the rocket business:

I agree with the analysis that the claimed date is not the real date.

And I bet that Musk knows this too.

But dealing with suppliers is like dealing with that one buddy that is always late to everything. After a while, you just tell that guy that the movie is 30 minutes earlier than it actually is.

The key is that you never tell the guy that is always late when the movie REALLY starts. And you can’t let your friends tell him either.

So this is my last post on this topic…..

Whatever anyone says, what matters is what the model 3 actually ships…

All that expectation only matters if you play with the stock price…

Even as a reservation holder, it makes no difference whether it is delayed or not. or whether you get the incentives or not. Because it will be what it is.

But Musk must play the stock market, without it he got no cash to advance his game and start delivering Model 3. So he knows he cannot start mass production n time, but he cannot quite state it like that ….

The reason he got no cash, is because his expenses are higher than his revenue …. I know I know the darn Tesla extensive R&D.

Perhaps the American investors will keep him alive as long as they have kept around Amazon …

I can’t believe the E!on has hired so many blinded fanboys to spread lies on how well the company is doing and that they are on pace with meeting those dead lines.

He must of promised them to bump them up in line for the Model 3!

It does not appear that anyone really believes the 2018 goal. I, for one, was cautiously optimistic about the 500k units in 2020, but now that it’s been moved up to 2018…and seeing how they rush to meet quarterly goals and sacrifice quality in the process (partly the market’s fault, but still)…I’m very tempted to cancel my reservation and then reserve one right before the 2nd part of the reveal. The first 10s of thousands of Model 3s are probably going to be warranty queens…

Actually there are no suppliers interviewed in the Reuters article, as far as I can detect from reading it. Definitely no named suppliers that are going on record.

Only “consultants” and “experts” who are always happy to share their opinions.

It’s too bad everyone and their dog is picking up on this bogus reporting – even CNBC’s Phil LeBeau.

No-one actually supplying Tesla is going to talk to Reuters in this way.

The only real supplier who has gone on record is Panasonic, who yesterday said “we will try our best to speed up if Tesla asks us to.” Not a lot of skepticism and worry in that statement, that I can detect.

A few years ago almost every ‘expert’ declared a car like the Model S couldn’t be built, that Tesla would be losing a ton of money on each car because batteries were too expensive and they had no experience in mass producing cars etc. etc.

Now, everybody has forgotten that and in hindsight it all seems so logical and easy.

All this talk about the iron laws of the automotive industry. Well, as far as I’m concerned those are not laws of nature and thus not written in stone. All it takes is one company to show how its done. Is Tesla that company? It seems they have the right dna. We’ll know pretty soon. Can’t wait. We’re living in exciting times.

Huh? Both the Nissan LEAF and the BYD e6 shipped before the Model S. The Roadster could be considered pioneering but the Model S was not.