Tesla Expected To Maintain Record Model 3 Production Into July

JUL 12 2018 BY STEVEN LOVEDAY 97

There has been much talk surrounding whether or not Tesla can keep up its newly achieved Model 3 production rate.

Many people have argued that Tesla went to great lengths to hit its production goal of 5,000 Model 3 vehicles per week by the end of June. This makes perfect sense since the automaker built a tent, shipped in new robots on six airplanes, and employed all the extra bodies it could. Not to mention other tactics, including changing testing procedures and running “burst” builds.

Several well-known critics and stock market analysts insist that Tesla’s 5,000 per week Model 3 production rate is not yet something that can be sustained. With these doubts came a drop in Tesla’s stock price shortly after it had been up at near-record highs.

Can Tesla beat the odds?

According to Teslarati, Bloomberg’s Tesla Model 3 tracker is showing trends that may prove the naysayers are wrong. While the tracker isn’t equipped to do a solid job estimating daily or even weekly production, it has been pretty accurate over the long term, as well as being one of the better sources out there when it comes to predicting what lies ahead. In fact, it was only off by 2 percent from Tesla’s reported Q2 figures.

As of the time of writing, the tracker shows that Tesla is building 4,033 Model 3s per week, while last week’s number was at 4,395. However, just the other day, the system’s estimation was showing a build rate of 5,187 vehicles per week. As you can see, it fluctuates significantly and can provide a completely different number on any given day. Averaging all of this together and looking at trends, Teslarati believes that Tesla could be in a position to produce some 5,000 Model 3s per week for the remainder of July.

With the automaker pushing to show a profit and opening up the configurator to non-reservation holders, it appears the goal is to churn out as many cars as possible and get them delivered quickly. Many of these cars will soon be the higher-margin dual-motor variants, which will work to help the situation considerably. There’s also the potential for the federal tax credit to begin its phase-out. This means it’s in Tesla’s best interest to crank out a record number of vehicles during Q3.

Even if 5,000 Model 3 sedans per week proves to be a stretch, with the amount of Model 3s the automaker had in transit at the end of Q2, along with the increased sustained production rate, it will be no surprise when Tesla announces record-breaking production and delivery numbers in the coming months.

Source: Teslarati

Categories: Tesla

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97 Comments on "Tesla Expected To Maintain Record Model 3 Production Into July"

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pjwood1

Bernstien’s Warburton and Sacconaghi (the boring bonehead) I don’t listen to. I don’t doubt 5k/week, or quality is good. I would be more concerned what’s in the reservation book, and how quickly it fades for cars costing >$40k. Tesla’s opening orders for general public, is putting anyone who wants the most expensive cars first. While upsetting to reservation holders, it’s good news for the $TSLA.

Viking79

It means me, with no reservation, can order a Model 3 LR+Premium today, and still receive full tax credit on it. They are going to sell a lot of cars 2H2018.

2xTesla

A question would be whether leasing the First Production and high trims nets more profit than a Base Model3. They could easily double the demand of high trims by offer leases. Remember that competitors to this car lease a large majority as opposed to sales.

Knut Erik Ballestad

Leasing is demanding capital from Tesla rigth now and deferring their income to be monthly over a long period instead of cash now.
– so don’t expect Tesla to start with vehicle leasing anytime soon….

Seven Electrics

No, Tesla can’t find a bank willing to place a bet on the resale value of an M3. They would take the cash if they could get it. This also happened after the Model S debut.

John

Why don’t you consider buying a Model X?

Pushmi-Pullyu

Why would Eleventy Pretend Electrics need more than the one imaginary Model X he already pretends to have bought?

John

(Shhh.. therein lies my fun with him..)

Nix

Tesla does not need to increase demand. They already have way more confirmed orders than they can fill.

2xTesla

Nix: At some point that’s going to diminish. So the better strategy is influenced by profitability.

Knut: There are ways of funding leases that don’t affect production cash flow, bonds based on the cars for collateral. The question is if after paying the bank rate the premium cars are more profitable than that base car.

scott

Demand for the Model 3 will diminish at about the same rate as the Model T.

2xTesla

Did you not read which Model 3 I was referring to?

Seven Electrics

At $35K, “can’t fill” is right. That’s why there’s a $300 commission on the performance model.

John

You should look at Model X’s.

ffbj

Mass production is not an insoluble problem, neither is it simply and straight forward. Tesla is figuring it out.
The Tent is an example of their outside-the-box thinking.

Nix

Yes, it is inside-the-tent thinking… 😉

ffbj

Exactly. Innovative thinking . I just don’t see what the big flap, is all about.

Viking79

New meaning to saying “I hold a stake in Tesla”.

EVShopper

Gives a new meaning to “Clown Car”.

Nix

How is your view out the windshield from inside the Clown car? It sounds like you are stuck in the back seat, and all you can see from your vantage point is butts and crotches.

Vexar

in reference to a giant tent, as in a circus tent. Yeah, that one fell flat.

Paul Smith

It’s a fabric membrane structure, not a tent. Made by Sprung Structures of Calgary Canada

Pushmi-Pullyu

Elon calls it a tent. This “structure” is both temporary and collapsible, just like any other tent, and unlike a permanently installed stretched membrane structure.

It’s a tent.

Robert Weekley

Just don’t let go….!

Nix

Yes, there really are no insoluble problems, just insoluble solutions.

#chemgeekjoke — no laughing required.

Vexar

I’m seeing a chemist this evening at an event. Thanks for the ammo!

Scott Franco

Are you dating?

Mark.ca

Very good!

BroncoBet

Cars made in the tent are likely junk, they trundle the painted bodies over in a forklift, people complained about scratched underbodies from the main lines, there will be even worse quality, yet low numbers from the tent.

Viking79

Oh no, the horror, a scratched underbody! /sarcasm

Paul Smith

You are likely a troll.

Nix

He is a notorious troll who trolls multiple green websites.

Pushmi-Pullyu

“Likely” is an understatement.

Pushmi-Pullyu

@BroncoBet

Lost much money on your “short” TSLA investment lately, dude?
😆 😆 😆

Scott Franco

In tents thinking.

Nix

Nothing against this story and the author, but the point of breathlessly awaiting weekly projections has lost much of its usefulness.

Tesla is past 200,000 now, that’s done. No reason to count down numbers to the end of any quarter ever again for projecting incentives. It is now calendar based.

Tesla has achieved mass production for the Model 3, so that is no longer in question. It is now firmly into numbers considered mass production numbers for cars in its price range. Give or take a thousand units any given week doesn’t matter.

Dithering over one week of production numbers has now become just that: dithering. It is meaningless for analyzing the stock over any meaningful time horizon. Heck, given how Tesla intentionally shifts around deliveries on a monthly basis for strategic reasons for the Model S and X, even monthly total Tesla sales numbers are meaningless from an investment standpoint. I feel sorry for anyone who don’t bother to calculate forward looking revenues and just looks in the rear view mirror at past quarterly results, much less fixates on past weekly results.

bro1999

So when do you expect Tesla to start producing the ~$35k Model 3 many reservation holders are waiting for? If that’s too hard a question, how about any SR Model 3? The reservation holders wanting a minimally optioned SR 3 are probably much more sensitive to the tax credit expiration than people wanting the $72k+ P 3s.

Viking79

We don’t need to guess, 6-9 Months. Notice the timing coincides with the phase down of the tax credit.

If I order a model 3 today I would still receive full tax credit on it. This is a genius way to drive demand for the LR+Premium model, as I am half tempted to order as it would bring the price much closer to the base anyway, and base sounds boring, no power seats or mirrors, no center console (guessing as it is listed as an option on premium), cloth seats, steel roof, etc. Not really what I am looking for. I imagine only those with reservations on the base will get a chance at it with any tax credit, but maybe production will be high enough that a few non reservations will get a chance.

bro1999

I think that’s the key. Tesla needs to be able to crank up production of the higher margin Model 3’s high enough to offset losses they would suffer selling base 3’s at ~$35k, because they’ve admitted they can’t make money on $35k 3’s. Until that happens, the SR base 3 reservation holders continue to wait.

Will

Bro they can make $28k on just the LR now if they make a cheaper one the can come out $12k profit margins

BroncoBet

They can not make 28K on any Model 3, they be lucky to have positive gross margin ion $55 K 3’s,source? Elon Musk. $28K profit is for Germans,Tesla doesn’t believe in gravity, and they have ridiculously high costs.

John

With $55k imagine how many aftermarket carbon fiber parts you can buy for a GM Bolt.

Ziv

I give the $35k version of the 3 about 6 months before it is phased out, possibly due to “lack of demand”. Sound familiar? LOL! If I was Musk, I wouldn’t keep the $35k price point around for any longer than they really feel is necessary.
It is also possible that it will stick around longer, but the amount of base model 3’s they sell will be limited to a small percentage of 3 sales.

Vexar

I think the short range one will show up and be popular because it is price-competitive versus the Leaf and BoltEV. This isn’t the 40- kWh Model S we’re talking, here.

My theory is that they will sell a few in the US before the end of the year, once they are at 10,000 per week run rate. They are going to add a Model III assembly line in Sparks, NV ( we are seeing signs of new building module construction there now), and the moment they get to that 10,000 per week run rate, it will be offered. So like maybe 3,000 of them delivered around Christmas time.

RPadTV

“ the moment they get to that 10,000 per week run rate, it will be offered. So like maybe 3,000 of them delivered around Christmas time”

That doesn’t make sense. The 10K rate is estimated for mid-2019.

BroncoBet

Yes,cancelled due to lack of demand,likle let them eat cake,Tesla needs to produce 6K a week of $70K 3’s that would yield a profit, every person in China gets to order before the first $35K 3.

Robert Weekley

A small % of 450,000 is a lot different than a small % of 12,000!

Kbm3

They can’t make the base model profitably today. They will be able to in a few months.

Pushmi-Pullyu

Right, but the trolls will never stop saying otherwise until Tesla starts selling $35,000 Model 3’s… and then they’ll instantly switch to arguing Tesla is going to go bankrupt by making unprofitable cars!

FUDster trolls: They’re soooooo predictable!
😆 😆 😆

Recoil

Hey Bro I don’t know why you are so concerned about the 35K model 3. Aren’t you a big fan on the Bolt and knowing that the 35k model 3 is coming it will only further reduce the dismal sales that the bolt is experiencing now.

Get Real

Yeah, mental MadBro might have to get a real job.

CCIE

He’s about as concerned about it as I am. It’s somewhat amusing and somewhat disappointing to see people believe Tesla’s false advertising. They cannot come close to making a profit on any $35k car, so they will only ship a token number to avoid being sued.

As for the Bolt, GM is upping production to help meet demand. Supplies (and therefor sales) have been low because it’s been selling out overseas.

Pushmi-Pullyu

Is there a special school that you went to, or does being a troll come naturally to you? Either way, you do it so very well! 🙄

antrik

They said they can’t make the $35,000 profitable *at current production rates*. They will be profitable with further production ramping.

Ziv

Keep telling yourself that. But it may not be true.

Pushmi-Pullyu

Well yes, those are the facts. Trolls and FUDsters hate facts!

John

Or they can buy a Bolt instead, right? Those are available right now.

Taylor Marks

You have to remember that only ~half of the initial reservation holders are in the US, and that almost all of the deliveries have been in the US, and that Tesla is going to focus very heavily on the US through the end of next year to maximize how many customers receive it.

I’d guess of the 420K deposits remaining, only 200K are US based. And the US number won’t grow anymore – they’ve now closed the doors on making a deposit from the US. At 5K per week, they’ll finish working their way through US deposits in about 9 months, by April next year. So there’s going to be plenty of quarter credits for people ordering base without a deposit – maybe some of those people will even get the half credit.

bro1999

I just find it funny someone could plop down $2,500 ($1k no longer enough) for a P3D today and get their car sooner than someone that waited hours in line on March 31, 2016 believing they could place a deposit on a base Model 3 and have it delivered in time to cash in on the $7,500 tax credit.
But hey, at least they got a drawing of a Model 3 and a diecast car for their troubles!

Sri

If the tax credit is all they wanted, they would have already bought a bolt

Recoil

You know what I find funny is that you even care about how much it costs to “plop down” to reserve a model 3 or the fact that no one is jumping the line as Tesla is not making the base model yet. Then again I could be wrong about you caring and you could have finally decided to upgrade to the model 3 and put an order in. If so my apologies.

Robert Weekley

And I waited in line, but have lost $14,000 direct Rebate, in Ontario! Who is worse off then? Americans waiting, or Ontarians?

John

Or both the P3D and base Model 3 buyers could buy a Bolt instead- AND pocket some extra change. Winning!!

Pushmi-Pullyu

@bro1999

How many times do you need to remind us that you’re very angry and upset that you wound up with a Bolt EV instead of a Model 3?

We got it, already. Move on with your life, dude!

Nix

Yes, you are correct, Tesla made it clear from the start that sales would focus on the US first before going to global markets. Many people in the EU have posted 2019 estimates from their reservation info on Tesla’s website, I haven’t heard anyone with a non-North America delivery estimate in 2018?

What is your source on the location of reservation holders? Tesla has never released any official information on reservation holders other than to release current totals a few times.

Will

Besides the leather interior that’s what a first gen volt is

Nix

Those aren’t hard questions at all. Already answered multiple times:

https://insideevs.com/tesla-pushes-back-standard-model-3-deliveries-late-2018-early-2019/

https://insideevs.com/musk-confirms-35000-base-tesla-model-3-still-6-months-away/

What does that have to do with my post? Do you actually have anything to say that actually has anything to do with my post?

bro1999

Yeah, my question was when *you* thought base Model 3s would start production, which is directly related to your post. We all know anything Tesla/Elon puts out about timelines can be tossed out the window. I figured you had more insight being the self-proclaimed Tesla expert you say you are. I guess I was wrong and you’re just an info regurgitater.

Pushmi-Pullyu

I see that in addition to being angry that you wound up with a Bolt EV instead of a Model 3, you’re also angry that Nix has a well-earned reputation for being both highly informative and almost always correct in what he posts.

It’s certainly understandable that you have a sour grapes attitude about the reputation you’ve earned here, Mr. FUDster. But you deserve no sympathy. You’ve made your bed, now lie in it.

bro1999

(again, directly related to your post)
Maybe now that Tesla has hit that 200k barrier, workers at the factory won’t have to pull 16 hour shifts while chugging Red Bull and walk through raw sewage.
https://www.cnbc.com/2018/07/12/teslamodel-3-workers-got-free-red-bull-walked-through-sewage-report.html

Nix

I’m sorry you are incapable of understanding what is and isn’t related to someone’s post, and that you have to resort to childishly stalking other posters with your endless stream of unrelated drivel. You are an embarrassment to yourself, and to Insideev’s as an Insideev’s contributor.

Gasbag

“factory won’t have to pull 16 hour shifts while chugging REd Bull”

Is that it? They are complaining that Tesla had a clogged toilet and that they get FREE Energy drinks??? Sounds like a first world problem.

John

I’d crawl through a Shawshank tunnel of raw sewage to buy a new Bolt!

Pushmi-Pullyu

“…workers at the factory won’t have to pull 16 hour shifts while chugging Red Bull and walk through raw sewage.”

Gosh, I’m sure that no toilet ever backed up at any other auto maker’s factory. Such things only happen at Tesla, right? 🙄

Sometimes the lengths to which a Tesla bashing troll will stoop in order to find anything bad to say about Tesla, are positively sickening.

Speaking of walking through raw sewage, Bro1999… that’s a pretty good description of what it feels like to read most of your comments.

antrik

Since Elon said that they need 5,000/week to be profitable, it’s not entirely meaningless whether they can sustain 5,000 or only 4,000… I agree though that it doesn’t make much difference whether they can sustain 5,000/week *today*, or only in a few weeks from now 🙂

Pushmi-Pullyu

“…the point of breathlessly awaiting weekly projections has lost much of its usefulness.”

Bravo, Nix! Someone needed to point that out.

Elon said quite recently that Tesla is now a real auto maker. It’s time to stop examining the leaves on a few trees; it’s time to step back and start looking at the entire forest!

EVShopper

It doesn’t really matter, as in the long run as they continue to ramp up production, this will just be noise.

BroncoBet

They continue to ramp down as the 5K was just PR,the Bloomberg tracker shows they never came close to 5K and are rapidly slowing down, can the get to 5K a week, next year?

HVACman

Troy’s much-more-sophisticated Order Tracker Spreadsheet at Model3ownersclub.com tells a different story. They estimate current production at only about 300 units/day, or 2,000 per week. They showed the 5K/week spike at the end of June, but then their estimates really throttled down from there. Troy’s model was very, very close to actual Tesla-reported Q2 production numbers last week.

Also of interest is the delivery estimates. July looks OK, but not huge. The estimate shows 2,871 units delivered to-date (as of 5 minutes ago.) That projects out to about 7,300 units for July. This is no where near consistent with average production of 5,000/week. Either tons of units going into inventory or they aren’t building them nearly as fast as many are estimating.

Finally, There are zero reports of VIN assignment for any M3OC member who configured for either an AWD or a P AWD. So nothing rolling off the line for retail sale yet in the AWD versions.

BroncoBet

Yes, 2K a week is in Tesla’s comfort zone,I don’t know why anyone would expect them to make 5K, tons are going into inventory snd they are slowing down, they have their bases covered.

antrik

Considering the four-day holiday at the beginning of June, it’s kinda obvious numbers throttled down…

Robert Weekley

I guess you meant “four-day holiday at the beginning of July”?

antrik

Indeed. Whoops 🙂

Pushmi-Pullyu

@HVACman:

Hey, thanks very much for the info! I find it shocking that Bloomberg’s production estimator is getting so much attention, when it’s been shown to be highly inaccurate. Good to know that somebody out there is doing a much better job!

The Order Tracker Spreadsheet at Model3ownersclub.com deserves a link:

https://teslamotorsclub.com/tmc/threads/model-3-order-tracking-spreadsheet.104996/

Terawatt

I hope this is right. There’s 4,3 weeks in the average month, so if the 5k rate is sustained we should expect nearly 22k for July. I’ll be glad if they manage 15k.

BroncoBet

I’ll guess 10,000 that would be a big plus for them.

Seven Electrics

Looks like Tesla has changed their non-refundable $2500 deposit into a “processing fee” so that they can now book the revenue before the car is actually delivered. That should give them a one time boost that will help with GAAP profitability.

John

Probably help them crank out some more new Model X’s. You should take a look at those.

Pushmi-Pullyu

Last I read, the deposit (whether it’s refundable or not) goes toward the purchase price of the car. Is that no longer the case, as you’re implying? Or are you just spewing out more anti-Tesla FUD bull pucky?

Given your serial Tesla bashing, I strongly suspect it’s the latter.

Seven Electrics

Holy crap. At least on the mobile site, Tesla has scrubbed all references to a $35K M3 price. It’s nowhere to be found.

They’re now calling it the “car of the future” which I find rather humorus. The $35K version is indeed the car of the future. And it always will be.

Nix

They moved all pricing information for the Model S and Model X to under the “order now” button too. What are you whining about now? A web page redesign? Did you expect the order now section would have prices for something you can’t order now?

What part of Tesla switching to actively selling the Model 3’s that they are building now don’t you understand?

Standard Range details are right there in the Specs section in the newly redesigned site. Nothing’s changed but a webpage revamp to drive customers towards putting in orders now for cars they are building now.

Seven Electrics

I challenge you to find “35K” anywhere on Tesla’s current site–under the “order now” button, or elsewhere. It was there this morning, and now it’s gone, even if you drill down to the standard battery details. This may be the death knell for the $35K price, though it sounds like they’re still going to make the standard range battery eventually.

Pushmi-Pullyu

Time to vote this troll off the island. His constant FUD is really disrupting meaningful discussion here.

Nix

You cannot “Order Now” a wide variety of Model 3 configurations. None of those configurations are under the “Order Now” button either.

The “Order Now” button is for items you can “Order Now” The “Order Now” is not for items you can order later. It is not possible to draw any conclusions about what you can order later from what is currently listed in the “Order Now” section.

How hard is that to understand?

Seven Electrics

The Bloomberg tracker? Really? The same tracker InsideEVs has derided as inaccurate in the short-term?

The best guess, from this croudsourced spreadsheet, is 2100 a week so far in July.
https://docs.google.com/spreadsheets/d/e/2PACX-1vSkckurdmbXt5Bh4dVenUhsjoal1Y6qRIkFBG_tcOhTxGp6xUL5j8DqkMPY0K9TfOCDz83A_7HGcQCl/pubhtml

Nix

The croudsourced spreadsheet also uses similar estimating methods as Bloomberg. Are you under the mistaken belief that every single person who buys a Model 3 fills in that spreadsheet?

Pushmi-Pullyu

It will be quite surprising if Tesla can maintain a production of 5000 per week. There is a clear pattern in the past: Tesla pulls out all the stops to maximize the deliveries/sales at the end of a quarter, using overtime and deferring needed maintenance until after the last car is made which can be delivered in that quarter. During the last end-of-quarter, Tesla upped the frenzy even more by pulling employees from not only SolarCity (which is now a division of Tesla) but even SpaceX (which isn’t) to help with Model 3 production!

Obviously the latter isn’t sustainable. So while it’s not impossible for Tesla to continue the very high rate of production it achieved during the last end-of-quarter during the following month — in this case, July — then it will certainly be the first time!