Tesla Factory Tour Equals Model X Mania



Tesla's Fremont Factory

Tesla’s Fremont Factory

Inside Tesla's Fremont production facility

Inside Tesla’s Fremont production facility

Recently, Motley Fool got one of those rare Tesla factory tours and, as usual with these tours, the Fool came away thoroughly impressed.

Here’s the opening graph from the Motley Fool’s write-up on the tour:

“If you’re looking for a glimpse into the bread and butter of Tesla Motors’ business, a tour of the electric-car maker’s 5.3 million square-foot factory will do the trick.”

The visit occurred on August 31st and here’s a condensed form of the highlights (see source article for more details):

A rapidly growing company

“Factory changes in the past year-and-a-half revealed a rapidly growing company. The upgrade was most evident in the scale of the new second body assembly line, where an army of recent red robot-arm recruits moved around to perform up to five tasks each. A whopping 580 robots on the body line are building Tesla’s Model X SUV…”

Tesla Model 3

Tesla Model 3

Tesla Factory Model X General Assembly

“…my third-quarter factory visit didn’t show signs of Model X production challenges. On the contrary, the company’s general assembly line, which is shared by the Model S and Model X, and doesn’t batch vehicle models in any particular order, easily had just as many Model X vehicles on the line as it did Model S.”

The missing piece

“Before Tesla started building its second body assembly line, you could seemingly drive a golf cart around near-empty parts of the factory for minutes at a time. Now the company is using all of the factory’s space, albeit much of it simply for temporary warehousing.”

But there may be an issue. According to Motley Fool, the factory appears to be missing “square footage dedicated to its late 2017-slated, lower-cost, higher-volume Model 3, which Tesla anticipates will help take the company from an annual production rate of 100,000 to 500,000 by 2018.”

In regards to the Model 3, Motley Fool adds:

“…Tesla has already made some preparations for the Model 3. Its new paint shop, which Tesla doesn’t show the public, is capable of painting up to 10,000 vehicles per week. Tesla’s stamping center for Model 3 is also already on the line…”

“However, there was no sign of construction of the new Model 3 body and general assembly centers that Tesla says it will begin before the end of the year.”

Apparently, the lack of preparation for the Model 3 is was expected though. Until Tesla raises additional funds (expected sometime later this year), the automaker won’t ready tooling and production equipment for the Model 3. So, the ability to build the game-changing car relies upon Tesla’s ability to raise funds.

Again, you’ll find more details on the factory tour at the source link below.

Source: Motley Fool

Categories: Tesla


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27 Comments on "Tesla Factory Tour Equals Model X Mania"

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I really hope that the “Inside Tesla’s Fremont production facility” image is not representative. That is terrible. Poorly lit, poorly stocked, messy. I would not want to build one car a day in such a facility, much less the thousands they would need to keep the fancy paint facility humming near capacity.

That looks more like a snagging area rather than a line.

Maybe you should adjust your zoom.

Have you ever been in a car factory that was not prepped for a photo shoot before? They all look like that.

This is a preproduction or prototype area. This is not representative of a real line which relies heavily on outomation.

I wouldn’t put too much stock in how well (or poorly) lighted that area appears to the camera. Cameras generally need a lot more light than our eyes do, which is why they are equipped with flash attachments, and why indoor professional photography usually involves high-intensity lighting.

If you were there in person, it might appear much more brightly lit.

Click on the link to the original Motley Fool article. Lots of production line photos that may be more representative of the line.

The photo dosent do it justice I kno, zoom in and you’ll notice light is directed where it’s needed, tesla is smart like that.

If you read the article, they said that a portion of the factory that was empty is now taken up by some production lines, but also part of it, for the time being, is “simply for temporary warehousing”. I think you are seeing the warehousing part.

I’ve seen many, many pictures from the press and from individual tours, and the actual production lines are clean, extremely well-lit with natural and artificial light, and spacious.

“Now the company is using all of the factory’s space, albeit much of it simply for temporary warehousing.”

“the factory appears to be missing “square footage dedicated to its late 2017-slated, lower-cost, higher-volume Model 3”

So… the author was paying attention, right? What’s in the boxes that they’re “temporarily” storing things? Gee, I wonder…

So, Model 3 relies on funding that has not been procured yet?


Note Elon’s recent admonition to Tesla employees to minimize non-recurring costs over the current financial quarter, to make Tesla’s next quarterly financial report show a net positive cash flow. Tesla needs a good “balance sheet” result to show investors, so they can get favorable terms for borrowing the billions of dollars Tesla needs for building the Model ≡ production lines, as well as finishing the build-out of Gigafactory 1… and possibly even building a second auto assembly plant.

Tesla is going to need to borrow a lot of money over the next 2-4 years. Huge wodges of cash!

I do not believe the initial Model 3 launch volumes need additional funding. However, Tesla is scaling well beyond initial launch volumes and will be spending money for that additional production capacity concurrent with the initial launch of the Model 3. They advanced their build capacity plans by 2 years. That’s why they need the additional funding. For example, they are building parts of the Gigafactory now for production capacity they won’t need until the well into 2018, which is the original 2020 expectations.

Musk said so back in May. After the crazy rush of $1k reservations for the car, it was decided to shorten their timeline by nearly half, which required a capital raise.

As of Q1 2016, they were not planning a capital raise for Model 3 production.

Ton, do you realize how much cash they need even if they didn’t get those pre-reservations? Perhaps this whole thing is a mounting pile of hype being pushed up hill. The issue is 2.4 Billion of raw cash are needed in 2019 and 2020. Much like the “we paid DoE loan back 9-years early” – which they did by issuing $660M of new convertible bonds – they can pay back 2019 – 2021 bonds through issuance of new debt. If the debt market is open to them. And if they survive until then. So, they have this “thing” called the Model 3 reservation “list” that now they will not reveal how many they actually have on the books. Last time it was visible, was 373,000 fully refundable reservations. THey will not offer how many Model S or Model X reservations from named customers they have. They will never admit as to when the backlog of those is caught up. So, basically, they need to issue more stock generally just to survive. Why not put a label on the next round of stock sale as “Model 3 hurry-up financing to build out the line faster than we planned”. If you work… Read more »

You haven’t done your analysis. Selling 500K cars per year in 2019, plus whatever the hell they’re selling with the battery business, makes enough money to pay off the bonds. Really the only issue is getting through to 2019.

In Aerospace – we keep hearing these terms ‘Build to Book’ – which means – how fast are we building the planes, and how fast are we booking new orders?

So – the Question about the actual number of the 373,000 Model 3’s and the Model S and X Current Order Reservations – is a ‘Build to Book’ type of Question, then.

Of course – there is only ‘Book’ currently for the Model 3, and even that – is more like ‘Planned Book’ as they are not fully paid for orders at this point!

But – for sure – it would be good to know the ‘Build to Book’ on the Model S, and separately – on the Model X. It would be great if that was a number required to be listed in the quarterly report, specifically, but – I do not know if it is, by law.

So – if not required by law – then – only by what they offer do we get a sense of this matter.

Tesla may do better seeking capital, if the SCTY merger is stopped. There’s no way institutions will have the same view toward participating, regardless.

Why? Your post makes no sense. The merger was paid for by stocks, and it allows Tesla to sell even more diversified portfolio of products related to EV / Home Ownership / Sustainable Energy.

Anon, I could not agree with you more, but if you read all the twaddle that financial pudits are writing about the Tesla/SolarCity merger, they all agree with pjwood1. S/he may just be repeating what s/he reads and I agree with you that the synergy between the 2 companies is blindingly obvious. Unfortunately that may not matter if all the lenders are a bunch of corrupt, gormless, blinkered loons (and, based on what caused the 2008 crash, that’s about as good a description of the Western World’s financial markets as you will get).

Financial markets are irrational and hysterical. Don’t expect them to support a clean energy company over fossil fuel industry.

If they are hysterical, they can support it more if they can get more hysterical government incentives laid out. Such as $10,000 EV car rebates (and not ITC). Such as 5-year extension of the 30% ITC for renewables – the same 30% that they gave to kick start the industry when solar was way over $6/Watt installed – and today it is $3/Watt due to glut.

So, effectively, money is like water – it chases “easy deals” and “sweetened pots”. Incentives can make or break the combo company.

Imagine the future value of a combined TSLA/SCTY if both 7500 EV ITC and the 30% ITC for solar went away immediately.

Or…Imagine the value of oil companies, monopolistic utilities with lot of fossil fuel electric plants and incumbents ICE car makers if all the CO2 produced by theses plants and ICE vehicles would be taxed at a fair price for all the health and environmental damages they have caused all long the last century and they will caused all along this century, suddenly. Sure, making such decision would be a political suicide for all the guys at Congress (no more money for election campaigns (for only the legal part all this game))but a proof that, after all, that we are an intelligent specie. That mean, a specie that is not drove by our primitive instincts of controlling the other members of our specie, like alpha male animal instinct (by pursuing power at all costs) and of acquiring the most of resources or territory possible like animals do (by pursuing money and assets at all costs, even by illegal or immorally ways and means, and by exploiting other people and their weakness).

Without ITC TSLA/SCTY is dead and that is exactly what strongman Trump will do eliminate ITC.

pjwood1 is correct regarding this subject. The SolarCity deal has soured investors on Tesla; that was pretty clearly signaled in the approx. 10% drop in Tesla’s stock price.

One doesn’t have to agree with Martin Winlow when he says “lenders are a bunch of corrupt, gormless, blinkered loons” to see that Tesla is now going to have to pay a higher average interest rate on borrowing money, due to the SolarCity deal.

Whether or not one thinks the SolarCity deal will prove to be good for Tesla in the long run, certainly in the short run it was very poor timing for Tesla to buy out SolarCity, and thus shoulder the financial burden of its long-term contracts with existing customers. Right when Tesla needs to borrow more money than ever before, is not the time to be adding substantial debt which, at best, won’t pay off in the short term.

All solar stocks are in the toilet right now, despite the fact that this year is projected to yet again beat global year-over-year records in installations of solar PV capacity. I’ve been (modestly) investing in green energy for the last 6 years, and even before Solyndra’s failure, the financial gurus continually treat solar PV as a passing fad, even to this day!! Any time anything happens in the markets, even if it has absolutely nothing to do with the companies themselves, their market or their resources, solar stocks plummet, the fly back up again after the panic was over. Right now, the problems causing solar stock prices is the increasing number of state laws that are hostile to residential installation of solar PV, particularly in the most lucrative states, like Nevada and Arizona. SunPower manufactures and sells the best panels in the business (X-series) which are overall the most efficient on the market (including better low-light performance) and are the most durable on the market with 25yr warranties. Yet, their stock has fallen from the $30s to the single-digits over the last year or so. Makes no sense. Solar City stock has lost over 2/3 of it’s value even before… Read more »

Tom, Solar is in the toilet due to oversupply and our propensity to buy cheap from China. Their government supplements costs even more than ours does to create supply of Solar components. China also has the largest single-site desert-based solar farm in the world.

SOlar has commoditized. That means, lower profit potential. Invest in something that can make a comfortable profit.

EVs are going to go wide-spread. Their profit margins will certainly shrink. Investing directly in Solar and directly in EVs is going to play out as they become commoditized further (lower costs, lower prices).

A run-up stock like TSLA or SCTY (to its $80 range) will not happen again in either industry. Faraday Future, Elio, whatever. Unless we get a signal that oil is running out faster than we thought, other EV companies won’t get the wall street treatment like these Musk joints did.