Tesla Q3 Earnings: Model 3 Production Schedule Pushed Back 3 Months

2 weeks ago by Eric Loveday 168

Tesla Model 3

Tesla Model 3

The highlight from this earnings report is one we all saw coming. The Tesla Model 3 production schedule is being pushed back.

As we listen in on Tesla’s Q3 conference call for further information to be posted in the coming hours, below we’ve decided to highlight a few main points from the earnings report, as well as attaching it in its entirety.

Here are some key points (via Yahoo):

  • Tesla reported its largest quarterly loss to date
  • Adjusted loss per share: -$2.92 (-$2.23 expected)
  • Revenue: $2.98 billion ($2.39 billion expected)
  • Free cash flow: -$1.4 billion (-$1.2 billion (expected)
  • Surpassed 250,000 vehicles delivered since inception

Tesla to produce less Model X (and Model S) than originally anticipated to devote more resources to the Model 3

In regards to the Model S and X, Tesla stated it will produce 10% fewer in an effort to put more resources into Model 3 production.

As for the Model 3, Tesla openly admitted to being some 3 months behind in hitting a production rate of 5,000 units per week.  Tesla said to expect that level to now happen in late Q1 2018.

Editor’s Note:  We’d like to take a moment to say (and self-congratulate) that we forecast both that Tesla production targets for the Model 3 had apparently been moved back a full quarter AND that current EV production would be scaled back to assist with the Model 3 during our monthly US sales recap.

 Tesla noted on the current Model 3 production targets:

While we continue to make significant progress each week in fixing Model 3 bottlenecks, the nature of manufacturing challenges during a ramp such as this makes it difficult to predict exactly how long it will take for all bottlenecks to be cleared or when new ones will appear. Based on what we know now, we currently expect to achieve a production rate of 5,000 Model 3 vehicles per week by late Q1 2018, recognizing that our production growth rate is like a stepped exponential, so there can be large forward jumps from one week to the next. We will provide an update when we announce Q4 production and delivery numbers in the first few days of January.

Tesla Model 3

Tesla Model 3 production targets taken down thanks (mostly) to Gigafactory issues

As the 10,000 per week production goal, that has been put into a limbo of sorts:

“With respect to the timing for producing 10,000 units per week, it has always been our intention to implement that capacity addition after we have achieved a 5,000 per week run rate. That will enable us to make the next generation of automation even better while making our capex spend significantly more efficient.

Demand for Model 3 is not going to be a constraint for quite a long time. The global net reservations for Model 3 continued to grow significantly in Q3. In Q3, we delivered 25,915 Model S and Model X vehicles and 222 Model 3 vehicles, for a total of 26,137 deliveries.”

As for why the missed targets, Tesla clearly outlined the issues:

“To date, our primary production constraint has been in the battery module assembly line at Gigafactory 1, where cells are packaged into modules. Four modules are packaged into an aluminum case to form a Model 3 battery pack. The combined complexity of module design and its automated manufacturing process has taken this line longer to ramp than expected.

The biggest challenge is that the first two zones of a four zone process, key elements of which were done by manufacturing systems suppliers, had to be taken over and significantly redesigned by Tesla. We have redirected our best engineering talent to fine-tune the automated processes and related robotic programming, and we are confident that throughput will increase substantially in upcoming weeks and ultimately be capable of production rates significantly greater than the original specification.”

 

Tags: , , , , , , , ,

168 responses to "Tesla Q3 Earnings: Model 3 Production Schedule Pushed Back 3 Months"

  1. F150 Brian says:

    I wish them luck. I also wish Musk would provide realistic expectations, not flood the airwaves with unrealistic hopes and dreams. It was nice a few years ago but I’m getting tired of it.

    Now, when am I going to (realistically) see a “next level” pickup 🙂

    1. Alan says:

      Not in this decade !

    2. (⌐■_■) Trollnonymous says:

      “Now, when am I going to (realistically) see a “next level” pickup”

      2021.5

  2. William says:

    Ouch!
    No big deal, Model Y will be better, I’m hoping but not expecting.

    1. Will says:

      Yeah wait for the Model Y in year 2022

      1. Will Davis says:

        Too many Wills here!

    2. JyChevyVolt says:

      Y is 3 (Elon) years away. Will be built in China, after another round of cash raise from investors (Chinese suckers).

      1. Nix says:

        Only the Model 3 and Model Y that will be sold in the China market will be built in China. And the factory being 3 years away won’t have any impact on the schedule for Model Y’s built for other markets.

        You have falsely conflated what Tesla is doing for the Chinese market, with what Tesla is doing for US and EU markets. They are not the same.

  3. mjp462 says:

    So, when EM says 5,000/week in ‘late Q1’, does that really mean ‘maybe April, maybe May?’

    My estimated delivery time has not changed, and that is most likely bs.

    1. Murrysville EV says:

      My delivery date – which I’ve always doubted – was to be Dec 2017 to Feb 2018.

      At this point, I’m thinking next August. And I don’t know if I’ll wait that long.

      1. M, What’s the Rush? Later is better: for Build Consistency, for included AP Performance, for saving Cash, etc! Unless you have an Expiring Current Lease Deadline Issue!

      2. My preliminary delivery is ‘Late 2018’, so any cancellations folks like you make, just bring me closer, so, it’s up to you!

    2. wavelet says:

      You forgot to say April or May of what _year_? only half joking …
      ~2 years ago (Aug. 2015), the official Tesla/Musk target was “500K vehicles/year in 2020”. That already seemed incredibly aggressive, and advancing the target by two years just a year later (500K in 2018) seemed completely unrealistic, given the Model X targets hadn’t been met.

      I truly don’t get it. Even 200K in 2019 would have been impressive, given the failure to reach the 2016 target (84K instead of 90-100K).

      At some point the market’s going to stop treating a public company with 33K employees like a startup. The next circle of potential
      buyers, being more mainstream, certainly won’t put up with multiple delays like this.

      “Demand for Model 3 is not going to be a constraint for quite a long time.” — I wouldn’t be cocksure about that. Another 6 months of delays, and people are going to buy other EVs. The reservations aren’t orders after all, and shouldn’t be treated as such.

  4. scott franco says:

    Unstated ANYWHERE in this is actual deliveries of M3s to date. What Tesla did say, if you look at it, is that the rumor mill generates more accurate news about Tesla than Tesla itself.

    That is not good.

    1. Shane says:

      Elon said he didn’t want to disclose current production. He did, however, say the battery assembly station two Is in the process of being completely reprogrammed and station one will be looked at later. Interpretation: current Model 3 production is zero.

      1. unlucky says:

        “I don’t want to” has no place in a public company.

        If you don’t want to talk to anyone about what you’re doing then don’t sell shares to the public. But once you do you can’t keep your shareholders in the dark just because you don’t want to say.

        Production levels are material information. They are not fulfilling their disclosure requirements by not reporting them.

        1. Nix says:

          Tesla is under absolutely zero obligation to report any build numbers other than quarterly build numbers. They absolutely report all of their quarterly build numbers in their quarterly reports as required by the SEC.

          They have no obligation to give any other numbers outside of their quarterly report, nor have they ever provided numbers outside of their quarterly report.

          Why do you keep fabricating falsehoods about what Tesla “must” do for shareholders? This is the second time in less than a week that you’ve fabricated a requirement that doesn’t exist anywhere in the law.

          Is this your new meme? Make up fake obligation strawmen, and then pretend Tesla has done wrong by not living up to your fake obligations you fabricate?

          1. unlucky says:

            This is a quarterly report. Hence the obligation to provide the quarterly build numbers.

            1. Nix says:

              Which is EXACTLY what they provided in the report. The quarterly numbers. But we already knew those numbers a month ago. They reported how many Model 3’s were built in July, August, and Sept. He is asking for year to date, which would include Oct.

              They were never going to announce those numbers.

              “In Q3, we delivered 25,915 Model S and Model X vehicles and 222 Model 3 vehicles, for a total of 26,137 deliveries.”

        2. Four Electrics says:

          They’d be sued by shareholders, but there is no point: Tesla has no money for compensation. One can only hope the SEC will step in.

          1. Nick says:

            Yea. Multi billion manufacturing business with many factories, stores, super chargers, parts inventories, and loyal client base. Where would they ever find the money to settle a civil matter?! 🤣

          2. Nix says:

            Sued for what? For only giving Q3 build numbers in their Q3 report, and not reporting full year to date numbers that would include Oct. Q4 numbers?

            You guys are nuts. You need to figure out the difference between Q3 and Q4. There are no credible shareholders who thought they would get year to date numbers that include Oct Q4 numbers instead of just Q3 numbers in the Q3 report.

            Or do you nutters not understand what year to date means? Or don’t understand what month we are in? What is your glitch? Pure willful ignorance, combined with a willingness to parrot whatever idiocy you encounter without applying any thought?

    2. Nix says:

      This report was for Q3 ONLY, which does not include October. October is Q4. They are not going to confuse the issue by reporting partial Q4 numbers in the middle of their Q3 report.

      Nor has Tesla ever announced partial numbers of deliveries before a quarter is over.

      I’m sorry you are not familiar with how Tesla reports their numbers. Please read the section in the monthly scorecard for Tesla that explains all of this.

      1. unlucky says:

        Okay. Fair enough. I guess I was confusing them not providing quarterly numbers with not providing numbers at all.

        Although do note if the figures are sufficiently far off from what was expected that it constitutes a material difference then they have the responsibility to report this as soon as they know it. So the shareholders could sue and say Tesla withheld material information.

        Of course that doesn’t mean they would win.

        1. Nix says:

          I’m beginning to think you haven’t actually read the report. I suggest reading it first, and then coming back to comment. It takes like 7 minutes to read if you don’t dig into the tables. I highly suggest it.

          As for any lawsuit over production numbers, get the heck out of here. Not only does Tesla include verbiage in their 8-K and 10-K reports specifically warning investors that they may not hit ramp-up targets, Tesla hasn’t actually promised anything. They have only announced TARGETS.

          If you are an investor and you confuse a target that specifically has an investor warning, with a promise, you should invest here:

          http://www.depositaccounts.com/savings/childrens-savings-accounts.html

          1. unlucky says:

            I conceded that it was my error confusing not providing quarterly numbers with not providing any at all.

            And you now have a problem with this too? How?

            And no warning about “things may change” covers a situation where the company does not inform of a material change.

            If there is a material change and they do not file another 8-K with the new information then they can be held liable. Even if their predictions said that things might change.

            1. Nix says:

              They didn’t give any official guidance on Q4 production and sales numbers. In fact, they specifically REFUSED to give guidance in the Q2 results call specifically explaining that the ramp-up was so highly unpredictable that guidance wasn’t possible for the Model 3 in Q4.

              So no, they don’t have to report that they won’t hit guidance that they never gave, and refused to give, and explained the risk of why they would not give Q4 guidance.

              1. unlucky says:

                The CEO tweeting out guidance online counts as guidance. Giving information and claiming it is not info is not sufficient to make it not info.

                Even if they merely said “we think we can [item] in [timeframe]” as soon as they feel they cannot they must disclose it if [item] materially affects their business. And certainly Model 3 production materially affects their business.

                No amount of forward disclaiming insulates them from having to update when their statements about the future are now known to be wrong if those statements about the future are about things material to their operation/profitability.

  5. WadeTyhon says:

    “To date, our primary production constraint has been in the battery module assembly line at Gigafactory 1, where cells are packaged into modules. “

    That certainly gels with what we have been hearing.

    Cutting S and X production is something I did not expect. Is that for next year? This quarter? Until production is ramped up? Or permanently?

    1. Nix says:

      The letter gives conflicting information. Because they say net orders are actually up for the S/X, and they are set to make records in Q4.

      My best guess between the conflicting information is that they are projecting just over 24K Model S/X sales in Q4, to set an all time record of total yearly deliveries at approximately 100K. Significantly up from 2016.

      That’s the best I can figure out of the conflicting information.

      1. Doggydogworld says:

        What conflicting information? The letter says orders are up and they expect Q4 to have record sales for S+X (~27k, based on guidance).

        In the call they said they are reducing S+X production roughly 10% in Q4. The additional sales will come from inventory, which they said was too high.

        1. Nix says:

          The conflict between production and sales numbers I guess. The conflict between projecting record sales and reducing production by 10%.

          I had production numbers at 24K, but I based those on Q3 sales, and not Q3 production, and I didn’t factor in anything for inventory. So now I’m not sure on that number. I’m actually not even sure at this point if there is enough information available to calculate everything. I’ll have to revisit tomorrow.

  6. unlucky says:

    It looks more like it should say pushed back an additional 3 months. Because end of Q1 means 3 months from next month, while Tesla originally hoped to reach these production levels this month or last.

    This is a 3 month push on top of their day-by-day slip to this point.

    Also, it’s still distressing that people go along with highlighting Tesla’s non-GAAP figures. Their actual loss is -$3.70. And the difference isn’t things like “goodwill”, it is real, non-recurring losses.

    1. Nix says:

      No. 5K/month was always a target for the end of Q4 2017, not the beginning. In fact Tesla gave absolutely no guidance at all for Oct. or Nov.

      Actually they didn’t even give guidance for the whole month of Dec either. They just said the target was 5K/week by the end of the year. That technically could have been by the middle of the month, with a steep jag in the middle of the month and lower numbers in earlier weeks. Tesla has been very clear that while the graph is smoothed, that the actual delivery rates will be jagged.

      1. unlucky says:

        I don’t agree with your summation.

        https://electrek.co/2017/07/03/tesla-model-3-production-ramp-up/

        There is Tesla making their first downward revision. They had previously said 5K in September and hopefully 20K in December.

        Now he says 5K in March (end of Q1). That is a further slip, not a 3 month slip. December would be a 3 month slip.

        1. Nix says:

          We are going to split the middle on this. I was wrong about the Dec. number, it is indeed 20K. My bad. And you are wrong about hitting 5K/week at any point before Dec. You are falsely conflating two different numbers:

          1) Schedule for parts deliveries from vendors
          2) Schedule for completed cars coming off the production line.

          Those are not the same. Elon talking about parts delivery targets, absolutely is not the same as Tesla’s targets to manufacture complete cars.

          Although I’ll give you a complete pass on this one, because those numbers have been wrongly conflated over and over. Like in the source you quoted. They were wrong to conflate the two, and you are just getting caught in their mistake.

          There has only ever been one estimate on what month completed cars would reach 5K/month, and that is Dec.

  7. Bro1999 says:

    TSLA stock taking an after hours POUNDING. Ouch.

    1. Mister G says:

      If it drops to $150 per share I’m buying

      1. JyChevyVolt says:

        If it drops to $150, then Tesla is about to go bankrupt. Realistically, under $300 is a good buying opportunity.

    2. Nix says:

      And yet still up around $100 dollars a share over this same time last year.

      Volatile stock is volatile.

  8. Someone out there says:

    Gross Profit: $449M
    SG&A: -$653M

    Ok then…

    1. Nix says:

      Yes, this is what happens when you spend money up front to launch a new product, and don’t sell much of that product in that quarter. This is exactly what was expected for launching a new major product.

      With a projected ~1,600 sales, were you ever expecting them to recoup all the money they spent this quarter launching the Model 3, and all the superchargers and new service centers and support and mechanics and factory workers, etc?

      1. Someone out there says:

        Sure, that’s what it is…

        1. Nix says:

          Read the report. The service centers, the mobile vans, the superchargers, destination chargers, the additional employees, it is all in there. Too much to quote here.

  9. Ron M says:

    Musk had two failed SpaceX launches before nailing the reusable rocket and it was make it break for Elin. This year SpaceX has had 16 successful Flacon 9 rocket missions with 3 in the month of October. So while it’s not good news it’s certainly not the end if Tesla just a minor inconvenience.

    1. Pushmi-Pullyu says:

      Hmmm, I think you’re conflating two things.

      There were, if I recall correctly, three failed launch attempts before the first SpaceX rocket achieved orbit, and the fourth was indeed describe as a “make it or break it” attempt. Another failure would have bankrupted SpaceX.

      Not so with the attempts to develop a reusable booster rocket. SpaceX was going to continue trying that until they succeeded. It was merely a matter of how often they could afford to try. If you read an article which asserted or implied that any single attempt at landing the booster stage was a “make it or break it” attempt, well that was sensationalism on the part of the reporter or editor.

      1. Ron M says:

        I stand corrected I was trying to remember the events when Musk nearly went bankrupt and yes it was two or three failed attempts to get a rocker in orbit.
        Thanks for helping keep the facts straight.

  10. (⌐■_■) Trollnonymous says:

    Just start building already.
    Get the bugs out before I buy in 2020……lol
    😛

  11. Ben says:

    “key elements of which were done by manufacturing systems suppliers, had to be taken over and significantly redesigned by Tesla. We have redirected our best engineering talent to fine-tune the automated processes and related robotic programming”

    “we are awesome, others are to blame”
    I just can’t listen to this stuff anymore…

    1. unlucky says:

      It is kind of crazy. If it involves batteries and Panasonic can’t get it to work in a reasonable time chances are it’s a difficult task or else you didn’t actually allocate a reasonable time.

      Bringing it in-house might work but it doesn’t mean the root of the problem was it wasn’t in-house before.

      1. Nix says:

        well, we’ve been flooded in the comments sections of multiple stories from a Panasonic insider saying that Panasonic’s employees from Nevada aren’t up to speed. If that is the case, I’m not sure why you would be surprised that Tesla would take it away from them and do it themselves?

        1. unlucky says:

          I didn’t say I was surprised. What I said was that just because they take it in-house doesn’t mean the problem is it wasn’t in-house.

          You read the same comment sections as I did. There is no indication Panasonic isn’t competent. The problem appears to be that the location in the Gigafactory is the cause, not Panasonic. Tesla has to deal with the same conditions, the same available workforce as Panasonic.

          1. Nix says:

            apparently we didn’t read the same article. Because the problems I saw reported by that source were only partially because of location. The other factor I read was an incompetent layer of management and employees that were hired from Nevada that are failing the competent Japan management.

            I went and read the complete original posts made by the supposed employee directly from his feed. Did you read those, or just a story summarizing some of his points?

            1. unlucky says:

              ‘The other factor I read was an incompetent layer of management and employees that were hired from Nevada that are failing the competent Japan management.’

              Yes, we did read the same comments. He said the incompetent layer of employees and management were hired locally. Tesla has to deal with the same local pool of employees as Panasonic.

              Sure there were other things like language barrier. Tesla won’t have that problem in the same way. But he also says the language barrier is such a big problem because the people hired are basically completely unknowledgeable about production. If they knew what they were doing it wouldn’t be as hard to get the few specifics they need across.

              So even if Tesla brings production in house and the problem is fixed it doesn’t mean the problem was due to being not in-house. I fully expect them to bring it in house since it wasn’t working before. But that doesn’t mean if Panasonic didn’t face the problems presented by the location (chosen by Tesla) that Panasonic wouldn’t have gotten it working before it had to be taken in-house.

              Panasonic isn’t incompetent, the poster says all the local people they hired are.

              1. Nix says:

                Well, apparently Tesla has done a better job at hiring, training, and managing employees hired out of the same pool of workers. Because the stages that they were in charge of aren’t the ones with the problem.

                Also, Tesla has already done the entire pack building process themselves for years with the Model S and X, so they already know how to do it.

                Between prior history of success at Tesla, and the current history of success by Tesla employees at the Gigafactory, the evidence is heavy that in-sourcing it IS the solution to the problem.

                Nothing against Panasonic. They are a good company. But they have never built a Tesla battery pack, and they are the ones who messed up their section of work, not Tesla. I’m sure they do great things. These employees at this location didn’t.

                1. Nix says:

                  Oh, and the location is the same for the steps done successfully by Tesla hired, trained, and supervised Nevada employees. So location isn’t the deciding factor for why some steps failed and others succeeded.

    2. Nix says:

      So are you saying that they are lying and didn’t have to take over from a supplier? Or are you just complaining that they actually had to take over from a supplier?

  12. Pushmi-Pullyu says:

    Three months behind on TM3 production. Ouch! I was hoping it was only two.

    Looks like my guess, made around July of this year, of ~20,000 Model 3’s produced (not necessarily delivered) by the end of 2017, was too optimistic. 🙁

    1. Nix says:

      Yea, me too. I was hoping for somewhere between a 1-2 month delay. I’d already baked 1-2 months into my guess on 2017 numbers.

      Even as of the story about the supplier leaking the reduction in parts to 3000 a week in Dec meant that Tesla might produce at least 2500/week in Dec, with maybe Oct+Nov production averaging another 1250/week (heavy on Nov production).

      3 months sucks and likely kills any chance of getting even half way to those numbers, but isn’t the end of the world.

      1. Spider-Dan says:

        To be clear on what this means:

        Model 3 “deliveries” started at the end of July, 3 months ago. Tesla is “3 months behind” on production. That means Tesla has not made ANY progress on production since the Model 3 release.

        If your process is so borked that you have not made any progress in 3 months, that does not in any sense mean that a month from now, you will be where you should have been in August. It means Tesla is stuck at the very beginning of the process and cannot get off the ground.

  13. Ray says:

    “With respect to the timing for producing 10,000 units per week, it has always been our intention to implement that capacity addition after we have achieved a 5,000 per week run rate.”

    For a bunch of engineers, they are not the brightest bulb. Did they think we were expecting them to produce 10,000 a week, then go backwards to the 5,000 a week? Of course the 10000 would be after they achieved 5,000, how is that even a statement?

    1. Pushmi-Pullyu says:

      Yeah, that one has me scratching my head, too. “We will achieve a run rate of 5000 per week before 10,000” is rather a tautology, innit?

      If that was a verbal statement, then perhaps someone got confused about what he was saying, or misunderstood directions he was given from the PR department. If it was issued as a written statement… well then, it’s sheer incompetence on the part of the PR department to publish something that poorly written. Possibly a result of last-minute editing, but someone should have given it a final check before it was released.

    2. Nix says:

      They are saying that the 10K rate will be delayed proportionally to the delay in getting to the 5K rate.

      In other words, they are saying that they aren’t going to make up time after hitting 5K, and magically hit their original summer of 2018 target for 10K. They are pushing it back to probably around Fall 2018, without actually putting a firm date on it.

      They are trying to announce a delay without actually announcing how long the delay will be.

    3. Doggydogworld says:

      They have installed a line with the capacity to make 5k cars/week. The line is running at a tiny fraction of capacity. Once they get the line running reliably and efficiently at full capacity (was to be 12/2017, now they say 3/2018) they will decide how to expand capacity to 10k/week.

      We’ve known for a while the second stage of expansion wouldn’t occur until 6-9 months after they stabilized the first stage a 5k/week. They never told us what the second stage would be. I don’t think they completely know at this point. A duplicate line is the normal way of doing it, so we can count that out 🙂

      1. Nix says:

        In the conference call they talked about not having to spend much capex to go from 5K to 10K. They talked about kicking robots around to get more speed. I’ll have to relisten to that part, my notes weren’t that good for that part. But I don’t think they are planning on a full second line.

        They may have talked about adding some robots for individual slow tasks, but I’ll have go go back and listen again.

  14. Mister G says:

    GO TESLA GO YOU STILL HAVE MY SUPPORT
    ALL THE NAYSAYERS, DOUBTERS, HATERS, AND WHINERS CAN KISS YOUR LILY WHITE ARSE AND BUY A BOLT LOL

  15. ModernMarvelFan says:

    “In regards to the Model S and X, Tesla stated it will produce 10% fewer in an effort to put more resources into Model 3 production.”

    Wait, why? I thought they have separate production lines. If they need more people on the Model 3 line, doesn’t that mean they are still doing much of “manually” building the car? I thought they would have hired enough people to have a separate line. Maybe they are short staffed after all the “firing”. =)

    1. DJ says:

      Ya, I don’t really get this. Let’s not sell as many higher gross margin products as we can so that we can work out the kinks with the lower margin products…

      The delay shouldn’t really be a shock to anyone. So far the Model 3 has had a rocker launch than the Pacifica Hybrid. A friggin Chryler product which you completely and totally expect it from!!!!!!!!!

      1. pjwood1 says:

        Tesla is “Osborne” territory, with this delay. How do you tease a 334 mile, $44k car, and not expect sales at twice the price and the same range to be impacted?

        I get that Model S and Model X are very different cars, but any fraction of ~400k would have a big impact on 26k. In this case they’ll probably wait, and that puts a wrench in cash flow.

        1. Nix says:

          That is exactly what Tesla had thought too. They planned on lowered S/X numbers, but the opposite is happening:

          “During Q3, we received record net orders for Model S and Model X, setting the stage for what should be an all-time record for deliveries of these vehicles in Q4.”

          Here is how they explain it:

          “Model S and X combined net orders in Q3 also hit an all-time record in our North American, European and Asian markets individually, driven primarily by increased awareness of Tesla from the Model 3 launch and the addition of new stores internationally”

          They are getting a reverse Osborne effect. Their newer product is driving more customers to their existing lines of products.

          1. pjwood1 says:

            But quarterly deliveries of S&X have been relatively flat, at 22k-26k, for about a year. This may be a record quarter, but I wouldn’t exactly call it a fraction of 400,000 that’s jumping onto the tally.

      2. Tom says:

        How to now you might not be performing up to par….you are bested by Chrysler. Ouch.

    2. Someone out there says:

      Because demand has been waning. That’s the real truth. That is why sales have plateaued for 6 quarters now. Tesla has been producing inventory cars for a while and I guess they are getting more than enough of them now also.

      1. Nix says:

        Nope, demand is up and they are projecting record Q4 on record orders:

        “During Q3, we received record net orders for Model S and Model X, setting the stage for what should be an all-time record for deliveries of these vehicles in Q4.”

        1. Someone out there says:

          Demand is up and they expect record sales in Q4 so therefore they will cut production back 10%? Come on now, you can’t be that juiced up on Kool-Aid?

          1. Nix says:

            The best I can figure is that they are targeting around 24K deliveries in Q4, for a record yearly sales of approx 100K units, beating last year’s total sales by around 20-25K units with limited Model 3 sales included.

            That’s somewhere between 25-30% growth rate in a general ICE car market that has otherwise shrunk in 2017. They will likely gain more than 30% market share compared to 2016 in the market segments where the Model S and X compete with ICE vehicles if the trend in dropping ICE sales holds.

            1. Nix says:

              NOTE: I’m going to have to recalculate this tomorrow to account for differences in production, sales, and drawing down inventory. I think I may have underestimated sales.

        2. Tom says:

          So how does that statement jive with the statement that they are reducing production by 10% in order to focus on M3 (which is a confusing statement at best)?

          1. Nix says:

            From the best I can figure, they will beat 2 records in Q4, even while cutting production numbers by 10% between Q3 and Q4:

            1) Record number of yearly deliveries.
            2) Record for most deliveries in any 4th quarter

            They should be able to accomplish this with a 10% cut, down to around 24K units.

            Both represent strong growth in overall demand compared with previous Q4’s and previous years, despite a quarter to quarter 10% cut.

            In fact, overall year over year growth has ALWAYS included at least one drop in quarterly production numbers quarter to quarter, so this isn’t much of a contradiction at all. It is more of a pattern of business as usual to have quarterly ups and downs while growing rapidly overall.

            1. The 10% reduction: is that 10% Less than originally planned, or 10% Less than Q3?

              As in, inspite of increased demand for Model S/X, is it 10% Lower than they anticipated, based on typical sales per store #’s, with all the new stores?

              1. Nix says:

                I’m having second thoughts on my math. I’m going to have to recalculate this tomorrow to account for differences in production, sales, and drawing down inventory. I think I may have underestimated sales. I will revise and repost.

    3. Pushmi-Pullyu says:

      Yeah, that comes across like spin. Perhaps the truth is that demand is falling for the Model S and/or MX; Tesla certainly has been taking actions over the past couple of years or so which appear to be trying harder and harder to prop up demand. Industry watchers say the MS is getting a bit long in the tooth and needs a major refresh.

      But then, as I understand it, the entire new car market is down, so it may be a mistake to think of falling demand for the MS and/or MX as an indication that the cars are being seen by some as outdated.

      However, as far as PR goes: “We’re reducing MS and MX production by 10% to concentrate on producing more TM3’s” sounds much better than “We have to admit that demand for the MS and MX is falling, and so we’re going to cut back on production by 10%.”

      1. Nix says:

        It is odd, but demand is actually up according to the 8K report:

        “During Q3, we received record net orders for Model S and Model X, setting the stage for what should be an all-time record for deliveries of these vehicles in Q4.”

        1. Mystery says:

          The prior comment abt you being Juiced up on Koolaid is SO correct! You have taken over the Pusher as GrandMaster Cheerleader of TSLA Nonsense. Here Once Again is the fact – USA Model S isn’t Down YoY over -10% (its a freaking 5 year old car), Model X is close to $100K price (It is NOT going to be growing Much at All. period. Finito. TSLA is a serial disseminated of wild grandiose statements and Misses (They freakig admitted so TODAY (over 3+ Month delay), so they Flatly Refuse To disclose Real End User Intl Sales, So they can have the leeway to weasel out and claim Model S & X growth to Hoodwink to Raise more Investor Friends $$$ into the TX A&M Cash burning Bonfire. Peak model S & X is Well Into the rearview Mirror, No Matter what TSLA or anyone says (unless it is Dotcom era Swapping-Bartering up of Quid Pro Quo sales).
          You Need you open your eyes And Realize when you are being Misdirected and Fooled like the Muskmaid cheerleader.

    4. Nix says:

      I don’t think you are getting the whole story, because here is the rest of the story:

      “During Q3, we received record net orders for Model S and Model X, setting the stage for what should be an all-time record for deliveries of these vehicles in Q4.”

      It looks like they have really heavy demand, and that they are going to push through that demand in Q4, and then cut by 10 percent. There are no signs of there being a demand problem. Sales of Model S/X are actually increasing year over year, with Tesla selling nearly as many S/X units in 3 quarters this year as they sold in all of last year.

      1. Tom says:

        The hypothesis that they are going to wait until January to focus on M3 roll out simply defies logic. So your answer to the two conflicting statements of ‘record Q4’ and ‘dialing back 10%’ is that they are going to wait a couple months THEN shift resources? Ummm…that’s ridiculous..

        1. Nix says:

          Yup, you are right. I got this post wrong. I went back and re-read all the relevant parts.

          They are going to drop Q4 production 10% to around 24K. This will still produce two records:

          1) Record number of total yearly sales, reaching around 100K with Model 3 included.

          2) Record 4th quarter sales. Most sales ever in any 4th quarter.

          This will happen despite a quarter to quarter dip in production of 10%, and despite rising demand. Quarterly dips are nothing new for Tesla. In fact, Tesla has had at least one quarter-to-quarter dip in sales in every single year, even while overall sales growth for the year is has been up year after year.

          1. Might be a small move to allow more Model 3 Production Ramp, before they cross the 200,000 US Sales Mark?

            1. Nix says:

              They will be well short of that without the projected Model 3 sales. I don’t think that is the issue. Besides, they could just shift sales outside the US and get the same effect.

              But I think I’ve got a problem in my math with mixing production numbers and sales numbers. 24K might be production numbers, but sales may be significantly higher. I’ll recalculate tomorrow.

  16. ModernMarvelFan says:

    Did I read this right?

    Auto sales revenue: $2.362Billion.
    Cost of Auto Revenue: $1.930 Billion.

    ~ 432 Million in gross margin or ~18%. That is a declining in gross margin when Model S and Model X still dominates sales right now. That makes me wonder if Model 3 can keep the profitable mark at $35K.

    1. JyChevyVolt says:

      Tesla has demand problems with the S/X. They are producing inventory cars and selling them at a discount to skirt around the, “Tesla doesn’t discount our cars…. Not even for Elon’s mom.”

      1. Counterpoint says:

        The car market in general has had fewer sales, and there are only so many buyers of high-end luxury and sports cars. Tesla already owns a significant percentage of this market, so it’s reasonable that they’re going to be growth limited.

        My guess as to the biggest problem they may be facing is the Model 3 is so popular that it’s cannibalizing Model S sales, which means they keep getting thousands of new orders daily for a car they can’t build in quantity until March, and they’re getting fewer orders for the car they can build now as a result.

        I initially thought it would take Tesla 2 years to get through all the Model 3 pre-orders. Now it might be 3 or 4 years, if orders continue to pour in.

        1. Nix says:

          Model S and X sales were actually up for the year significantly over last year, with 25,915 Model S and Model X vehicles sold. That means that in the first 3 quarters, Tesla has nearly sold as many S/X vehicles as they did in the entire year in 2016.

          And this is what they say about Q4 projections:

          “During Q3, we received record net orders for Model S and Model X, setting the stage for what should be an all-time record for deliveries of these vehicles in Q4.”

          S/X sales will be at record numbers, which is very significant considering that the rest of the automotive industry actually shrank in 2017, and was only saved from disaster by a bump in sales due to hurricane insurance replacement purchases.

          1. Mystery says:

            Jeez quit the constant TSLA cheerleading. how much TSLA stock are you trying to protect? Do you have any other investments?

            1. Nix says:

              Are you incapable of doing math?

              Total sales in 2016 were 76,230 units.

              So far:

              2017 Q1: 25,418
              2017 Q2: 22,026
              2017 Q3: 25,915

              That’s 73,359 in just 3 quarters compared to 76,230 for the whole year of 2016. And Tesla still has a full quarter to go.

              Since math is a complete mystery to you, you will never understand that Tesla is headed for huge year over year growth from 2016 to 2017. Nearly a full quarter’s worth of growth, all without a single unit of Tesla’s biggest growth vehicle yet, the Model 3.

              Pull your head out.

              1. Mystery says:

                You need to learn Math and Trust Verified Acctg like insideEVs USA REAL END USER registrations, Or call jay and team liars despite All their hard work. Model S is Down -10% YoY (its a freaking 5 year old car), Model X is running out of steam (its often lose to $100k and in 5th place in US, AND most of All, TSLA has a Joke if a Mkt Share in China. Period – 16k in all of 2016, Yet 65%+ of ALL intl EV sales are from China. You figure out What Shady biz is Going On, to allow pompous Hubris Grandiosity to Smokescreen All to Gain more Bonfire Cash Burn. Wake up and stay of the Koolaid and Reality Distortion field.

      2. Nix says:

        It cracks me up. Half the time you guys complain that Tesla doesn’t give any discounts, so buying from a dealership is better. Then you turn around and complain when Tesla gives discounts!!

        The largest discounts in that sale were for cars with miles on them (demo cars) and for cars with battery or trim options that they discontinued.

        Tesla has never said that they won’t discount Inventory cars with miles or months of time on them. The “we don’t discount” is for orders from the factory. That sale did not apply to any orders from the factory, it was just Inventory cars.

        If you guys are going to flip-flop between whining that Tesla gives discounts, to whining that Tesla doesn’t give discounts, at least put in the effort to understand exactly when Tesla gives discounts, and when they don’t.

        I suggest going back through the insideev’s archives, because the discount policy has never been what you think it is.

        1. Pushmi-Pullyu says:

          Serial anti-Tesla FUDsters don’t care about consistency or logic, let alone Truth! They only care about finding some way to make whatever Tesla does sound bad, even when it means they argue exactly the opposite of what they were arguing the day before. And they do precisely that rather often.

        2. unlucky says:

          The complaint is lying about not discounting not complaining that they are discounting.

          If they are discounting then pretending they aren’t is lying.

          1. Nix says:

            Then you don’t understand their policy on discounting. Because there is ZERO inconsistency.

            Reality:

            1) Tesla does not discount any zero mile/zero month non-demo non-inventory vehicles. These are full price vehicles. You cannot negotiate a lower price on these vehicles.

            2) Tesla has ALWAYS discounted demo cars and services cars based upon miles and months in service. Tesla has ALWAYS discounted Inventory cars based upon miles and months in service. Tesla has ALWAYS offered their service loaner cars for sale at discount prices from the very beginning.

            If in your ignorance you only know about part 1, and remain willfully ignorant to part 2, your failure to understand will continue. That doesn’t make Tesla into liars, it makes you into willfully ignorant troll.

            _________________________________

            The deepest discounts we’ve seen were for Inventory cars with both miles and months in service that had configurations that had been discontinued, and where Tesla had made extra cost options standard, and where Tesla had reduced the base price. Those few inventory cars got 5X discounts:

            1) A discount for miles driven
            2) A discount for months in service
            3) A discount for the configuration no longer being offered.
            4) A discount to no longer charge for options that were extra cost options when the car was built, but was now a free included option when Tesla quit charging for them.
            5) A discount off of the original base price, when Tesla cut the prices for all Model X’s across the board.

            In your twisted world, Tesla cutting their prices for all their Model X’s across the board means Tesla are liars…..

            1. unlucky says:

              You started of with some points and then decided to riff off onto stuff I didn’t say. You state I don’t know they discount service loaners. Well, first of all you couldn’t know that because it isn’t true. I do know they discount service loaners. Second of all, how would you know? I spoke only of inventory cars, not loaners.

              Stick to what I said.

              As to the first part, yes if that is the full position then I didn’t know the full position. I only knew what I have seen Tesla report. And they never stated #1 like you state it. When Tesla discounted cars at the end of (IIRC) a quarter in 2016 to turn a profit so they could get better terms for their debt offerings they then claimed afterward that such things didn’t happen and no one was authorized to discount. This was all despite it actually happening (and I know because I know people who received such discounts on new inventory).

              https://jalopnik.com/elon-musk-orders-tesla-stores-not-to-discount-cars-to-h-1787220998

              Now it appears they are doing it again. So if they claim they are not discounting but are doing so it is dishonest. I prefer honesty over dishonesty.

              1. Nix says:

                Again, your ignorance of Tesla policy does not make Elon a liar.

                The policy has been well known for quite some time now, and recent discounts are ENTIRELY within policy.

                “It is absolutely vital that we adhere to the no negotiation and no discount policy that has been true since we first started taking orders 10 years ago.”

                “Musk said there could be discounts to floor models, vehicles that had been used for testing or those that were damaged in delivery.”

                “However, there can never—and I mean never—be a discount on a new car coming out of the factory in pristine condition, where there is no underlying rationale”

                If you don’t understand the underlying rationale for discounting discontinued models, or discounting prices for cars already built when the entire line of cars being built in the future will get the same discount, etc, I can’t help you.

                You need to research this stuff yourself before you start throwing around accusations.

                1. unlucky says:

                  Yes, that’s what Musk said *AFTER* they were discounting new inventory to make numbers that quarter.

                  You created your own virtual policy statement for Tesla and now want to say I’m a dope for not knowing it. It’s nothing Tesla ever expressed, you made it up. And it does not match what they were doing before no matter what Musk said after the quarter ended.

                  And if it isn’t matching what they are doing not it is lying. I don’t like lying.

                  1. Nix says:

                    I did nothing other than paraphrase what had already been said. I’m sorry you aren’t capable of recognizing that.

    2. unlucky says:

      As harsh as those numbers are they could easily be correct. Auto production is a capital-intensive business. This is especially true if you vertically integrate. Capital allocation is one reason companies outsource.

      It is possible to spend that much in a quarter getting a car line off the ground and still make it back later if the line runs without too much modification for 5 years. So these figures could be harsh, accurate and not necessarily doom either.

      1. Nix says:

        Best comment you’ve made in months.

        +1

    3. Nix says:

      MMF — They explained that. There were two major factors, Model 3 costs and their sale on Model S/X car trims that were obsolete:

      1) “Non-GAAP automotive gross margin temporarily declined to 18.7%, which was in line with our expectations. The gross margin declined primarily because of a significant increase in Model 3 manufacturing costs to support the limited initial level of production.”

      2) “Model S and Model X gross margin declined from Q2 primarily due to one-time price adjustments for discontinued trims and unfavorable trim mix. Numerous actions to improve Model S and Model X gross margin are underway. Consequently, we expect Model S and Model X gross margin to improve in upcoming quarters.”

      They don’t break down how much is from the Model 3, and how much from their S/X sale. Do you remember that big sale Tesla had that cut up to 30K off of inventory cars that had trims/battery options that they no longer sell anymore? That’s what they are talking about:

      https://cleantechnica.com/2017/09/04/30000-off-price-tesla-model-s-p100d-model-x-p100d-showroom-cars-month/

    4. Pushmi-Pullyu says:

      I dunno, how much of the “Cost of Auto Revenue: $1.930 Billion” is new costs for producing an unfortunately very low number of Model 3’s?

      That Tesla would be spending a lot more to produce cars in the short term, as TM3 production ramps up (or doesn’t ramp up, as the case may be…) was a given. Nobody should be surprised at that!

      Those who did a similar analysis in the first few months of Model S production would have likewise concluded that Tesla was spending waaaaay too much on producing its cars. In fact, as I understand it, it’s a rule of thumb in the auto industry that the first year of production of a new car model produces zero overall profit. It costs that much to develop, tool up for, and ramp up production of a new model.

      1. Nix says:

        Yes, this is the same thing as the whole false meme where haters were saying that the Volt cost GM $100K per car to build.

        It is the same false math of taking how much a company has spent ramping up production, before there are substantial sales, and then drawing conclusions base on those early costs.

        They have to spend money to get revenue through selling more cars. The spending comes up front, and the selling comes later. It is the reality of every manufacturing company in the world who brings a new product to market.

  17. JyChevyVolt says:

    Lowlights
    1. 18% gross profit margin
    2. Full quarter delay at minimum
    3. 10% reduction on S/X
    4. Reduce supercharger build out.
    5. Reduce service center build out
    6. No coast to coast FSD
    7. AP not 2x safer than human driver
    8. 2 full quarters of tax credit used up by S/X/3(employees)

    Highlights
    TSLA will be cheaper tomorrow.

    1. Nix says:

      Too much false FUD to even bother debunking individually. You seriously need to read this, it debunks your entire post:

      http://files.shareholder.com/downloads/ABEA-4CW8X0/2277403604x0x962149/00F6EB90-2695-44E6-8C03-7EC4E06DF840/TSLA_Update_Letter_2017-3Q.pdf

      1. JyChevyVolt says:

        FUD? Oh it’s NIX, the resident TSLA cheerleader. How many TSLA do you own?

    2. Rich says:

      “8. 2 full quarters of tax credit used up by S/X/3(employees)”

      I was projecting Tesla crossing 200K USA sales in Dec/17 to Jan/18. With the 10% reduction in S & X sales and Model 3 lagging 3 months, it’s possible Tesla won’t hit 200K USA sales until April/18. Projecting somewhere around 150K Model 3s sold before the Full tax credit expires. 378K Model 3s before the 50% tax credit expires.

      The glass is half full!

  18. pjwood1 says:

    They sounded pretty sober about cash management. That may spook investors, but there is no car on the horizon that substitutes for Model 3. IOW, I don’t think they’ll ultimately bleed much “first mover” share because of this. I mean, I-Pace = end of year. Mission E delivery isn’t in the interest of Porsche (Just look at E-Hybrid delays).

    Anyone buying a 9-14KWh car in this space is a chump. That’s a pathway to buyer’s remorse. Ice cream, in a teaspoon serving. That’s why CPOs will probably reach the 1bn mark, they’re predicting for 2018.

    1. JyChevyVolt says:

      Tesla is safe for another 2-4 years.

      Nissan has the Leaf (non factor).
      GM has the Bolt (non factor).
      Ford is MIA
      Chrysler is MIA
      The Korean have other problems besides EVs.
      The Japanese are dreaming about fuell cell.
      The European are hoping for clean diesel.
      Jaguar is ordering 21,000 battery for their I-Pace.

      1. theflew says:

        There might not be one OEM to compete with Tesla, but every EV released dilutes their share of the market. A larger Buick Bolt could kill a model Y before it’s even announced. As much as people talk about what the Bolt lacks there are only a couple of complaints – narrow seats, plastic interior trim, manual seats, and economy car looks. Things that are all fairy easy to fix on a Buick Bolt. I wouldn’t be surprised if they hit the market next year.

        1. Pushmi-Pullyu says:

          “A larger Buick Bolt could kill a model Y before it’s even announced.”

          A larger Buick Bolt would have exactly the same production constraint that the Bolt EV currently has: Lack of large-scale battery supply. Now, if and when GM finally moves to start building its own large-scale battery factories, then perhaps that could seriously challenge one or more of Tesla’s models. But of course, GM has every reason to delay that as long as possible; see The Innovator’s Dilemma.

          And besides that… are you serious? I don’t know many people who are aspiring to own a Buick!

          https://en.wikipedia.org/wiki/The_Innovator%27s_Dilemma

          1. unlucky says:

            It would have the same constraint if it existed today as the Bolt has today.

            You don’t know what the pack constraints are in future months. GM hasn’t said. If GM expects to make more cars you can be sure they contracted for more batteries. And there isn’t any reason to think the companies wouldn’t have agreed to make them. It’s what they do.

            I do not agree a Buick CUV Bolt could kill a Model Y before it even appears. It would surely be strong competition but some people simply won’t buy a Buick. And outside a few markets (US, Canada) GM is way behind Tesla anyway. There’s still maneuvering room for Tesla if a Buick CUV Bolt comes out at even an optimistic date like August 2018.

            1. GM could make an Electric Vehicle that was a Better car than what Tesla Built, but it still might not be able to blow away Tesla, since they have ignored the Infrastructure aspect, and relegated that aspect to others. Tesla’s Supercharger Network works because it is predictable, operational, and consistent! Like a good Fast Food Franchise, has food Consistency, as compared to unique Mom & Pop restaurants, where a dish with the same name, is different at each one!

          2. Spider-Dan says:

            Dude, your battery supply meme needs to go away. According to Elon, Tesla’s GF is the limiting factor in producing the M3 today.

            “We can’t successfully make 1000 because we are too busy preparing to make 200,000” is a poor excuse.

        2. Nix says:

          There are a lot of fantasy cars that don’t exist and the car makers haven’t even talked about building that could beat other cars that also don’t currently exist.

          I think we found the rabbit hole. Not gonna go down that one with you.

        3. JyChevyVolt says:

          Hate to break it to you but GM doesn’t want sell more than it needs too.

        4. Ziv says:

          theflew, I was reminded yesterday that GM has had a secret reveal of a BEV/CUV that looks very like the Buick Encore. If they do release that next year, it could really take the early adopters away from the Tesla Y in that market niche. An Encore/BEV would be interesting to put it lightly.

          1. Ziv says:

            Here is the link to the article about the Encore-like reveal/tease. Thanks for the reminder about it, Jean-Francois!

            https://insideevs.com/exclusive-next-gm-ev-to-be-bolt-based-buick-crossover/

      2. Me says:

        Market is changing very fast.

  19. Four Electrics says:

    Because of their disasterously incompetent management, Tesla will need to raise even more cash even more quickly, now. I predict at least a billion in early 2018 and another billion in summer 2018.

    1. Tom says:

      In the last 12 months they’ve burned throughf $6 billion in negative operational cash flow ($5b in debt and $1b in equity raise). At the current cash burn rate they will be out of cash in Q2 2018 approx. So pretty much this is going to be make or break in the next 5 months. Get that line up and going full steam by Q1 or things get extremely interesting.

      1. Doggydogworld says:

        You’re off by 40x. In the past 12 months “cash flow from operations” has been -150 million, not -6 billion.

        Capex ate up close to 3 billion. They also invested half a billion building rooftop solar systems to lease, 100m on Grohmann, etc.

  20. Four Electrics says:

    Relatedly, it’s interesting to note that TSLA’s stock has crashed in the second half of every year for the past four our five years. Wall Street must be making a fortune pumping, and then shorting, this stock every year. Amazing.

    1. Nix says:

      You have just now figured out that TSLA stock is volatile? Amazing. Who would have known that a volatile stock was volatile!

      /sarc

    2. Pushmi-Pullyu says:

      “Crashed”? Wow, 4E, that’s some pretty naked short-selling there.

      TSLA is a highly volatile stock, with a lot of speculative investing, but it has never “crashed”.

      https://electrek.files.wordpress.com/2017/08/screen-shot-2017-08-14-at-7-47-25-am.png

  21. Don Zenga says:

    No rush Tesla. Just keep doubling the production of Model-3 every month until it hits the full production. The original target date is 2018-01 anyway and every few 100 customers who get their toy is lucky person.

    We still did not see any price reduction in plugins, so every automaker is under the strong impression that Model-3 sales will not increase, lets wait and see for few more months.

    And no need to show Model-Y until Model-3 production ramps up.

  22. Benji888578 says:

    Did everyone forget that they already said model 3 production would be slowed partly due to increasing Gigafactory power pack production for Puerto Rico and VI? Their power grid will take months to repair.

    1. Someone out there says:

      Are you saying that Tesla is deliberately delaying the model 3 so they can donate battery packs to Puerto Rico? Seriously? Or did I miss a joke somewhere?

    2. unlucky says:

      I missed it because Tesla never said it.

      Tesla does not source batteries for their energy storage from the Gigafactory. Tesla doesn’t even get them all from Panasonic.

      And the poster on electrek who works in the plant said the idea that Gigafactory One will make batteries for Tesla storage has been dropped for now.

      1. Doggydogworld says:

        Tesla specifically claimed the Gigafactory started “mass producting” cells for Powerwall 2 and Powerpack 2 on 1/4/17:
        https://www.tesla.com/blog/battery-cell-production-begins-gigafactory

        1. unlucky says:

          Yep, That’s what they said.

          It doesn’t appear it ever happened.

          They also said the factory would be self-powered. And that didn’t happen either.

      2. Nix says:

        The non-gigafactory Samsung Powerpacks are for the Australian market only. All other Powerwall and Powerpack batteries come from the Gigafactory.

        They do use a different chemistry than the cells for the model 3. And those weren’t built at the gigafactory until later. Maybe that is what you had in mind?

      3. Doggydogworld says:

        “And the poster on electrek who works in the plant said the idea that Gigafactory One will make batteries for Tesla storage has been dropped for now.”

        Not what Endeep said. He was talking about the idea of using Tesla batteries to provide backup power for the plant so they wouldn’t have tons of waste every time NV Energy had an outage.

        I don’t know if Tesla will ever put panels on the GF. But there’s no reason to do so until Panasonic is up an running in Buffalo. It makes no sense to buy panels from a 3rd party today when they’re on the hook to buy from Panasonic next year.

    3. Pushmi-Pullyu says:

      “Did everyone forget that they already said model 3 production would be slowed partly due to increasing Gigafactory power pack production for Puerto Rico and VI?”

      Please learn how to distinguish between rumor and fact.

      Tesla has never stated or hinted at any delay in Model 3 production due to hurricane relief efforts, and it’s not reasonable to think they would sabotage their primary source of income for a public relations/charity project.

    4. Nix says:

      From memory, the only thing Tesla specifically delayed due to those projects was the reveal of the Tesla Semi.

  23. MarkT says:

    Just received my delay email (originally Dec-Feb delivery in Chicago)

    Thank you again for your Model 3 reservation. We’re making significant progress clearing early production bottlenecks but, as we continue to work through them, your estimated delivery timing will now be slightly later than we originally expected. Over the next 24 hours, you can log into your Tesla Account at any time to view your updated delivery window.
    Thank you for your patience and, more importantly, for believing in a sustainable energy future. We’re working hard to make it happen.
    You can find more information on your reservation, your delivery timing, and get a first look at the latest Model 3 vehicles coming off the line

  24. JyChevyVolt says:

    End of Q1 is five months away.

    How much cash will Tesla burn in 5 months?

    Why did Elon bail out Solar City?

    When will Elon admit, $35k model 3 will not be profitable?

    1. CCIE says:

      He doesn’t need to ever admit that they can’t profit at $35k. He just needs to be sure that very few ever ship at that price. Easy enough to do by forcing options and/or providing extremely long lead times for anyone attempting to buy that version.

      1. unlucky says:

        Agreed, CCIE. I expect that like with Model S we’ll see the low end model before a significant number are delivered. Maybe like S they’ll even cancel it before any are delivered. And Tesla will try to upsell those waiting for the base model to the longer range model, by saying you’ll get it sooner, like with the S.

        Plus I think we’ll see a price rise before the waiting list gets anywhere near short. Like with S, although the magnitude of the waiting list is so much higher this time it’s not really the same situation.

        1. Nix says:

          They definitely aren’t going to cancel the 220 range version like they did the S40. The S40 had reservations in the hundreds. Based on a VERY large sample size, 220 reservations are likely well over a hundred thousand.

          Definitely no comparison.

          1. unlucky says:

            I don’t think they’ll let that stop them.

            The number of 40 reservations was higher and they whittled it down by upselling everyone. The final number delivered was the low number you speak of.

            They’ll do it again for this car and whittle down the customer count for the base config. I don’t know if they’ll get it down that low, but it doesn’t have to be that low to get it into the noise considering the higher total sales.

            But of course the proof is in the pudding.

            1. Nix says:

              Only 4% of pre-orders were for the 40 kWh battery option.

              For the Model 3, 51% of the massively huge sample size wanted the short range 220 battery, and 49% wanted the long range 330 battery.

              https://www.teslarati.com/tesla-model-3-monthly-cost-aero-wheels-popular/

              There is absolutely no comparison. 4% of roughly 12,000 reservations, vs. 50% of reservations in roughly half a million reservations. You can’t get much more a huge disparity than that. Stop the nonsense.

              What is it with you tonight? Why are you buying into whatever BS floats by without any mental objectivity? You have one good post in months, and then any signs of objective thought or researched opinion goes straight down the drain.

              1. unlucky says:

                No, 4% was the figure given much later after they upsold people. And they refer to “buyers” with that, not orders.

                Buyers did not state their model when placing a deposit (except for Signature models). They were asked to order later when their time came up. The website would show them that it would be a long time if they ordered a 40kWh. And Tesla would contact them multiple times to upgrade if they still selected a 40kWh.

                The 4% figure does not indicate original intent it indicates what Tesla guided them into.

                Nothing’s up with me. You’re misinterpreting the statements given to fit your narrative.

                https://www.engadget.com/2013/04/01/tesla-model-s-axes-40kwh-battery-option/

                And that was 9 months after the Model S came out. They still hadn’t delivered a single 40kWh model, no matter what “place in line” the person wanting a 40kWh had. They kept delaying 40kW models to upsell people and increase revenues.

                And I do expect they’ll do it again.

                We’ll see if the short range model really gets cancelled. As I said, the proof is in the pudding. I’m not afraid of being wrong, even when presented with your information about higher interest in the low end model (which is logical given it is a lower priced model overall).

      2. Nix says:

        You do realize that very few cars of ANY make or model are sold as strippers with zero options?

        Every car maker’s margin on low optioned cars is low, and profits on highly optioned cars are much higher.

        That absolutely does NOT mean that any of the companies who sell only a small percent of stripped cars lose money on their stripped cars.

        1. unlucky says:

          There are actually a few models which are frequently or even dominantly sold as base models.

          Generally these are the cheapest cars on the market. Like the Mitsubishi Mirage for example. The Ford Ranger used to be that way too, it was overwhelmingly used by companies that used them for deliveries of small things. And they bought the lowest end model (or near to it) in volume.

          But yes, as you say, for most automobiles the base model is just a jumping off point and doesn’t constitute much of the sales. Tesla’s Model 3, as Tesla’s cheapest model, would probably be their model that sells the largest percentage of base configs but unless I’m reading the market wrong it probably won’t be very high.

          1. Nix says:

            What you have just done is to show that the exception proves the rule. The fact that there may be a few cars that sell quite a few base numbers (something you haven’t actually shown) just serves to expose how the vast majority sell few base models.

            Finding the exception proves the rule through exclusion.

            Any comparison between a Model 3 and a Ford Ranger or, well, anything made by Mitsubishi has a fatal flaw from the start. Now if you were talking BMW 3 series, Audi A4, or similar, you might have a point.

            You seem to just be posting reactionary negativism without any thought tonight. Starting to tune you out.

        2. CCIE says:

          Stripped cars generally exist for marketing purposes. They are low profit, so very few are made.

          In Tesla’s case, I don’t believe they can make money on the M3 at $35k. They created a version at that price because they had been saying that price for years in advance, and the Bolt’s price forced them to stick with it.

          So, their solution is to force high-profit options on early buyers. And once they stop forcing those options, they’ll provide a long lead time to anyone who tried to order a stripped base car. That will minimize the number delivered, but still allow them to claim they sell at $35k.

          I don’t think they’ll actually cancel the $35k version, since they need to use the price for marketing.

  25. Tom says:

    It’s also a very non-transparent move to lump energy storage into solar and not give any insight as to the direction of those two. Presumably increases in storage revenue are offsetting drop in solar.

    1. Nix says:

      Those details will be reported in the 10-Q report. This is just the 8-K filing. Tesla’s 10-Q reports typically follow the 8-K by around a week or so later. Patience.

  26. Mjp462 says:

    If Elon actually thinks they will get to 5k per week in late Q2, would he say so on the call? Seems to me, the ramp is more difficult than he thought with more problems than he thought. Why should anyone believe “5k per week in Q1?”

  27. CCIE says:

    Is there something fundamentally different about the construction of the battery packs for the M3? I don’t understand how they can be having this much trouble building them.

    1. Nix says:

      Yes, they completely changed battery format and cooling from the original Model S/X batteries that they built for years, and the pack shape has also changed, and they had a new vendor doing the work.

      That’s significant change. But yes, Tesla has the institutional knowledge to build their own battery packs, and they should be able to take that knowledge and step in in place of the vendor and successfully execute.

      1. JyChevyVolt says:

        For a company that loves vertical integration, I’m surprised they outsourced the most important piece. Talk about perfect escape goat 🐐.

    2. Bill Howland says:

      Yeah, CCIE that particular issue had me wondering in a comment on the other Tesla article. At this very late date I would think there would be no changes to the battery at all, but now it looks like there are major reconfiguration, and software changes, and to me is a major flag amoungst other minor flags.

      I didn’t think the M3 battery was at all revolutionary, and that they had made plenty like it in the “S” and “X”. If they are using a new cell design, I’d think the testing for it would have been completed 6 months ago.

      His statement sounded like an ’emergency fix’.

      I wonder what the final number of emergencies will be – seeing as Mr. Musk seems happiest in Emergency Mode..

      Also explains why trivialities like ongoing fit and finish, and Tesla collision unrepairability are ignored.

      Or why, per a recent TMC article, there isn’t one SPARE Headlamp assembly available for the “S”.

    3. Doggydogworld says:

      The biggest change in Model 3 battery pack construction is the amount of automation involved.

      This is pretty much true for the entire car.

  28. Jim J Fox says:

    Musk is far too ambitious; his ventures are too varied and disconnected, so many eggs in so many baskets that something MUST get dropped, eventually. Maybe he should FOCUS more on his main targets?
    Don’t recall anyone forecasting a 3 month delay in M3 production.
    All it will take is a major fault/recall on large M3 numbers and Tesla will be in very deep……

  29. Serial anti tesla troll thomas says:

    Haha I should work as a analyst. Didn’t I wrote approx. 1 week ago on insideevs.com that we will se a net profit of -680 mio? And now it is -671 mio.

    1. Nix says:

      Really? Please post a link to when you predicted back in 2012 that Tesla would break 250,000 units in sales by 2017. Then I’d be impressed. You guys have missed the forest for the trees for years now, and failed to successfully predict the big picture.

      Not that impressive.

      1. Serial anti tesla troll thomas says:

        What big picture? Producing only 250000 cars in 10 years?
        But anyway…what a nice day…one day the dream ends.
        By the way…what is with the semi truck? Did I miss the announcement which was already postponed. Wasn’t it postponed to end October?

  30. Another Euro point of view says:

    All this wouldn’t be so ridiculous if there wasn’t that much hype around Tesla, if Musk was a little more cautious in his announcements.
    What I find the most problematic is not really the delay but the communication that leads to it. The rushed reveal of Model 3.
    On top of this there still is that huge loss.
    Does that fast growth justify such a loss ?

    No.

    Both BYD and Tesla were incorporated in 2003.

    As per 2016, Tesla was producing +/- 80K cars, BYD produced 300K+ cars.

    Despite this faster growth rate BYD produced a profit and is likely to produce more BEV/PHEV than Tesla this year.

    Is BYD management making announcements of announcements and tweeting allover. No.

    VW CEO was right, Tesla is an over hyped company that talks a lot but has yet to prove everything.

    By the way, what about Tesla semi reveal ?
    Meanwhile how many electric buses did BYD sale worldwide ?

    1. Mjp462 says:

      Agreed!

    2. Doggydogworld says:

      BYD has a favored position in a large, protected market with 50% subsidies plus significant regulatory incentives that virtually force people to buy EVs. There’s no comparison between BYD and Tesla’s competitive environments or their near-term profit potential.

Leave a Reply