
Tesla Q1 2018 Vehicle Production and Deliveries - beltex
http://ir.tesla.com/releasedetail.cfm?ReleaseID=1062670
======
planetjones
I used to be one of the people who poked fun at Musk and suggested people
short Tesla stock (as the valuation is crazy compared to the production and
penetration numbers).

But I am no longer that person. I read his biography (Elon Musk: Tesla,
SpaceX, and the Quest for a Fantastic Future) and this is a guy who genuinely
wants to change things on a macro scale: opening up space, changing
transportation. He is also a genuine risk taker, who will bet his own money
and risk everything for something he believes in. I now root for Musk and his
companies to succeed. I wouldn't take short positions on Tesla now.

Plus the deletion of the SpaceX and Tesla facebook pages, when told over
Twitter they existed was pretty funny.

~~~
jacquesm
Reading a book doesn't change fundamentals. Tesla is heading for a rough time,
I sincerely hope they make it through and hope that Musk will not come to
regret making that stupid joke.

~~~
qaq
On the scale of Tesla's own history how would you rate that rough time? E.g.
is it more rough vs 1st year of Tesla 2nd year? 3rd Year? How rough is it for
people who actually pulled through all the challenges they faced from the
founding till now. I think people are overestimating the "rough times" part.
Musk and Tesla have a ton of good will that no other automaker has and they
can leverage that in a rough situation.

~~~
jacquesm
There are a lot of things coming together that each individually would have
been a serious challenge, to have them all at once and within 6 months of each
other is pretty rough. Even so, I would not bet against Musk, he has a habit
of making it through somehow. There is a book with a character in it called
Reid Malenfant, Musk reminds me of that character.

[https://en.wikipedia.org/wiki/Space_(Baxter_novel)](https://en.wikipedia.org/wiki/Space_\(Baxter_novel\))

You get to chose: you're part of the bulldozer or you'll end up part of the
highway. Even so, it will not be easy to do right by Tesla and not to ignore
SpaceX, and that's before going into the fact that Tesla is now effectively
subsidizing Solar City.

~~~
qaq
I'll give you a hypothetical about what I tried to convey. Qatar is spending
200 billion in relation to world cup 2022 in large part as a part of PR
effort. Now imaging 2 hypothetical news stories VW AG is opening and
innovation center in Doha, Qatar. Tesla Inc. is opening an innovation center
in Doha, Qatar. What would be a PR value for each of them be for Tamim bin
Hamad Al Thani just ballpark a figure that he would be willing to put up for
each one.

~~~
jacquesm
Oh sure, but then you're in rescue territory. But that's not what we are
talking about here, we are evaluating - or at least, I am trying to evaluate -
how serious the problems are in isolation. That there will be some white
knight is beyond a doubt for me even if things do go very wrong.

------
InTheArena
The "leaks" on email this last week have changed the narrative a lot. The leak
last week (probably not planned) of "prove the haters wrong" resulted in a
sell off, while the leak over the weekend cushioned the final numbers.

That said, TSLA, just like SpaceX plays really close to the edge with equity
and risk in pursuit of a vision. What most Tesla shorts fail to recognize is
that Tesla has already gotten to the point that if something really really bad
where to happen, any number of well capitalized tech firms would scoop them up
in a instant (looking at Apple in particular). The cars are really a minimal
amount of hardware, with software wrapped around them. They have loyalty like
the iPhone had loyalty and Alexa has loyalty.

The big bottleneck to this point has been battery assembly lines at the
Gigafactory. They just installed a new line for the battery packing line that
they yanked back from Panasonic. Now they need to prove they can start scaling
more linearly.

The press reaction to all of this is a good example of the media not knowing
what they are talking about. The press has issued breathless reports about
there being too much skilled labor and parts by hand, then too much robotic
automation. They point at the low uptake of reservation holders (30%) without
noting that the reservations are holding constant, and that this is mostly a
effect of only the most premium of the premium going on sale right now.

Tesla's barb on the Model T is interesting as well. "This is the fastest
growth of any automotive company in the modern era. If this rate of growth
continues, it will exceed even that of Ford and the Model T. "

What Tesla is trying to do is hard. There is a reason no one has been
successful in doing it in more then 50+ years. Watching the people who are
opposed to what Tesla is doing is just as interesting.

~~~
empath75
> What most Tesla shorts fail to recognize is that Tesla has already gotten to
> the point that if something really really bad where to happen, any number of
> well capitalized tech firms would scoop them up in a instant (looking at
> Apple in particular).

Maybe -- or they could wait to buy their assets in bankruptcy.

~~~
ISL
Bankruptcy is precisely when a well-capitalized buyer might buy Tesla.

If TSLA fell that far, the shorts would get paid.

~~~
projectramo
Yes, or even if they bought Tesla before that because it was in "trouble", the
shorts would have paid out.

------
davedx
CNN this morning: "Tesla will soon report whether it met its target to make
2,500 Model 3s a week. It is on pace to make about half that number, according
to Bloomberg." [1]

From the statement: "In the past seven days, Tesla produced 2,020 Model 3
vehicles."

A pretty big improvement, still some hard work to do, but they really are
ramping up.

I'm relieved at the announcement they won't need another debt/equity raise
this year. Let's see where we are in 3 months.

[1] [http://money.cnn.com/2018/04/02/news/companies/tesla-
stock-a...](http://money.cnn.com/2018/04/02/news/companies/tesla-stock-
april/index.html)

~~~
agumonkey
Depends on what made these numbers. Late night burn or proper automation ?

~~~
Robotbeat
They won't reach proper automation until they're getting 5,000 to 8,000 Model
3s per week. But, of course, nobody really does automation to the level that
Tesla is trying to do, so their current mix between labor and automation (as
they continue to build up their automation line) is approximately what other
car makers do.

Getting full automation to work is really hard, takes a lot of labor and time.
I think they'll do it, but the task should not be under-estimated. In the
meantime, they've already achieved a production rate per factory line similar
to what a typical automaker like VW would do (on the order of 100,000 per year
for a factory).

Like SpaceX around 2015 or so. Respectable, but not yet Earth-shattering (i.e.
2017).

~~~
vasco
> nobody really does automation to the level that Tesla is trying to do

Have you ever looked at production line videos from Mercedes Benz on youtube?
You'll see that what Tesla wants to do is actually already being done, only
with dead-tree engines instead.

~~~
Robotbeat
Tesla wishes to do full automation of basically everything, even final
assembly. According to this recent Bernstein report (by a Tesla critic), this
hasn't ever been successfully done before:
[https://twitter.com/valleyhack/status/979434674144423936](https://twitter.com/valleyhack/status/979434674144423936)

The point of the report is that Tesla is trying to automate _too much_ ,
beyond what everyone else does today and where others have tried and failed
spectacularly. The report uses that history as proof it cannot be done and
therefore Tesla will fail.

Are you disputing that by saying Benz does full automation of even final
assembly?

~~~
agumonkey
bmw x2 is impressively devoid of humans

[https://www.youtube.com/watch?v=TubOzvqOCmI](https://www.youtube.com/watch?v=TubOzvqOCmI)

if you look closely in the background at 10:14 you can catch a wild homo
sapiens wandering between an army of robocop arm prototypes

~~~
Robotbeat
Your video makes my point very nicely.

From 12:00 onward, though, humans are used for many tasks, including multiple
assembly steps and especially final assembly. These are things that Tesla
wishes to fully automate and which industry experts think they're crazy for
trying. And honestly, looking at that video (especially the wire harness
installation at 17:00), it sure looks like an incredibly hard problem to solve
and the industry experts certainly have a good point.

~~~
agumonkey
I think it would be hard if approached as a human technique automation, but
there might be other ways to connect power and signal lines in a car in more
mechanical ways. Depending on how much thought and desire has been spent by
experienced factory designers...

~~~
Robotbeat
You're absolutely right, and there's a lot of innovation that comes not from
automating existing human technique but from changing how things are made so
that the technique can be easily automated. For example: from through-hole
components in PCBs to surface mount components in PCBs. Or even the PCB
itself, which replaced wire wrapping (which, granted, can be automated) and
soldering components together with free wires.

The design and the technique are critical variables that must be tweaked to
make automation feasible.

~~~
agumonkey
Yeah, that's exactly the kind of shift I was thinking about. Now that said, I
don't think Tesla is ready to do this, which would somehow prove old timers
right. If Tesla managed to this bmw level of automation they'd be pushing
enough cars to fulfill demands and keep investors. Later they'll make that 20%
jump if Musk really wants to make a SpaceX kind of leap.

~~~
Robotbeat
They are pushing enough cars, I think. One factory producing about 4000 cars
per week is a very large factory, indeed!

I think Tesla is continually thinking of ways to improve the design, develop
new techniques that can be automated easier. And I don't think these are all
making it into the Model 3. Some will need to wait until the Model Y or even
later. For instance, apparently the Model Y will ditch the 12 volt battery and
feature a MUCH shorter/simpler wiring harness (which is one thing that's
incredibly hard to automate, so making it simpler should help a lot):
[https://insideevs.com/tesla-model-y-ditch-12-volt-
battery-95...](https://insideevs.com/tesla-model-y-ditch-12-volt-
battery-95-less-wiring-model-3/)

(with the caveat that Model Y plans seem to change each quarter)

~~~
agumonkey
from 1500m to 100m seems exciting

------
ckastner
> _The Model 3 output increased exponentially, representing a fourfold
> increase over last quarter. This is the fastest growth of any automotive
> company in the modern era. If this rate of growth continues, it will exceed
> even that of Ford and the Model T._

Way to spin all the production issues and delay of the previous quarter into a
positive.

They're way behind the goals they set for themselves, but instead of measuring
by _those_ goals, they measure themselves by their weakest performance, and
suddenly their performance becomes historic.

~~~
thisisit
> Way to spin all the production issues and delay of the previous quarter into
> a positive.

I don't really like Musk but sending positive messages in Investment relations
is the key to keeping the company afloat. At one of my previous employers we
lost top 4 customers and 10% of our revenue. But, the investment relationship
site said - "We are up 1% in revenue, if we discount top 4 customers".

If Tesla admits and says - "We have improved but we are still behind on our
original promise" then the stock price is going to drop like a rock.

~~~
misja111
No, investors are not that stupid. They might buy these marketing talks for a
while but eventually they will see through. The recent drop in Tesla's share
price is a testament of that.

"You can fool some people all of the time, and you can fool all people some of
the time, but you can't fool all people all of the time."

~~~
bald
Price is a function of supply and demand. So this tactic is better than the
blunt tactic even if it manages to fool only one shareholder.

~~~
chillingeffect
Yes, it's about the ratio of shareholders you can fool all the time to the
ratio of the shareholders you can't fool all the time.

------
icegreentea2
They built 9766 Model 3 in Q1 and were able to surge out 2000 in the last 7
days, and claim a doubling in their Model 3 production rate over Q1.

Something doesn't really add up there. Regardless of their spin their Q1 must
have been hellish on the guys and gals on the floor and in production support.

I hope they can do a sustainable ramp soon so my friends can get their Model
3s.

I would REALLY love to see what their internal messaging on this is.

~~~
dragontamer
I can't find the actual memo. But Bloomberg wrote about a leaked memo.

[https://www.bloomberg.com/news/articles/2018-03-29/tesla-
urg...](https://www.bloomberg.com/news/articles/2018-03-29/tesla-urges-
workers-to-prove-haters-wrong-ramp-up-production)

> Tesla will suspend Model S and Model X production Thursday and Friday
> because it’s ahead of target on building those this quarter, Peter
> Hochholdinger, vice president of production, wrote to employees in a March
> 21 email obtained by Bloomberg News. An unspecified “limited number” of
> workers who build those vehicles will have the option to work on the Model 3
> line on those two days and Saturday, he said.

They moved workers from the Model S & X lines over to the Model 3. And an
unspecified number of "volunteers" also got cracking to make the final spurt.

------
joezydeco
I was next to Model X at a stoplight last night.

They look nice from a distance, but when you sit up close you can see where
every panel and piece of trim just doesn't line up quite right. Sitting in my
cheap little Mazda3, I've never noticed any problem with simple fit-and-finish
details like that.

I truly hope the Model 3s catch up, but I really think those owners will be in
for a world of headaches after delivery.

~~~
TeeWEE
I also saw a model X, and the doors didnt line up correctly with the chassis.
Maybe it was not closed properly? Maybe it was bad construction. I'm not sure.

Edit, added link: [https://teslamotorsclub.com/tmc/threads/door-alignment-
norma...](https://teslamotorsclub.com/tmc/threads/door-alignment-
normal.66520/)

~~~
joezydeco
The rear doors are a 100% given, especially where the upper chrome trim meets
the C pillar. It's like they just threw up their hands at that part of the
manufacturing spinup.

But, the longer you look, the more mistakes you see.

------
ekrebs
2,020 is under Elon's 2,500 prediction, but well above the 1,000-1,500
expectations of those shorting the stock (unless the shorts' articles were
deliberately misleading, of course).

Also, according to the release, those are customer-delivered numbers. Overall,
a good trajectory and a sign of long-term health.

~~~
dgritsko
Yeah, if they're able to consistently hit that weekly number (and continue to
improve upon it) this is some much-needed good news for Tesla.

~~~
jacquesm
They need to improve on it, badly. Operating a line at 40% capacity is
terrible for your bankaccount.

------
danso
Worth posting Bloomberg's Tesla Model 3 Tracker, which contains a model
attempting to independently estimate production, as well as background info
about Tesla's past projections:
[https://www.bloomberg.com/graphics/2018-tesla-
tracker/](https://www.bloomberg.com/graphics/2018-tesla-tracker/)

~~~
pavs
I think most people shouldn't take this tracker seriously as it was wildly off
most of the time and was often manually adjusted.

~~~
danso
The tracker on Apr. 2 (Google Cache) has an estimate of 12,245 units, which is
based off of a confirmed production total of 2,686 at the end of Q4.

[http://archive.is/WXoXw](http://archive.is/WXoXw)

Today's announcement says 9,766 M3s were produced in Q1: 9766 + 2686, i.e.
12452.

They don't seem that far off?

~~~
pavs
It was adjusted manually in the beginning of the month. In March it was all
over the place. I think unofficial tracker like this, even with all the
disclaimers, actually makes this worse.

------
maxander
I clicked on this article expecting a graph of an exponential curve, and they
utterly failed to deliver. Who _cares_ how many cars they’re making, if they
can’t make a decent exponential curve? That is the #1 priority product of any
California hype house! How are we supposed to believe they’ll amount to
anything if they can’t show us a trend line that would consume all matter on
the planet by 2045?

------
_ph_
Despite the disappointment of missing the goal of 2500 cars, this is good
news. Tesla came reasonably close to their goal and certainly won't stop at
that number. To put the number into scale, they made as many Model 3 in the
last week as Model S and X combined. That means, Tesla is on a good track to
produce at least twice as many cars in 2018 as they did in 2017, which already
was a record year.

------
cdibona
GM/Toyota/NUUMI would produce four times vehicles in the same amount of time
in that plant. (about 120 to 130k/quarter, depending on the nuumi production
numbers you believe)

~~~
benjaminl
You could be comparing apples and grapefruits here.

It has been reported that Tesla makes a lot of thier own parts. So more of the
total supply chain for manufacturing the car exists in that plant.

For example Tesla manufacturers thier own motor in the plant were the NUMMI
plant would have had thier ICE motors pre-assembled.

------
dragontamer
Tesla asked for volunteers to staff the assembly lines last week.
[https://www.bloomberg.com/news/articles/2018-03-29/tesla-
urg...](https://www.bloomberg.com/news/articles/2018-03-29/tesla-urges-
workers-to-prove-haters-wrong-ramp-up-production)

I personally am bearish on this. If they worked so hard, but only made it to
2000 / week (their goal was 5000/week by December2017. They lowered it to 2500
this past week), then its all just marketing spin to make 2000/week look
better, which is still missing their original targets.

Volunteer staff while cutting Model S / Model X production (and moving that
staff over to the Model 3 lines) is not sustainable. They could do it for one
week to pad out the numbers, but they need real growth to remain solvent over
the next year.

Ignoring the 2000/week spurt last week, the other 7000 Model 3 cars were made
over the course of 11 weeks. That's roughly 650ish Model3 cars made per week,
on the average (when looking at it across the quarter). This is actually less
than the 793/week Model 3 they did at the end of Q4.

Bloomberg estimates that Tesla's overall production has grown to 1000/week or
maybe a little bit above that, which might be closer to the "sustainable" size
(ie: not counting the volunteer staff + spurt last week).

I'd be surprised if Tesla makes 30,000 Model 3s next quarter (which is still
grossly below their target of 5000/week by Dec2017).

Tesla NEEDS 5000/week. 2000/week is still very low and unsustainable for this
company.

[https://money.usnews.com/investing/news/articles/2018-04-03/...](https://money.usnews.com/investing/news/articles/2018-04-03/tesla-
says-produced-2-020-model-3-sedans-last-week)

> "Tesla continues to target a production rate of approximately 5,000 units
> per week in about three months, laying the groundwork for Q3 to have the
> long-sought ideal combination of high volume, good gross margin and strong
> positive operating cash flow," it said.

> "As a result, Tesla does not require an equity or debt raise this year,
> apart from standard credit lines."

~~~
saas_co_de
> Ignoring the 2000/week spurt last week, the other 7000 Model 3 cars were
> made over the course of 11 weeks

Exactly. The 2000 number is complete B.S. They just held back nearly finished
units and the "completed" them all in the last week so they could release a
semi-decent number without technically lying, but they are nowhere close to
target.

"Q1 deliveries totaled 29,980 vehicles, of which 11,730 were Model S, 10,070
were Model X, and 8,180 were Model 3"

"In Q4, Tesla delivered 29,870 vehicles, of which 15,200 were Model S, 13,120
were Model X, and 1,550 were Model 3." \-
[http://ir.tesla.com/releasedetail.cfm?releaseid=1053245](http://ir.tesla.com/releasedetail.cfm?releaseid=1053245)

Model S/X: -23% deliveries. That is a BIG problem. Falling demand for S/X and
inability to sell at sticker price (where they still lose money) and replacing
that with another model that they lose even more money on is not a great
"growth" story.

------
JepZ
Well, I think many people don't want to understand that _ambitious_ targets
are most likely to be missed. So missing the target is actually what is going
to happen and the real question is by how much.

So some might ask, why setting a goal that is unlikely to be reached and not
simply set a realistic target?

Changing the automotive world isn't realistic. So if you would go with a
realistic target you could have shutdown Tesla years ago. Nevertheless, there
is an actual risk involved in setting the targets too high as burning people
and investors can cause real problems.

Yet, I think it is best to judge Tesla by their actual performance and not so
much by the fact that they missed their ambitious targets.

------
wiremine
There's a number of questions on this thread about Telsa's production uptick
being about "burning the late night oil" or automation. Does anyone have any
reliable insight into this question?

And, regarding their automation, a few honest questions:

1\. How much automation are we talking about, compared to the status quo?

2\. How much of the automation is reusable across other models? Are they
building up a repeatable model to increase scale at a lower cost?

~~~
Robotbeat
Both are important.

They haven't ramped up automation yet, so right now they're burning the
midnight oil on both regular production (i.e. likely with a similar
labor/automation mix as typical manufacturers) AND tuning automation. Trying
to do both simultaneously on a compressed timescale is what makes this hard.

------
badosu
> _The quality of Model 3 coming out of production is at the highest level we
> have seen across all our products._

I am dumbfounded by this statement, weren't tons of images and videos of huge
gaps between sections on Model 3s?

He does not even acknowledge it happened, so I cannot assume that it is meant
to say that the issues were fixed.

Am I missing something? Otherwise that's incredibly misleading.

------
robotkdick
The joke is an indication their position is stronger than perceived. That's
his warped sense of humor, and something he's probably been longing to do
(once the time was right). I predict this press will be the first of many
positive releases from Tesla. While they flew very close to the sun, the wings
have held, and they will be soaring from here.

------
buvanshak
Why is this posted on HN?

I know there are a lot of people here who are so into Tesla. But this does not
fit the HN content guidelines in anyway...

~~~
danso
Which content guidelines are you talking about?

[https://news.ycombinator.com/newsguidelines.html](https://news.ycombinator.com/newsguidelines.html)

> _On-Topic: Anything that good hackers would find interesting. That includes
> more than hacking and startups. If you had to reduce it to a sentence, the
> answer might be: anything that gratifies one 's intellectual curiosity._

~~~
buvanshak
> Anything that good hackers would find interesting.

How is quarterly statement from a Car company interesting to "good hackers" or
how is this gratifying intellectual curiosity in anyway? If you want to
discuss the financial/production reports of the company you can go to the
forums dedicated to it...

~~~
jacquesm
How come someone that's been here less than 2 months and who has two 'Ask HN's
to his name one of which is flagged feels they get to dicate what should and
should not be on the site?

The Tesla story is interesting to 'good hackers' because it is a company that
does _exactly_ the kind of thing that 'good hackers' love to read about:
disrupt a bunch of incumbents. The fact that Elon Musk started out as a nobody
that came to the United States in order to chase his dreams and is actually
doing just that coupled with the fact that I suspect that a large number of HN
readers either has a position in Tesla and/or drives a Tesla (or covets one)
means there is a pretty good chance that substantial articles about Tesla will
get upvoted.

If you can't deal with that rather than telling the people here to go
elsewhere maybe _you_ should go elsewhere or at least attempt to add to the
discussion in some constructive way.

~~~
buvanshak
>The Tesla story is interesting to 'good hackers' because it is a company that
does exactly the kind of thing that 'good hackers' love to read about

That it like saying Physicists will be interested in the bowel movements of
Einstein because he is a brilliant physicist..

Tesla may be an interesting company to "hackers" or what ever. But does the
article contains anything of that sort? If HN is filled with the quarterly
reports of every "interesting" company, that would be bad, right?

If it contained a technique, or an interesting idea that Tesla is employing,
then it would have been ok.

Clear?

~~~
danso
To be fair, quarterly reports for companies like Apple, Facebook, Twitter, and
Google often make the front page. And HN is just as interested in Tesla as
those companies. Furthermore, this is a particularly interesting quarterly
report for Tesla, as it comes after Tesla faces serious questions about its
production shortfalls, on top of the other bad news (fatal AP crash, huge
recall for Model S, Moody's downgrade) it has received this past week.

------
beltex
_" Tesla Goes Bankrupt

Palo Alto, California, April 1, 2018 --

Despite intense efforts to raise money, including a last-ditch mass sale of
Easter Eggs, we are sad to report that Tesla has gone completely and totally
bankrupt. So bankrupt, you can't believe it."_

\- Elon Musk

[https://twitter.com/elonmusk/status/980566101124722688](https://twitter.com/elonmusk/status/980566101124722688)

~~~
jjevanoorschot
For those who didn't already get it, it's an April Fool's joke.

~~~
beltex
Indeed. Given the number of down votes, either folks didn't catch that, or
it's all the short sellers :)

~~~
jacquesm
Or maybe it was a lame joke by the CEO of a publicly traded company and as
such totally out of order.

That joke might have been funny if Tesla was making 7500 model 3 cars / week.

~~~
mikeg8
Agreed. Can't wait to live in a world where CEOs can control themselves and
refrain from cracking a quick joke on _April Fools Day_.

~~~
jacquesm
With being listed on the stock exchange comes a certain amount of
responsibility. If you can't control yourself from making jokes about your
company going bankrupt then maybe you should stay private?

Keep in mind there are people's savings on the line here.

