
Tesla Q2 2018 Vehicle Production and Deliveries - reddotX
http://ir.tesla.com/news-releases/news-release-details/tesla-q2-2018-vehicle-production-and-deliveries
======
flexie
When you read through the announcement and you realize that this is a company
that even if it doubled it's current production rate it would still have
orders for the close to a year's production, then you have got to pause and be
amazed.

How many Model 3s could Tesla produce at its current facilities? 7,000?
10,000? 15,000? It wouldn't be enough to remotely satisfy the demand.

Truth is that once delivery picks up, more people will start to order since
currently people like me think it's pointless to order a car that you would
have to wait a year to get and that - in most parts of the world - you can
actually not order yet. The orders are likely to increase proportionate to the
production capacity as Model 3 will be made available around the world.

This company could build 3 Giga Factories around the world that each produce
10,000 Model 3s per week and demand would still not be met. Heck, they could
have 10 Giga Factories and they might still not satisfy demand for Model 3.

And then there is the future demand for Model Y and - once they get economy of
scale and battery prices go down a bit - demand for cheaper, smaller cars.

All this demand could be met by other car manufacturers if they too produced
long range EVs of similar or better quality than combustion engine cars. But
no-one does and no-one will for an other year. Don't say Nissan Leaf; it's not
long range. And when they finally do, in 2-3 years or so, are you going to
take a chance on one of the first competitive EVs from VW, Mercedes, BMW,
Ford, General Motors, Hyundai, Fiat, Toyota or Mazda or are you just gonna
stick with Tesla, which by then comes with even better specs than today?

Tesla is the Apple of the car world. There is still room for other producers
to make the Android cars that spend 3-4 year playing the catch up game of
being one-two models behind in specs, and then maybe finally catch up in 5-10
years. But Tesla will get the better customers and the fat margins if the
traditionalists don't hurry. And hurry a lot.

~~~
compcoffee
> _7,000? 10,000? 15,000? It wouldn 't be enough to remotely satisfy the
> demand._

Honest question: where on earth do you get this idea? You actually think there
is global demand for ~800,000 vehicles with an ASP of ~$55k USD?

What are you basing this insane demand off of? Tesla won't even report the
current backlog numbers. If they were increasing, you don't think they'd be
boasting about it?

Where does the unlimited demand come from?

> _And when they finally do, in 2-3 years or so, are you going to take a
> chance on one of the first competitive EVs from VW, Mercedes, BMW, Ford,
> General Motors, Hyundai, Fiat, Toyota or Mazda or are you just gonna stick
> with Tesla, which by then comes with even better specs than today?_

Wait, you're saying you're _not_ going to trust manufacturers that have been
building and servicing millions and millions and millions of cars for, some of
them, over 100 years, but instead you will trust Tesla who hasn't even proven
they can sustainably build and service the few hundred thousand they've got on
the road? Aren't EVs supposed to be simpler than ICEs?

I simply cannot understand this thinking.

~~~
flexie
More than 70M cars are produced worldwide every year. The 3 large German
producers, Mercedes, Audi and BMW, are producing around 6M cars, of which many
are priced similarly or more expensive than Model 3. That's just to mention
some of the larger ones.

There is easily a demand for millions of cars within the upper end of the mid
price segment like Model 3, and once the price of batteries goes down just a
bit, EVs can reach the lower end of the mid segment.

We are not at the cheap segment yet, but it's just a matter of battery prices
going down (through economy of scale; we actually don't need any breakthroughs
in technology).

Then factor in charging networks. Right now, I don't have any supercharger
near me. Next year I will. In 4-5 years I will have plenty.

As for not trusting the traditional manufacturers, I stopped buying Nokia and
Ericsson and never came back, ones Apple marketed the iPhone. Not because they
had had bad products or weren't trustworthy anymore. Just because it was
obvious they produced the old tech and were behind on the new. People stopped
buying horses and carriages when Ford produced his cars. Horses served us well
for millennia.

And the hundreds of thousands of Teslas already driving billions of miles on
the road are still driving well without the engines and expertise of BMW,
right? People trust Tesla's tech now.

~~~
cjrp
> Mercedes, Audi and BMW, are producing around 6M cars, of which many are
> priced similarly or more expensive than Model 3

~$55k USD would be roughly equivalent to a 5 Series/E Class/A6. Combined,
about 300,000 of these cars are sold per year in Europe. So to sell 800,000
Model 3s worldwide you've got to replace every single one of those
BMW/Merc/Audi sales, and then some.

~~~
qaq
Why are you comparing to 5 Series/E Class/A6 ? it's in A4, 3 series, C class
price range and size.

~~~
cjrp
$55k isn’t a 3 Series, at least in the UK.

~~~
qaq
You need to compare highest spec model and US pricing 340i xDrive Premium
starts @ 54K in US

------
ckastner
> _For the first time, Model 3 production (28,578)_

Interestingly enough, the Bloomberg model 3 tracker's [1] estimates appear to
have been quite accurate:

    
    
      2018-03-31: 12,383
      2018-06-30: 39,872
                  ======
            diff: 27,489
    

[1] [https://www.bloomberg.com/graphics/2018-tesla-
tracker/](https://www.bloomberg.com/graphics/2018-tesla-tracker/)

~~~
abhiminator
It's fascinating to observe how close Bloomberg tracker's prediction came in
forecasting the _actual_ production numbers using nothing but the the Vehicle
Identification Number (VIN) of in-the-wild Model 3's as well as those from the
NHTSA database. Talk about the boons of being a publicly traded company.

~~~
ragebol
Sounds a bit like the German tank problem {0]

[0]
[https://en.wikipedia.org/wiki/German_tank_problem](https://en.wikipedia.org/wiki/German_tank_problem)

~~~
nwah1
Fascinating. Excellent reference.

------
Someone1234
That's good news.

As an aside what is the real world version of "technical debt?" Tesla's tent
factories has helped them accelerate manufacturing, but is that a technical
debt they'll have to come back and fix later? I've also read people speculate
it could increase warranty return/recall rates due to contaminants (e.g. dirt,
dust, etc) in the tents, which if true, could be another source of future
debt.

~~~
stetrain
I would think that the real technical debt is inside at their first super-
automated GA line.

They now have the second line in the temporary structure which let them test
some different methods and can provide some pressure relief while they rework
the main GA line.

They have been planning to expand and build new buildings at the Freemont
plant for quite a while now [1], so I would expect the 'Tent' line to move to
a more permanent location eventually.

[1]
[https://www.reddit.com/r/teslamotors/comments/8s9913/teslas_...](https://www.reddit.com/r/teslamotors/comments/8s9913/teslas_tent_was_planned_years_ago_as_part_of/)

Edit: As someone in the reddit comments pointed out, the new Tent/GA4 line is
on the location of an already planned new building (#11 in the drawing), so
perhaps the line stays in place and a more permanent building is built around
it.

------
aerovistae
What I wouldn't give for someone to do a scraping project on HN comments on
past submissions for Tesla, to create a timeline of "predictions Tesla will
fail to meet a certain goal" vs "date of Tesla successfully meeting that
goal."

I would find that really interesting.

~~~
mirceal
Hmm. So Tesla/Musk have really ambitious goals that they often miss. Is that a
bad thing? The way I look at it no. Whenever Tesla announces something you
have to take it with a big grain of salt but that’s about it. Also remember
that they’re attempting something hard / never done before.

If there is something that bothers me about Tesla it’s their attitude when a
crash happens.

~~~
gutnor
> Also remember that they’re attempting something hard / never done before.

Well, building car is hardly something that hasn't been done before. They seem
to be suffering from extreme NIH caused by the illusion that 100% of the stuff
they do has never been done before/need disruption.

That is based on the reports suggesting that Tesla is not failing with its
electric powertrain, rather it is failing in traditional part of the car
assembly which is sad because the experience in those area are massive,
locally and abroad.

So basically, "Is that a bad thing?" Yes, if what I say is true, because it
eats the lead that Tesla has to provide no specific benefit. No, if either
indeed, there is a hard, never done before, and currently unknown ingredient
to Tesla that is going to increase their lead once they get it right.

Or No, because, well competitors are starting to get on the market and Tesla
slowing down a bit give them time to catch meaning a more competitive
landscape, which is good for everyone on the consumer side.

~~~
kamakazizuru
I hear this bit with "traditional car assembly" often. But is it really true?
The powertrain isnt really the only difference - EVs are built fundamentally
differently (and especially the Tesla models) from the ground up as compared
to ICE based cars. If you look at the base series of most large car companies
(on which most variants are eventually based) - they've been around for
decades in some cases - making it easier to tweak and adjust over time, so
production in and off itself hasnt changed that drastically.

~~~
gutnor
> But is it really true?

I don't know. We all know that, as anything, a modern car is very complex by
itself and even the simplest modern production line requires far too much
expertise to understand if you are not working directly in the field. So, you
have to trust reports, which with an overhyped company like Tesla are more
likely than not be laughingly biased in one direction or another.

It is a bit annoying that Tesla has such a track record of failing to reach
their own objectives. It is bad IMO, because Tesla is not really under any
kind of market pressure (no competition, and client queueing for years), their
objective are only investors milestones. As an investor, I would really start
thinking Musk is either delusional, hired the wrong people or is humouring me
because in reality I'm the one lucky enough to be allowed to invest in Tesla
and I should be grateful rather than wasting his time with silly metrics.

It only really matters if you are an investor though.

Consumer win both ways: either Tesla is giving the rest of the market a
chance, or they are ready to revolutionised car production the same way the
Japanese did in the 90's.

------
misja111
That's amazing, but when reading through the numbers in the article this makes
me wonder:

".. Q2 production totaled 53,339 vehicles, a 55% increase from Q1, making it
the most productive quarter in Tesla history by far. For the first time, Model
3 production (28,578) exceeded .."

So the total Model 3 production was 28,756 in Q2, which is on average only
2212 vehicles per week. It seems that they have been able to pull up the
production rate to above 5000 only in the very last week. Nevertheless that's
an astonishing achievement.

~~~
stetrain
Yes, but as far as I know that was the stated goal.

From the May 2nd financial results letter:

"We continue to target Model 3 production of approximately 5,000 per week in
about two months, although our prior experience has demonstrated the
difficulty of accurately forecasting specific production rates at specific
points in time because of the exponential nature of the ramp."

[http://ir.tesla.com/static-
files/1b240f1e-b519-4b40-b14b-fea...](http://ir.tesla.com/static-
files/1b240f1e-b519-4b40-b14b-fea44698c3af)

~~~
bildung
5000 per week also was Musks prediction for december 2017:
[https://twitter.com/elonmusk/status/881757617416056832](https://twitter.com/elonmusk/status/881757617416056832)

~~~
opencl
The goal wasn't 5000 per week, it was 20000 per month. They have achieved the
former but not the latter. This requires actually sustaining the production
rate which has so far been highly violate with lots of temporary total
shutdowns for retooling.

------
sctb
Some other threads:

[https://news.ycombinator.com/item?id=17436604](https://news.ycombinator.com/item?id=17436604)

[https://news.ycombinator.com/item?id=17437408](https://news.ycombinator.com/item?id=17437408)

------
pwinnski
Kudos to Tesla. I've been a somewhat vocal skeptic on a lot of things Tesla-
related, and this is still two quarters later than initially promised, but I'm
still impressed.

It's been hard to tell from the outside whether "late" just meant "we
underestimated this, so we're late", or if it meant "we underestimated this so
badly we'll never get there." Even when I started to believe it would just be
a matter of time, I was concerned that there wouldn't be enough capital to get
here. But flamethrowers or whatever got us here, and I'm impressed.

~~~
slouch
Flamethrowers were Boring Company. Roadster 2 and Semi reservations probably
helped, though.

------
thisisit
When is Tesla's quarterly call? Anyone knows their dial code. Because this is
going to get interesting and I really want to listen to the live call.

~~~
billh
Tesla does a live webcast of these calls on their investor relations site at
[http://ir.tesla.com/](http://ir.tesla.com/)

The next quarterly update will be sometime early August.

------
sidcool
I am pleasantly surprised. Did not expect Tesla to reach that goal before at
least October. Great job Team Tesla. Congratulations. With that aside, it's
going to be even more challenging maintaining the pace.

------
syntaxing
I'm surprised how small the production team is (judging only by the picture).
For some reason I expected there to be much more people.

------
swarnie_
I always find the forced PR photos a bit strange, is this normal for a lot of
companies across the pond?

~~~
SEJeff
In the US Army, they'd make us pose for shoots like this after something we
jokingly called "Mandatory Fun". You can come to this totally optional event
to promote $SOMETHING this weekend, and if you do, you get the day off Monday.
If you don't, you get to scrub the halls, wax the floors, and inspect the
vehicles at the motorpool.

It was optional "technically", but mandatory in reality.

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baggachipz
It's a great day to be a shareholder and owner. :)

~~~
robertk
I agree, as an owner of a total market index fund.

