
Tesla Misses Model 3 Production Goals - cookscar
https://www.wsj.com/articles/tesla-misses-model-3-production-goals-1506976496
======
modeless
Actual source:
[http://ir.tesla.com/releasedetail.cfm?ReleaseID=1042449](http://ir.tesla.com/releasedetail.cfm?ReleaseID=1042449)

OT: Sad how difficult it was to find this. The media avoids linking to primary
sources. For example, Engadget's 3 paragraph article contains no less than 5
links back to engadget.com and not a single mention of this source.

~~~
colechristensen
This is a press release which was likely delivered to wsj et al through a wire
service they pay to deliver them piles and piles of press releases. Nobody
quotes those as sources because nobody but news organizations that pay for
them has access to them. A press release is also a rather bad primary source
unlike, say, a research paper or a blog post.

~~~
maxerickson
The text on the Tesla website mentions
[https://globenewswire.com/](https://globenewswire.com/)

Anyone can setup a real time account for free.

Also the WSJ article pretty clearly used the press release as a source, so
mentioning that is a separate issue from whether it is a good or bad source.

(unless you think the WSJ called Tesla and verified specific facts like "4,820
Model S and X vehicles were in transit" vs "The company said 4,820 vehicles
were in transit at the end of the quarter")

~~~
utopkara
The newswire is the distributor of the press release. It is equivalent to
Tesla emailing all major news outlets; just more convenient and reliable. In
short, Tesla is the source.

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Animats
Only 220 Model 3 cars in an entire quarter? There's a big problem somewhere.
That sounds like some key part of the production line doesn't work at all, and
something is being hand-built to get some product out the door. Tesla isn't
saying what's not working. Has anything leaked out?

When something like this this happens, the manufacturer has most of the costs
of full production with the revenue of tiny production. Profitability just got
further away.

As of August 2017, there have been about 63,000 cancellations of Model 3
preorders.[1]

[1] [https://www.recode.net/2017/8/2/16087432/tesla-
model-3-elect...](https://www.recode.net/2017/8/2/16087432/tesla-
model-3-electric-car-manufacture-preorder-cancellations-elon-musk)

~~~
adventured
It's extremely unlikely there's a big problem in the sense that you mean it.
The Model 3 is easier to produce than the Model S and less complex. There's
practically nothing new on the Model 3 that would plausibly be a big thing
that's not working as to hold everything up in the scandalous manner you're
implying (leaks, hand-building, not working, big problems, oh my).

More likely is that Musk set an overly ambitious target, for the hundredth
time, and what they're doing for the quarter they probably should not have
been doing at all. They produced something like 60-80 Model S vehicles in the
first month. Check back in two quarters, if the Model 3 production is down
80%-90% from projections, that will be something meaningful.

~~~
dogruck
I don't think OP's post is as hyperbolic as you characterize it.

The press release makes it clear that there was a major production bottleneck.
Will it get fixed? Very likely. But as of today, they've got a serious
problem.

Absent more data, I think the OP's guesses are plausible and not malicious.

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colechristensen
This isn't news, it's gossip. ~200 instead of ~1500 means the bootstrapping is
a little off schedule.

It's stories like this and the attitude that they're important which gets us
very destructive behaviors like putting production quota ahead of quality.
Production misses are news when they're for substantial cause. Like a 10% miss
for an S or X might be news.

~~~
kec
How is being ~80% under quota not news? Such a large miss means that either
Tesla is being unrealistically optimistic about their production capability,
or they have serious production problems.

~~~
colechristensen
There are something like half a million Model 3 preorders. They just started
production, 200 or 1500 – both are but a rounding error compared to the actual
full production rate. (order of 10k/quarter)

It's something like criticizing someone for running 75 feet instead of 400 in
the first 45 seconds of their third marathon because they had to re-tie their
shoes.

~~~
refurb
Well considering sometimes tripping up in the beginning of a marathon can mean
you lose the race, I'd say it's a very important number.

~~~
colechristensen
Then what isn't an important number? Is everything worth a headline? How do
you select what is and is not noteworthy or important for an investor or news
consumer?

Why is Tesla missing it's Model 3 targets at the very beginning of the
production run (hundreds of cars) more relevant than the Model S and X
productions exceeding targets by "several thousand"?

Looking at the first two columns of WSJ tech page that lists that article ...
articles are on (Apple, Tesla, Google, Facebook, Goldman Sachs/Bitcoin, Uber).
Looking at that list of companies, would you guess that WSJ's editors are
pushing the most relevant and important information, or the information their
readers want the most? One is gossip, the other is news. People gravitating
towards the news they want to see and news producing information tailored for
their audience is the greatest force of evil in the 21st century. Popularity
drives every news outlet to the bottom until you can't tell the difference
between TMZ and WSJ.

Where do I go if I want to read actual news instead of the business gossip
column?

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nicolashahn
Based on his track record, Musk often sets unrealistic timeline goals (and
unrealistic engineering goals, but he usually meets those). This has happened
multiple times with both Tesla and SpaceX, not surprised this happened.

~~~
kchoudhu
You understand that missing material estimates has legal implications if you
do it too many times? Regulators can and do start thinking that you have
something to hide.

Tesla isn't a startup working out of someone's garage -- it is a large player
in a heavily regulated capital market. Estimates and guidance are for
investors, not for people on the street: they are supposed to _mean_
something.

~~~
prostoalex
This is not a material estimate, this is an estimate that Tesla, for whatever
reason, volunteered.

Other manufacturers don't really do that, which is why you rarely see the
headlines of Dodge Durango being three weeks behind schedule.

~~~
slededit
Material in this sense means that it has relevance to the share price of the
stock. Tesla's Model 3 ramp up schedule is material information. You are right
they could have not volunteered it, but since they did they have a duty to
ensure it was the most accurate estimate they had at the time of release.

If it turns out that they knew or should have known they wouldn't make the
schedule then they are liable for misleading investors.

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lwansbrough
Interesting that the author Tim Higgins writes almost exclusively stories of
bad news regarding Tesla.

~~~
whyenot
Maybe there hasn't been any recent good news from Tesla. It looks like Tim
Higgins also writes stories on other things related to cars and tech[1].

1\.
[https://www.wsj.com/news/author/8483](https://www.wsj.com/news/author/8483)

------
brians
What were the targets? Apparently 1500 model 3s. That might just be a months
delay in startup; we'll know for sure in 3 months.

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retSava
So 260 instead of 1500 model 3's. Bootstrapping has a lot of uncertainties so
that's not very unlikely even. What's stood out to me was this,

> In total, we expect to deliver about 100,000 Model S and X vehicles in 2017,
> which would be a 31% increase over 2016.

31% increase from 2016, that's a huge bump in delivery and I wonder how/if
this affected the model 3 production.

~~~
dx034
As a car company with some years of experience you should be able to factor in
uncertainties. They could've made the estimate less optimistic, giving some
upside in case everything goes right. Using the best case scenario as your
base case is not necessarily the smartest thing (but can be good for
marketing).

~~~
retSava
Might very well be exactly what they did; it might be that 1500 was the tip of
the bathtub curve so to speak and 260 was on the low end. We'll never know.

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jcvhaarst
So Tesla is selling 100K cars per year, which according to
[http://carsalesbase.com/us-car-sales-data/tesla/](http://carsalesbase.com/us-
car-sales-data/tesla/) would translate to about 0.5% market share.

Looks like they have a long way to go before they will be a threat to the big
car companies..

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dogruck
Anybody have details on the Model 3 production bottlenecks and resolutions?

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deevolution
I see this as buy opportunity for tesla stocks.

~~~
jansan
I don't. The price already includes a picture perfect future for Tesla, and
these news do not make me confident that the future will be that perfect.

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gcb0
without paywall [https://jalopnik.com/tesla-misses-model-3-production-goal-
ov...](https://jalopnik.com/tesla-misses-model-3-production-goal-over-
bottleneck-1819083019)

~~~
arikr
@dang, can you swap it out with this one?

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refurb
It will be interesting to see if this is just a delay or something more
serious with production.

