
Musk Declares Tesla Free of Factory Hell with Targets Intact - prostoalex
http://www.bloomberg.com/news/articles/2016-08-04/musk-declares-tesla-free-from-factory-hell-with-targets-intact
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mikeash
It certainly was interesting to see reactions to Tesla's announcement of last
quarter's production and sales numbers. They had the best production numbers
yet, thanks to massively accelerated production in the last few weeks of the
quarter. But that meant that many cars were in still in transit at the end of
the quarter, which don't count as sales yet, even though they pretty much all
had a customer's name on them. Thus sales were down for the quarter, and even
though it's obvious that this was just because of when the end of the quarter
happened to be, the press was full of "Tesla sales are down, they're so
doomed" stories.

I can never decide whether the people who write these stories can't be
bothered to do even the most minimal digging past the first number they see,
or if they're doing this on purpose. Probably a mix, I guess.

~~~
JumpCrisscross
Tesla forecasted the production of 17,000 cars. They fell short by about 20%.
I think the market was reacting to that more than GAAP figures.

~~~
te
No, they forecasted production of 20,000 cars. They forecasted deliveries of
17,000 cars. Substantial miss on both counts.

Source:
[http://ir.tesla.com/common/download/download.cfm?companyid=A...](http://ir.tesla.com/common/download/download.cfm?companyid=ABEA-4CW8X0&fileid=889927&filekey=27EE2FDA-9C77-4D6A-8CEE-E8DFE45227BA&filename=Q1_2016_Tesla_Shareholder_Letter.pdf)

Edit: fixed link to correct source, as pointed out below. In this pdf, it's on
bottom of page 3, under "Outlook".

~~~
mikeash
Where is that info in that PDF?

Edit: I guess you mean this one:
[http://files.shareholder.com/downloads/ABEA-4CW8X0/200707627...](http://files.shareholder.com/downloads/ABEA-4CW8X0/2007076272x0x889927/27EE2FDA-9C77-4D6A-8CEE-E8DFE45227BA/Q1_2016_Tesla_Shareholder_Letter.pdf)

That does indeed say 20,000. They actually produced 18,345, for a miss of
about 8%. They ramped up production from about 1,000 cars/week to 2,000
cars/week, so being short 1,655 indicates that their production ramp-up was
delayed by about 10 days. Doesn't seem like a very big deal to me, and a
slight miss of estimated production _increases_ is way different from the
"sales are down, Tesla is doomed" that got reported.

~~~
Animats
Tesla added an additional assembly line at the Fremont plant.[1] This doubled
production capacity. Cost about $100M. They already run two 9-hour shifts and
six days a week.

[1] [http://insideevs.com/teslas-2nd-production-line-capable-
pump...](http://insideevs.com/teslas-2nd-production-line-capable-
pumping-3000-tesla-per-week/)

~~~
te
That article is two years old.

~~~
Animats
Good point. Do they have more final assembly lines now, or what? The info two
years ago indicates the final assembly lines were maxed out.

Here's a long video of the assembly process in 2015.[1] This is useful, rather
than the usual quick montage of cool robot scenes. There was a surprising
amount of manual assembly in areas where other manufacturers are automated.

[1]
[https://www.youtube.com/watch?v=AVCCroN7vS0](https://www.youtube.com/watch?v=AVCCroN7vS0)

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beambot
Some perspective... Tesla posted a loss of approx $1 per share. With a budget
of $19.3B, I pay NASA $55/yr (assuming 350M taxpayers of uniform means) in
"losses."

As a tesla shareholder (forget upside and commercial value), that's a small
price to pay for funding a sci-fi future.

Not everything needs to be about ROI.

~~~
mtgx
Maybe Musk should do what Steve Jobs did and say "If you're not a long-term
investor, we don't want you."

The stock price would probably drop a bit after that, but it may be for the
company's best interest in the long term. Tesla needs visionary investors,
too.

~~~
fmihaila
That was Tim Cook.

[https://www.theguardian.com/environment/2014/mar/03/tim-
cook...](https://www.theguardian.com/environment/2014/mar/03/tim-cook-climate-
change-sceptics-ditch-apple-shares)

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dharma1
Here's the call in its entirety btw.

[http://youtu.be/Oo07tHQe-y0](http://youtu.be/Oo07tHQe-y0)

Sounds like he is quite pleased with the progress of their autonomous driving
algorithms.

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grecy
> _“Full autonomy is going to come a hell of a lot faster than anyone thinks
> it will,” he said. “And I think what we’ve got under development is going to
> blow people’s minds. Blows my mind.”_

That's the money quote.

I still think the Model 3 will be fully autonomous without a traditional
steering wheel. It will probably have some ability to take over very rarely.

~~~
binarycrusader
> I still think the Model 3 will be fully autonomous without a traditional
> steering wheel...

That seems highly unlikely; most regulators thus far have been
(unsurprisingly) unwilling to let autonomous cars on the road without some
form of manual control. Given how early we are in the technological
development cycle for autonomous cars, this seems prudent and logical.

~~~
secabeen
They're also pushing hard to convert Model 3 reservations into Model S
purchases. I don't think they'd be doing that if they were going to release a
revolutionary increase in AP in only a year.

~~~
erikpukinskis
Musk has basically said it's mostly a software problem at this point. And if
new Model S's aren't already getting the Autopilot 2.0 hardware yet, they will
be very shortly.

They're pushing reservation conversions because the more cashflow they can
have now the better terms they'll be able to get financing as they move down
their roadmap.

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jgalt212
It's amazing to watch many commenters here try to justify the miss wasn't
really a miss. Or if it was, it was so slight as to not matter.

What's the motivation here? Are people talking their book, or is it idolatry
of Musk?

~~~
mikeash
I assume you're probably referring to me with this comment. I didn't say it
wasn't a miss, merely that the common interpretation of "demand is down, Tesla
is dying" is completely silly once you look at all of the numbers.

