4 ms·

Tesla Model 3 is now officially the best-selling electric car in the US

32 points by evo_9 9y ago

dingo_bat 9y ago
But according to every analyst and their dad tesla is going bankrupt any day now.
- bdcravens 9y ago
  Not mutually exclusive.
- sunstone 9y ago
  More than a few analysts (shore sellers?) just looked at Tesla's cash burn over the past three years and projected that investment flow forward. This thinking doesn't appreciate that once the Model 3 manufacturing system is paid for most of that capital expenditure will cease. The tricky part is ironing out the wrinkles of that new system, which doesn't necessarily require a lot of new capital.
  - skgoa 9y ago
    > This thinking doesn't appreciate that once the Model 3 manufacturing system is paid for most of that capital expenditure will cease. That's not how this works. You can't just stop investing in capital. Especially not when you have promissed to produce a semi, a Roadster 2.0 and a Model Y, the production capacity for none of which exists right now.
    - sunstone 9y ago
      The semi and the Roadster are low volume products that will take no where near the investment in infrastructure for their manufacture as the model 3. The model Y maybe higher volume and require more capex but it's unlikely to start until the model3 manufacturing has been sorted out and its cashflows have become steady and predictable. That's why Musk can say there will be no more capital raises for Tesla this year.
Robotbeat 9y ago
This is what will most likely happen (with respect to production rate): Tesla will continue to draw the ire of the naysayers/shortsellers in the media for the next year or so. Then, by 2021 or so, we'll look back at a company making over a million electric cars per year at high margin, dwarfing the entire rest of the electric car production rate (with the possible exception of China...). Doesn't mean Tesla will be worth $100s of billions or will solve self-driving or anything like that. But exponential ramp-ups tend to catch people off-guard after hearing small numbers at the beginning of the ramp and early delays.
- buvanshak 9y ago
  >Then, by 2021 or so, we'll look back at a company making over a million electric cars per year at high margin, dwarfing the entire rest of the electric car production rate.. Wouldn't the other companies ll be able to sell them at even reduced profit/cost and in a larger scale, because they have a large variety of other cars to draw profit from, thus capturing/grabbing the market completely out of Tesla's hands?
  - Robotbeat 9y ago
    That is possible! But not likely, as most of the other car manufacturers have slow-rolled EVs until now, preferring press releases to progress, compliance cars to real engineered EVs. In the US, at least, automobile manufacturers have been lobbying against fuel efficiency standards that basically require them to make EVs. And they've succeeded. Car makers talk out of both sides of their mouth on EVs, and their slow-rolled EV deployment shows they really don't believe in it. Tesla still has a strong edge (cemented with the Supercharger network that is still unrivaled by any other network) and is beefing up manufacturing as well, to the point that long-term they may be able to beat the status quo for car manufacturing automation as well. It depends. Are traditional car makers going to continue to lobby against fuel standards instead of actually deploying EVs at scale? If so, Tesla will be fine.
    - buvanshak 9y ago
      > they may be able to beat the status quo for car manufacturing automation as well.. What is the status quo? And What is this idea that they ll be able to beat it, based on?
skgoa 9y ago
(in the one quarter they made a huge, unsustainable effort to push production rate as high as possible)
jacquesm 9y ago
> If Tesla can indeed maintain its current production rate That's the key sentence, and with the number of people involved in producing a Model 3 they will be hard pressed to keep that up without fixing the underlying issues with the production line. But they clearly did everything they could to end the quarter on a high note and investors bought it so props to Elon Musk for buying himself another 90 days. Do keep in mind that the original projection for end of Q1 production volume was 5000 cars / week, not 2500 so it isn't nearly the coup that it is made out to be and it came at the expense of their other production lines. It will be interesting to see how much those other models (S and X) dropped in production volume at the end of Q1. That will tell the real story.

32 points by evo_9 9y ago

dingo_bat 9y ago

But according to every analyst and their dad tesla is going bankrupt any day now.

bdcravens 9y ago
Not mutually exclusive.
sunstone 9y ago
More than a few analysts (shore sellers?) just looked at Tesla's cash burn over the past three years and projected that investment flow forward. This thinking doesn't appreciate that once the Model 3 manufacturing system is paid for most of that capital expenditure will cease. The tricky part is ironing out the wrinkles of that new system, which doesn't necessarily require a lot of new capital.
- skgoa 9y ago
  > This thinking doesn't appreciate that once the Model 3 manufacturing system is paid for most of that capital expenditure will cease. That's not how this works. You can't just stop investing in capital. Especially not when you have promissed to produce a semi, a Roadster 2.0 and a Model Y, the production capacity for none of which exists right now.
  - sunstone 9y ago
    The semi and the Roadster are low volume products that will take no where near the investment in infrastructure for their manufacture as the model 3. The model Y maybe higher volume and require more capex but it's unlikely to start until the model3 manufacturing has been sorted out and its cashflows have become steady and predictable. That's why Musk can say there will be no more capital raises for Tesla this year.

Robotbeat 9y ago

This is what will most likely happen (with respect to production rate): Tesla will continue to draw the ire of the naysayers/shortsellers in the media for the next year or so. Then, by 2021 or so, we'll look back at a company making over a million electric cars per year at high margin, dwarfing the entire rest of the electric car production rate (with the possible exception of China...). Doesn't mean Tesla will be worth $100s of billions or will solve self-driving or anything like that. But exponential ramp-ups tend to catch people off-guard after hearing small numbers at the beginning of the ramp and early delays.

buvanshak 9y ago
>Then, by 2021 or so, we'll look back at a company making over a million electric cars per year at high margin, dwarfing the entire rest of the electric car production rate.. Wouldn't the other companies ll be able to sell them at even reduced profit/cost and in a larger scale, because they have a large variety of other cars to draw profit from, thus capturing/grabbing the market completely out of Tesla's hands?
- Robotbeat 9y ago
  That is possible! But not likely, as most of the other car manufacturers have slow-rolled EVs until now, preferring press releases to progress, compliance cars to real engineered EVs. In the US, at least, automobile manufacturers have been lobbying against fuel efficiency standards that basically require them to make EVs. And they've succeeded. Car makers talk out of both sides of their mouth on EVs, and their slow-rolled EV deployment shows they really don't believe in it. Tesla still has a strong edge (cemented with the Supercharger network that is still unrivaled by any other network) and is beefing up manufacturing as well, to the point that long-term they may be able to beat the status quo for car manufacturing automation as well. It depends. Are traditional car makers going to continue to lobby against fuel standards instead of actually deploying EVs at scale? If so, Tesla will be fine.
  - buvanshak 9y ago
    > they may be able to beat the status quo for car manufacturing automation as well.. What is the status quo? And What is this idea that they ll be able to beat it, based on?

skgoa 9y ago

(in the one quarter they made a huge, unsustainable effort to push production rate as high as possible)

jacquesm 9y ago

> If Tesla can indeed maintain its current production rate That's the key sentence, and with the number of people involved in producing a Model 3 they will be hard pressed to keep that up without fixing the underlying issues with the production line. But they clearly did everything they could to end the quarter on a high note and investors bought it so props to Elon Musk for buying himself another 90 days. Do keep in mind that the original projection for end of Q1 production volume was 5000 cars / week, not 2500 so it isn't nearly the coup that it is made out to be and it came at the expense of their other production lines. It will be interesting to see how much those other models (S and X) dropped in production volume at the end of Q1. That will tell the real story.