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The backlog of Model 3 reservations is rumored to be over 400,000. Of course I’ve never seen the split out of reservations for $35k variant versus the currentl

by jmpman 8y ago

The backlog of Model 3 reservations is rumored to be over 400,000. Of course I’ve never seen the split out of reservations for $35k variant versus the currently available $50k+ variety. (Yes it would be possible for Tesla to calculate the demand signal even though people waiting for a $35k variety look like customers that haven’t use the configurator) My hypothesis is that his financial model needs more customers of the $50k variety, isn’t seeing the demand, and needs to quickly go private before the cash flow becomes problematic again. The evidence I have to support this hypothesis is the lead time for recent dual motor Model 3. It’s very short. Once that demand dries up, all that’s left is a horde of angry masses waiting for their $35k car that they were expecting to arrive with a $7500 tax credit. Of course my hypothesis is ignoring international sales, which may provide a large enough buffer of premium model demand to keep this ship afloat.

Qworg 8y ago
The recent push to get Model 3's out with hand labor is going to wreck them in about six months as the recalls and repairs start to roll in. Tesla had all sorts of tolerance problems early and moving to hand assembly in a tent won't improve it.
- bogomipz 8y ago
  As someone who doesn't follow Tesla development very closely I am curious is "hand labor" still how Teslas are being produced? I remember hearing this a while back but thought maybe some of the delays in ramping up production might have been due to switching to an automated/robotic process. Is this not the case?
  - sergers 8y ago
    To hit the 5000 in one week (technically took them 8 days), they setup additional assembly lines in tents, and additional hand labor. Hand labor, working extra shifts, is how they hit their mark. They continue to use it while they address the automation challenges
    - bogomipz 8y ago
      Oh wow. That doesn't sound sustainable. Is there any concern about quality and consistency of cars produced by "hand labor" in tents? Or is that a non-issue?
      - Qworg 8y ago
        Definitely. Robots aren't used in factories for speed, primarily. They're used for consistency and quality control.
- nickik 8y ago
  Stop spreading FUD. The Model 3 is not produce with 'hand labor', in fact pretty much every single thing you said is baseless crap. They did take out robots of some parts of the assembly line, but substantial parts of the overall production is still highly automated, more so then many manufacturers. The tend actually contains a new assembly line where they use many of the robots they took out to build a new line. One line is a bit more labor then the other and they are experimenting. From pretty much later reviews and the companies own statements you can see that the fit and finish has massively improved and the quality of the mass produced car is competitive.
nickik 8y ago
That's a pretty wild assumptions. The best most reliable teardown and analysis of the Model 3 said it was profitable at 35$ even potentially extremely profitable (30% margin). Given their production numbers are now quite stable at a high level and continue to grow I see absolutely reason for most of your assumptions. Producing higher value models in the initial production is highly sensible because higher margins at low production give you better cash flow. Essentially this means they can produce a profit on every car, rather then starting with per car loses and then moving to profits.
- jmpman 8y ago
  “We assume the base version at $35,000 would lose about $5,900 per car.“ https://markets.businessinsider.com/news/stocks/tesla-model-3-has-next-gen-military-grade-tech-ubs-says-but-will-never-turn-profit-2018-8-1027468439 https://markets.businessinsider.com/news/stocks/tesla-model-... Is this UBS analysis more reliable than the one indicating a 30% margin for the base model?

by jmpman 8y ago

Qworg 8y ago

The recent push to get Model 3's out with hand labor is going to wreck them in about six months as the recalls and repairs start to roll in. Tesla had all sorts of tolerance problems early and moving to hand assembly in a tent won't improve it.

bogomipz 8y ago
As someone who doesn't follow Tesla development very closely I am curious is "hand labor" still how Teslas are being produced? I remember hearing this a while back but thought maybe some of the delays in ramping up production might have been due to switching to an automated/robotic process. Is this not the case?
- sergers 8y ago
  To hit the 5000 in one week (technically took them 8 days), they setup additional assembly lines in tents, and additional hand labor. Hand labor, working extra shifts, is how they hit their mark. They continue to use it while they address the automation challenges
  - bogomipz 8y ago
    Oh wow. That doesn't sound sustainable. Is there any concern about quality and consistency of cars produced by "hand labor" in tents? Or is that a non-issue?
    - Qworg 8y ago
      Definitely. Robots aren't used in factories for speed, primarily. They're used for consistency and quality control.
nickik 8y ago
Stop spreading FUD. The Model 3 is not produce with 'hand labor', in fact pretty much every single thing you said is baseless crap. They did take out robots of some parts of the assembly line, but substantial parts of the overall production is still highly automated, more so then many manufacturers. The tend actually contains a new assembly line where they use many of the robots they took out to build a new line. One line is a bit more labor then the other and they are experimenting. From pretty much later reviews and the companies own statements you can see that the fit and finish has massively improved and the quality of the mass produced car is competitive.

nickik 8y ago

That's a pretty wild assumptions. The best most reliable teardown and analysis of the Model 3 said it was profitable at 35$ even potentially extremely profitable (30% margin). Given their production numbers are now quite stable at a high level and continue to grow I see absolutely reason for most of your assumptions. Producing higher value models in the initial production is highly sensible because higher margins at low production give you better cash flow. Essentially this means they can produce a profit on every car, rather then starting with per car loses and then moving to profits.

jmpman 8y ago
“We assume the base version at $35,000 would lose about $5,900 per car.“ https://markets.businessinsider.com/news/stocks/tesla-model-3-has-next-gen-military-grade-tech-ubs-says-but-will-never-turn-profit-2018-8-1027468439 https://markets.businessinsider.com/news/stocks/tesla-model-... Is this UBS analysis more reliable than the one indicating a 30% margin for the base model?