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Tesla meets Q3 production goals of 50,000 to 55,000 Model 3s
- jsight 8y agoAt least they were smart enough to aim a little lower this time. People love to complain about marginally too ambitious goals.
- SCAQTony 8y agoThis is very good news. If they can do this for ten more quarters there will be less carbon in the atmosphere and an oil glut for 2-million-barrels of oil a day will be removed from daily demand according to Bloomberg — Great graphs in the article too: https://www.bloomberg.com/features/2016-ev-oil-crisis/ https://www.bloomberg.com/features/2016-ev-oil-crisis/
- marcell 8y ago> 2-million-barrels of oil a day In case anyone's looking for context on this, daily demand for oil is currently around 99-million-barrels a day, so this would be a 2% drop: https://www.statista.com/statistics/271823/daily-global-crude-oil-demand-since-2006/ https://www.statista.com/statistics/271823/daily-global-crud... Obviously just a start, but still this sounds great to me.
- ams6110 8y agoIs there a market for 50,000+ Tesla 3s for the next 10 quarters?
- toomuchtodo 8y agoThey still have a ~400k net reservation backlog (based on investor call math). So close enough? Tesla has demand levers available to stoke additional demand when supply is not constrained. They'll have sold almost half a million Model 3s with no active marketing effort (besides a Youtube promo video here and there) by the time the backlog has been worked through. Crude (Brent and WTI) is trending higher [1], which is only going to help EV sales. EVs are already a slam dunk TCO-wise in most of the country except where fuel is still cheap in the Midwest/Appalachia [2]. [1] https://www.bloomberg.com/energy https://www.bloomberg.com/energy [2] https://www.gasbuddy.com/GasPriceMap?z=4 https://www.gasbuddy.com/GasPriceMap?z=4
- kgwgk 8y agoReservations are not necessarily for a $50k car. $35k plus a $7k tax credit is quite different from $50k and no tax credit.
- toomuchtodo 8y agoThat wasn't in the comment I replied to. OP asked about # or cars, not options/trim and tax incentives available. I assume Tesla will maximize for tax credits (soak up those federal dollars), and then reduce the price if necessary for their vehicles if demand is decreased by the credit phaseout. International orders (which are still in queue) aren't impacted by the Tesla vehicle credit phaseout. There's a reason they're going to push every car they can in the US first before that credit is gone.
- kgwgk 8y agoThat’s true, but it’s not yet clear when they will be able to sell lower-priced models without increasing the cash-bleed.
- toomuchtodo 8y agohttps://www.youtube.com/watch?v=pAS-yjWj9DY https://www.youtube.com/watch?v=pAS-yjWj9DY Munro Teardown Shows Tesla Model 3 Solidly Profitable [video] (youtube.com) https://news.ycombinator.com/item?id=17542864 https://news.ycombinator.com/item?id=17542864 (HN Thread) Animats mentions labor costs top of thread, which have been falling in Fremont now that they've hitting their stride (rumor I've heard, not material info, can't provide a citation). If you're interested, highly recommend being on the investor call next month for Q3 rundown.
- gamblor956 8y agoThat video, and articles on the teardown, confirm that the luxury-level-priced Model 3s are solidly profitable...which they should be, since no major automaker sells luxury vehicles at a loss per unit. The question is whether Tesla can sell Model 3s at the originally claimed $35k, which is highly questionable. Indeed, Munro himself sells, "I think $36,000 Model 3s will be rare as hen's teeth. I don't see how they could make money at $36,000."
- travisoneill1 8y agoI would bet that there is much more. I would by a $35K model 3 if I could get one, but I'm not going to go on a wait list for years. I think there are a lot more people who feel the same way and that is not accounted for in the already impressive backlog numbers.
- Skunkleton 8y agoI don't know. But I do know that with our current charging infrastructure electric cars are out of reach for most of the population. The barrier of entry for an all electric is 1) $40-60k dollars for the car, 2) somewhere convenient to charge which today means owning a house , 3) the ability to sacrifice the flexibility of a gas engine. Any one of these issues would eliminate huge market segments. Once the used market for the ~35k model 3 starts to pick up, the first problem will be reduced of course, but maintenance costs remain to be seen.
- rgbrenner 8y agoThe article doesn't actually say 50k over 10 quarters. It projects a 60% annual increase each year until 2023 (or 17 quarters). So this is a much higher number that 500k. There are 1 billion cars on the road. 80m are sold annually. So 500k is literally a drop in the bucket.. you can't get a 2% decrease in oil by selling 500k in 17 quarters, 10 quarters.. or even 4 quarters. To get to 2% of cars, you would need to sell about 500k every quarter.
- toomuchtodo 8y ago"Cumulative passenger EV sales are set to hit 4 million this week. This includes battery electric passenger vehicles and plug-in hybrid passenger vehicles. If we include e-buses, the 4 million milestone was reached at the beginning of July. The time needed to reach each consecutive million EVs sold has shrunk from 17 months for the second million to 6 months for the fourth million. The next million EVs will take just over 6 months. We expect the five-millionth EV to be sold in March 2019." I won't quote the entire article here, but it's worth a few minutes of time. The EV sales rate is climbing rapidly; not exponentially, but much faster than linearly. https://about.bnef.com/blog/cumulative-global-ev-sales-hit-4-million/ https://about.bnef.com/blog/cumulative-global-ev-sales-hit-4...
- rgbrenner 8y agoThat's great... but the thread I'm replying to starts by claiming Tesla can make a 2% impact by selling 50k cars for 10 quarters (absolutely false). And the target is not 500k cars over 10 quarters.. it must be an order of magnitude higher than that to make the claimed impact. Even the article doesn't project the industry (not just Tesla) will reach these numbers in 10 quarters. Close to double that.
- xoa 8y ago>In case anyone's looking for context on this, daily demand for oil is currently around 99-million-barrels a day, so this would be a 2% drop Keep in mind too though that direct percentages can have non-linear effects. Oil is very fungible, but the inputs have a wide range of extraction costs and levels of pollution/technical risk/geopolitics involved. A 2 million barrel a day reduction isn't going to shave off every input source equally, and oil from sands or ultra deep sea or whatever all have different kinds of effects. If it kills the worst first that could have a bigger benefit then a straight 2% would suggest. Furthermore, there is a lot of oil infrastructure that is fantastically capitally expensive, most particularly refineries, that will not be equally effected. I think maximum plant capacity tends to be around 800k-900k barrels a day and many are smaller, and running subcapicity isn't ideal. Not all types of oil or products refineries produce are equal either, increasing electric cars would presumably primarily affect refined products, consider for example this piece[0] on refining capacity, and then consider what a significant bigger reduction could mean. Finally at some point we should start to see more tipping points for economies of scale, the spread of enhanced charging networks, continuing spread of solar, and just changing public consciousness and people become more familiar with it. Public interest is racing way, way ahead of what the energy industry wants. So even 2% worldwide in that short a time would be a real deal and could also just be the shallow end of an S-curve. Next 5 years will be very interesting! 0: https://www.bloomberg.com/news/articles/2018-03-06/an-oil-refining-capacity-wave-is-coming https://www.bloomberg.com/news/articles/2018-03-06/an-oil-re...
- nabla9 8y ago62.7% of the US electricity is created using fossil fuels in 2017, half of that coal, other half natural gas. (1.3% solar, 6.3% wind) https://www.eia.gov/tools/faqs/faq.php?id=427&t=3 https://www.eia.gov/tools/faqs/faq.php?id=427&t=3
- toomuchtodo 8y agoNatural gas, wind, and solar are rapidly pushing out coal and nuclear (except where nuclear is receiving a zero carbon subsidy). Oil is not used for electrical generation in mainland USA. 30% of electricity in California already comes from renewables. https://www.eia.gov/outlooks/steo/report/electricity.php https://www.eia.gov/outlooks/steo/report/electricity.php
- cwal37 8y agoOil is not typically a major resource, but in cold winters in gas pipeline-constrained areas, i.e., New York and New England, there is quite a bit of oil generation. Even in high load summer days when gas is available but the load is much higher than the winter you'll see a bunch of oil units turn on. Oil-fired and dual-fuel units in those RTOs (NYISO and ISO-NE) also make up a pretty large amount of the total installed capacity.
- deleted 8y ago[deleted]
- nabla9 8y agoNatural gas is not that good. CO2 per energy produced per million Btu: Natural gas 117.0 Gasoline 157.2
- toomuchtodo 8y agoNatural gas is offsetting coal, not gasoline. Gasoline consumption is overwhelmingly through light vehicles (sedans, SUVs, pickup trucks). Coal (anthracite) 228.6 Coal (bituminous) 205.7 Coal (lignite) 215.4 Coal (subbituminous) 214.3 As you can see, natural gas has half the CO2 impact per million btus as coal. It's a great bridge until wind, solar, and utility scale batteries take over (natural gas ramps quickly, coal does not, and is much cleaner).
- debt 8y agoI think it's probably closer to 1 million barrels/day if you factor in all the emissions and pollutants associated with mining the nickel/lithium for the batteries. https://www.theguardian.com/sustainable-business/2017/aug/24/nickel-mining-hidden-environmental-cost-electric-cars-batteries https://www.theguardian.com/sustainable-business/2017/aug/24...
- anoncoward111 8y agoI always love when people thing manufactured goods are made from thin air and otherwise renewable resources :)
- murukesh_s 8y agoHow about power generation from non renewable sources? Like coal or gas plants
- kitsunesoba 8y agoEven if your EV is charged using a dirty power source, it’s still a net benefit to the environment. ICE vehicles are hideously inefficient compared to power plants, which have much better ratios of produced energy to consumed fuel. Those dirty power plants can also be replaced by clean power plants, instantly making all the EVs they’re charging dramatically cleaner. A dirty ICE vehicle is always going to be a dirty ICE vehicle, no matter what.
- murukesh_s 8y agoGood points! >ICE vehicles are hideously inefficient compared to power plants. Any source for that? I was wondering about power transmission losses as well.
- Pica_soO 8y agoIf you love your environment, you drive the oldest available running rust bucket. Manufacturing a car produces 50% of the emissions it has during its lifetime. https://www.theguardian.com/environment/green-living-blog/2010/sep/23/carbon-footprint-new-car https://www.theguardian.com/environment/green-living-blog/20...
- deleted 8y ago[deleted]
- rgbrenner 8y agoThat article extrapolates growth.. purely a projection based on Tesla not just producing 50k cars a quarter, but ramping up production even higher along with additional manufacturers. 2nd, where did you get 10 quarters from? The earliest, most optimistic projection in that article is 2023 -- That's 17 quarters. Or 2025 - 25 quarters. Or perhaps it won't reach it until much later.
- femidav 8y ago"If they can do this for ten more quarters there will be less carbon in the atmosphere" - yeah, let our plants starve.
- cjhopman 8y ago> Tesla had quite the ambitious Model 3 production goal for this quarter They claimed to be able to consistently make 5000/week at the beginning of the quarter and that they'd be at 6000/week in August. 50000/quarter is <4200/week. That doesn't seem like "quite the ambitious" goal. If they were actually consistently making 5000/week at the beginning of the quarter, they could've taken 2 weeks off, just easily continue at the same pace that they were already doing and still hit that goal.
- deleted 8y ago[deleted]
- kccqzy 8y agoIt's not like every week is the same. On a typical week they could make 5000, but on some weeks (say Labor Day), the production line has planned shutdowns.
- drewg123 8y agoCan they sell them at a profit, or have they saturated the market now? I heard they actually have enough inventory that they were doing same day deliveries and offering end-of-quarter incentives. That's great for customers, but not so much for a company that is not profitable.
- TrainedMonkey 8y agoThey are still manufacturing premium version. People are still waiting on $35k one.
- heisenbergs 8y agoGross margins for model S and X are 25%+. The model 3 is supposedly profitable, at the scale that they have now achieved. Tesla's big spend is on R&D on new product lines, and ramping up production. In other words: their core business has long been cash flow positive. It's the growth that is requiring all the cash and creating short term losses.
- madamelic 8y agoI mean look at Amazon. They are basically on their last legs after doing the same idea. /s
- sokoloff 8y agoAnecdotal, but a friend's model 3 was originally scheduled for delivery today and got a text last night letting them know it would be delayed about a week, so it's not clear if they're starting to fluff Q4 numbers or if there was an operational or logistics issue of some sort.
- einarfd 8y agoSo far no Model 3 has been sold outside of the USA, so it is somewhat premature to worry about having saturated the market.
- morbm 8y ago
- dragontamer 8y agoHmmm... this seems to be a miss of the goal actually. Here's the Q2 2018 earning call: https://seekingalpha.com/article/4193497-tesla-tsla-q2-2018-results-earnings-call-transcript https://seekingalpha.com/article/4193497-tesla-tsla-q2-2018-... > We continued to achieve 5,000 Model 3s per week, or 7,000 combined S, X and 3, multiple weeks in July, showing that, so we're able to do this on a sustained basis. And we expect to, in the absence of a force majeure or some very unexpected event, be able to achieve an average of 5,000 Model 3s or above for Q3 and 2,000 Model S, Xs or above per week for Q3 as well. So essentially, 7,000 cars a week plus on average for Q3. An average of 5000/week would be 13-weeks * 5000 == 65000. If Tesla makes only 55,000 M3 cars, then that's a miss by 10,000.
- melling 8y agoModel 3 production has dropped from 6000 a week to under 3000. https://www.bloomberg.com/graphics/2018-tesla-tracker/ https://www.bloomberg.com/graphics/2018-tesla-tracker/ Not sure what’s going on.
- meritt 8y agoBloomberg's model is not whatsoever accurate on a week-to-week basis. They overestimated production by quite a bit earlier this month [1], revised the model downward by about 6000 total units, and now have to drastically lower their estimated production rates in order to not still overestimate totals. [1] https://www.bloomberg.com/news/live-blog/2018-03-12/insights-on-telsa-model-3-bloomberg-tracker#5BA5436968BC0000 https://www.bloomberg.com/news/live-blog/2018-03-12/insights...
- TrainedMonkey 8y agoYou are not accounting for several planned closures to upgrade/maintain the production line.
- jaclaz 8y agoWell, if the closures were planned they wouldn't be part of the "force majeure or some very unexpected event",so the 65,000 intended (now missed) target still holds.
- Proven 8y agoWatch out for those lost bumpers on a rainy day!
- electriclove 8y ago"The automaker had been guiding a production of 50,000 to 55,000 Model 3 vehicles for the third quarter. According to a reliable source familiar with Tesla’s production, the automaker had a strong week of production and managed to bring the total number Model 3 produced to over 51,000 vehicles."
- joeblau 8y agoAnd now they need to deliver the cars. I have two colleagues who are waiting for their cars. Apparently the deliver process (which Elon noted on Twitter) is pretty hectic right now.
- ben174 8y agoI've heard the horror stories, but delivery for me was amazingly smooth. I signed a few pages of papers which were already prepared, and got a 10 minute tutorial on features, and drove out of there less than a half hour after I arrived. Best car buying experience ever.
- exhilaration 8y agoWas that enough time to go through the Model 3 delivery checklist? https://model3slo.org/model-3-delivery-checklist/ https://model3slo.org/model-3-delivery-checklist/ With all the manufacturing defects we've been hearing about, I would think that purchasers should take their time inspecting the vehicle.
- maherbeg 8y agoThey have a 2 days no questions asked return policy, including paint. We had plenty of time to inspect ours and then do an even deeper inspection at home. The car is nearly perfect!
- joeblau 8y agoMy Model X buying experience was great too. I just have a lot of friends who are less than happy. One of my referrals got a Model X that was supposed to be brand new and had over 100 miles on it. Talking to my colleague today who worked at Tesla and has been in the auto industry for a few decades, he said that a new car should have less than 8 miles on it. I had a great experience, but I also bought my car a year ago.
- calvinbhai 8y agoNo wonder the Tesla hating incumbents (ICE manufacturers, car dealerships in US/Canada, Big Oil Industry worldwide) are all out against Musk in every possible way.
- mikeash 8y agoThe pace of their growth is pretty amazing. The year I bought mine, 2015, they made just over 50,000 cars. Now they’ve made that many on one fourth the time, of just one model! Add in their other models and this quarter’s numbers are close to the number they made in 2016. They have not met their goals, but that’s only because their goals are crazy ambitious.
- Shivetya 8y agoI have mine, having taken delivery at the end of August and it was ordered at the beginning of the same. Not a previous owner and did not reserve. Recently completed a 1600+ mile round trip with it. As a car it is very competent, fun to drive, and well designed inside and out. As an EV, Tesla cars are in a league of their own. Build quality was very good, I do have three areas that are not as tight as I want but I will take it to the local service shop and let them tell me my options. Are EVs ready for prime time? If your primary usage is local then yes. Even on our trip we needed three stops and the time charging plus to and from added over two hours each way. That can take a "tolerable" nine hour drive and push it into "well....". Plus the planning required to insure adequate range at your destination where you might be anchored to the nearest SC. (120v is desperation, 240/20a is minimum realistic and that is still but 12/15 miles ranged added per hour!) While they will continue to add features over the life time of the car it does lack some simple quality of life attributes that I have had in cars more than a decade ago. From the mundane as to real bluetooth audio controls with playlist support and maximum audio startup to the required blind spot monitoring which apparently they will never put in the mirrors where it needs to be. Traffic aware cruise control works very well, auto steer at my current software level is good for 95% of the highway travel we had. Though cruise control's default speed is the posted limit and that can be damn annoying when that is lowered by weather or even construction - you cannot stop it - it will only assume your current speed if lower than what the maps say if there is a car in front of you or your going faster. Still great news to hear, I like mine. Was a great step up from the Chevy Volt which sold me on EV driving. It isn't for everyone but give it ten years and it might be the default choice.
- dmode 8y agoTesla has basically won
- partingshots 8y agoI wonder how this will affect the upcoming earnings report. I think we’ll have to see how it ultimately is going to mesh with the ongoing SEC investigation into Musk.
- fourpointfive 8y agoThe phone call will be a stream of champaign bottles being uncorked followed by a "thank you".
- partingshots 8y agoWhy did you make a new account just to comment on this?
- fourpointfive 8y agoThe account wasn't created for this thread. Why are you lying? Do you enjoy slandering people on the internet?