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>The production ramp for the Y is expected to be much better than the model 3. There's two announced locations (Reno and China). Tesla also has substantial expe

>The production ramp for the Y is expected to be much better than the model 3. There's two announced locations (Reno and China). Tesla also has substantial experience building the model 3, and the Y shared about 75% of the parts. Additionally the model Y is a very conservative design. Same motors, same batteries, same nav, same display, same steering wheel, same seats, same autonomous hardware, same sensors, etc. The announced differences I've heard of are low tech tings like the chassis and suspension. Nothing crazy like the model X gull wing doors to throw a schedule off. So let's see if I have this right: they reveal the Model Y 1.5 months ago, and say it's available in ~1 month of purchasing. From what everyone says, they hacked up a Model 3 and people drove in a prototype. Now we hear Tesla don't even know if they're going to build it in China or California. But don't worry, they've ordered all the tooling and machinery, even though they don't know which factory it'll be built in. I'm am constantly astonished that people still believe what is happening over there. What will it take for people to realize this is a desperate company?

sliken 8y ago
Elon's vision is to take over the world automobile market quickly. It's impressively how close he's come. From zero to #1 since 2012 in premium cars is an almost unbelievable achievement. Originally the plan was announced that the model Y would be produced in new assembly lines in Reno, then later the lower end model Ys would be produced in China. However since then the model 3, S, and X demand had dropped significantly, at least in the USA. They are developing markets in the EU, but delivery logistics, safety certifications, dealer networks, and related have delayed things. Reduced tax incentives in the USA have also hurt demand locally. My speculation is that Elon wanted all 4 model 3 assembly model 3 lines in Fremont to stay producing the model 3. But now after Q1 they are considering converting a model 3 line in Fremont to the model Y. This will save significant money since with 75% of the same parts, but of course will reduce model 3 production capacity. How much this makes sense depends on if Panasonic keep up with the battery demand and how much can the new EU model 3 demand make up for the decreasing USA model 3 demand. I suspect there will be related announcements in the next quarter or so. As for desperation. They made $3.7B with a 20% margin and just paid off $920M in convertible bonds. They have $2.2B on hand and sold 63,000 model 3s this quarter. Where's the desperation? They promised a model Y (mostly a model 3 with a bit more ground clearance and a slightly taller chassis) in late 2020. I don't really see a problem. Given that they have set up 4 model 3 lines so far, at least one model Y line in 1.5 years seems pretty reasonable.
- navigatesol 8y ago
  >Elon's vision is to take over the world automobile market quickly. It's impressively how close he's come. What? They are a microscopic fraction of global market share. They are number 1 in a particular, shrinking market segment that all other manufacturers are moving away from, because they produced 2 years worth of demand at once. Their month-over-month share of cars in that price range is decreasing. >They made $3.7B with a 20% margin and just paid off $920M in convertible bonds. They have $2.2B on hand and sold 63,000 model 3s this quarter. Where's the desperation? They made $3.7BB in revenue, at 20% GROSS margins, but still LOST $600MM+, after promising profitability every quarter in the future. Revenues declined 30% quarter over quarter. Paying down the debt doesn't show up on the income statement. They have $2.2BB on hand, $700MM+ is restricted deposit money, after burning through $1.6BB last quarter. They also drew down their ABL. Their capital expenditure is barely covering depreciation, yet they have to build out multiple lines and factories. Their AP barely decreased ($100MM), while revenues sunk drastically. They have $9BB+ in debt, and less cash on-hand than their AP. They are slashing prices on cars they claim have "insane demand". There are people all over Twitter and Reddit waiting months for service or parts. Insurance costs are sky-rocketing. There's inventory stuffed in abandoned car lots all over the country. Elon is fighting with the SEC and rumour has it the DOJ and FTC as well. You don't see a problem because you don't appear to know where to look. No individual metric is an issue, but in aggregate it doesn't look good.
jsight 8y ago
> Now we hear Tesla don't even know if they're going to build it in China or California. I believe you are confused here. The car will be built in China for some markets. The part that hasn't been decided is where US production will occur. The most logical place has been guessed to be GF1 in Sparks, NV, but they have considered California as well (possibly Fremont expansion).
- navigatesol 8y ago
  >The part that hasn't been decided is where US production will occur. Point still stands: they ordered machinery when they don't even know what factory it will go in. Anyone with a modicum of sense or experience in manufacturing understands this is nonsensical.
  - webXL 8y ago
    I happen to have a modicum of sense, and realize Tesla has some serious management problems, but why is ordering machinery before having a location finalized nonsensical? It's not like this stuff is in transit or they need to buy any land.
    - jsight 8y ago
      Exactly... it would be crazy if they were ordering them without knowing if it was in the US or China, perhaps. But choosing between two existing US plants that are a <250 miles apart? That might be strange, but it isn't nonsensical.

sliken 8y ago

Elon's vision is to take over the world automobile market quickly. It's impressively how close he's come. From zero to #1 since 2012 in premium cars is an almost unbelievable achievement. Originally the plan was announced that the model Y would be produced in new assembly lines in Reno, then later the lower end model Ys would be produced in China. However since then the model 3, S, and X demand had dropped significantly, at least in the USA. They are developing markets in the EU, but delivery logistics, safety certifications, dealer networks, and related have delayed things. Reduced tax incentives in the USA have also hurt demand locally. My speculation is that Elon wanted all 4 model 3 assembly model 3 lines in Fremont to stay producing the model 3. But now after Q1 they are considering converting a model 3 line in Fremont to the model Y. This will save significant money since with 75% of the same parts, but of course will reduce model 3 production capacity. How much this makes sense depends on if Panasonic keep up with the battery demand and how much can the new EU model 3 demand make up for the decreasing USA model 3 demand. I suspect there will be related announcements in the next quarter or so. As for desperation. They made $3.7B with a 20% margin and just paid off $920M in convertible bonds. They have $2.2B on hand and sold 63,000 model 3s this quarter. Where's the desperation? They promised a model Y (mostly a model 3 with a bit more ground clearance and a slightly taller chassis) in late 2020. I don't really see a problem. Given that they have set up 4 model 3 lines so far, at least one model Y line in 1.5 years seems pretty reasonable.

navigatesol 8y ago
>Elon's vision is to take over the world automobile market quickly. It's impressively how close he's come. What? They are a microscopic fraction of global market share. They are number 1 in a particular, shrinking market segment that all other manufacturers are moving away from, because they produced 2 years worth of demand at once. Their month-over-month share of cars in that price range is decreasing. >They made $3.7B with a 20% margin and just paid off $920M in convertible bonds. They have $2.2B on hand and sold 63,000 model 3s this quarter. Where's the desperation? They made $3.7BB in revenue, at 20% GROSS margins, but still LOST $600MM+, after promising profitability every quarter in the future. Revenues declined 30% quarter over quarter. Paying down the debt doesn't show up on the income statement. They have $2.2BB on hand, $700MM+ is restricted deposit money, after burning through $1.6BB last quarter. They also drew down their ABL. Their capital expenditure is barely covering depreciation, yet they have to build out multiple lines and factories. Their AP barely decreased ($100MM), while revenues sunk drastically. They have $9BB+ in debt, and less cash on-hand than their AP. They are slashing prices on cars they claim have "insane demand". There are people all over Twitter and Reddit waiting months for service or parts. Insurance costs are sky-rocketing. There's inventory stuffed in abandoned car lots all over the country. Elon is fighting with the SEC and rumour has it the DOJ and FTC as well. You don't see a problem because you don't appear to know where to look. No individual metric is an issue, but in aggregate it doesn't look good.

jsight 8y ago

> Now we hear Tesla don't even know if they're going to build it in China or California. I believe you are confused here. The car will be built in China for some markets. The part that hasn't been decided is where US production will occur. The most logical place has been guessed to be GF1 in Sparks, NV, but they have considered California as well (possibly Fremont expansion).

navigatesol 8y ago
>The part that hasn't been decided is where US production will occur. Point still stands: they ordered machinery when they don't even know what factory it will go in. Anyone with a modicum of sense or experience in manufacturing understands this is nonsensical.
- webXL 8y ago
  I happen to have a modicum of sense, and realize Tesla has some serious management problems, but why is ordering machinery before having a location finalized nonsensical? It's not like this stuff is in transit or they need to buy any land.
  - jsight 8y ago
    Exactly... it would be crazy if they were ordering them without knowing if it was in the US or China, perhaps. But choosing between two existing US plants that are a <250 miles apart? That might be strange, but it isn't nonsensical.