15 ms·

Tesla is outrunning the supply chain crunch

74 points by cwwc 5y ago

imglorp 5y ago
The other thread about earnings was talking about moats and this is a big one. The dinosaur car makers have many layers of entrenched suppliers all optimizing for just-in-time. If you do enough in-house you can redesign around shortages instead of depending on some contract 3 parties removed from you.
bryan0 5y ago
why not just link to the actual article[0]? axios is not really adding anything here. 0: https://www.wsj.com/articles/tesla-poised-for-record-quarterly-earnings-on-supply-chain-resilience-11634722200 https://www.wsj.com/articles/tesla-poised-for-record-quarter...
- hinkley 5y ago
  > www.wsj.com Axios in this case is taking something away.
- strict9 5y ago
  Because it's a hard paywall. It's adding visibility to those without a subscription.
  - greenyoda 5y ago
    There's actually a workaround for WSJ's paywall: submit the original URL to archive.md and you get the full text of the article. Here's the link for this one: https://archive.md/fSpLd https://archive.md/fSpLd
  - malshe 5y ago
    I subscribe to WSJ so I can share it freely: https://www.wsj.com/articles/tesla-poised-for-record-quarterly-earnings-on-supply-chain-resilience-11634722200?st=97k1bj680cs8biz&reflink=desktopwebshare_permalink https://www.wsj.com/articles/tesla-poised-for-record-quarter...
- blueyes 5y ago
  And neither the WSJ nor Axios say how Tesla is doing what they do, which is the crucial thing to know.
kfarr 5y ago
Ah yes the "flexibility" and "ingenuity" to declare you don't need RADAR (my mistake, not LIDAR as I originally wrote) anyway, supply chain problem fixed!
- pkulak 5y ago
  But they've never used lidar...
  - hnxs 5y ago
    It’s a common misconception. They did stop using radar, though. 100% sure that’s what the person you’re responding to meant :)
    - kfarr 5y ago
      Yes my mistake thanks for clarifying!
- credit_guy 5y ago
  Elon Musk was always against Lidar, well before any supply crunch, or Covid for that matter. See for example [1], published in 2019, and called "Elon Musk's war on Lidar" [1] https://www.forbes.com/sites/bradtempleton/2019/05/06/elon-musks-war-on-lidar-who-is-right-and-why-do-they-think-that/?sh=6a0e80832a3b https://www.forbes.com/sites/bradtempleton/2019/05/06/elon-m...
  - ahahahahah 5y ago
    At that point he had spent three years selling cars that he claimed had all of the necessary hardware for FSD. He was also already years later on his promise of coast to coast automation.
- llboston 5y ago
  Do you know any mass produced car that has built in LIDAR?
djKianoosh 5y ago
There's nothing in the article to support that title. "outrunning" it's not. article literally states it had been impacted by the supply chain situation
- sliken 5y ago
  Well they have been doing substantially better than the competition on avoiding production stoppages because of a shortage of chips.
kravens_last 5y ago
Elon may be a negative press magnet, and Tesla may not be a perfect vehicle, but for a company to go from concept car being made fun of on Top Gear to the car I see most on the street here in my city (more than corollas and camrys even), is unheard of. I just hope that critical mass is reached AFTER the supercharger infrastructure is set in place.
- skeeter2020 5y ago
  >> to the car I see most on the street here in my city (more than Corollas and Camrys even) US Sales 2020 Tesla: 235,000 units Toyota: 1,837,898 total units, Camry: 294,348 units, Corolla: 237,179 units ...and that's just last year, they've sold at least 500K units combined annually over the past decade. So either you live on a anomaly street or your observations don't count much against easily verifiable numbers.
  - asadlionpk 5y ago
    Must be bay area or LA. I see a few Model 3 and Ys on every street.
    - filoleg 5y ago
      Or Seattle area. On east coast, even in big places like NYC or Chicago, seeing a Tesla still feels like an uncommon occurrence. In Seattle or Bay Area, you cannot drive through an intersection without seeing at least one (or, more often, more than one) Tesla.
      - throwawayboise 5y ago
        Yep. I see them rarely enough that they are noticable when I do see them. I see one or two a week, probably.
      - scythe 5y ago
        They seem to be common in RI and more generally in Atlantic New England. Not sure if it has something to do with state incentives or just a culture thing.
xadhominemx 5y ago
I’m sure Tesla has done a good job but it doesn’t make much sense to compare them to the behemoths because it’s much easier to navigate the shortages as a low volume (but still high priority) manufacturer. If everyone gets shorted 5% of their order for some part, Tesla might have to go source a few tens* of thousands of parts in the gray market to close the shortfall. GM would have to find hundreds of thousands… that amount of product might simply be unavailable.
- krasin 5y ago
  GM revenue in Q2 2021 was $34.2 billion ([1]). Tesla Q3 2021 revenue is $13.7 billion ([2]). Tesla is still smaller, but it's in the same order of magnitude with GM. 1. https://media.gm.com/media/us/en/gm/news.detail.html/content/Pages/news/emergency_news/2021/earnings/0804-earnings.html https://media.gm.com/media/us/en/gm/news.detail.html/content... 2. https://www.teslarati.com/tesla-tsla-q3-2021-earnings-results/ https://www.teslarati.com/tesla-tsla-q3-2021-earnings-result...
  - bjd2385 5y ago
    Thanks for providing this context, good to know.
  - xadhominemx 5y ago
    With no shortages, GM would be be shipping >2m vehicles / quarter, so it’s about 10x larger. But fair point - Tesla has grown a lot
    - krasin 5y ago
      Before shortages, GM revenue in Q3 2019 was $35.5 billion. A bit more than $34.2 billion in Q2 2021, but very close. Edit. You're right. By the number of cars, there's still an order of magnitude gap (see my other comment). Thank you. 1. https://investor.gm.com/news-releases/news-release-details/gm-reports-income-23b-and-ebit-adj-30b https://investor.gm.com/news-releases/news-release-details/g...
  - fhd2 5y ago
Ologn 5y ago
I am just window shopping to some extent, but I just looked to see how long it would take to get the no-frills (standard wheels), cheapest Tesla 3 delivered - August ( https://www.tesla.com/model3/design https://www.tesla.com/model3/design ).
- zwily 5y ago
  That’s crazy - just switching the wheels it goes from May -> August.
  - asdff 5y ago
    Similar story with golf clubs these days. Swapping out shafts on a new set when you order usually adds no time at all. You do anything but the default shaft you might be waiting until next year. Companies are probably in a rush to get inventory of their most common SKUs and the edge cases are put on the back burner.
ok123456 5y ago
When you don't use automotive or industrial grade parts, it's easy to avoid the automotive supply chain.
- saiya-jin 5y ago
  They still use some sort of chips (on which you can play Cyberpunk 2077 in some cases), which is the main issue why many manufacturers ie Skoda are stopping/slowing down production
- Someone1234 5y ago
  I'm out of the loop, so I read Tesla had some problem with their robots initially, is that still an ongoing problem? Last I heard they were working on some giant metal press to print large car body components.
  - ok123456 5y ago
    Their touchscreens and MMCs are infamously not automotive grade.
    - panick21 5y ago
      This is really only the case on some older Model S from around before 2018 or so. That is a vanishingly small % of their cars produced.
  - panick21 5y ago
    In general yes, they solved their manufacturing issues on the Model 3 line and it reached the required speeds and saved the company. See the cashflow turnaround in 2018-2019. They managed to scale that line far beyond their initial targets. However that experience did teach them that their design was flawed and for future vehicles after Model 3 they did switch to large castings anyway rather then traditional welding of stamping. If you are interested in the flaws of the initial Model 3, see this interview with Elon and Sandy Munro where the discuss this: https://youtu.be/YAtLTLiqNwg?t=1026 https://youtu.be/YAtLTLiqNwg?t=1026 First they had two casting in the back for the wheel area, then moved to one. Now they are moving to replace the whole front. So the new car designs will be two big castings connected by a structural battery pack (yes its removable). Here you see the changes: https://electrek.co/wp-content/uploads/sites/3/2020/04/Tesla-Model-Y-vs-Model-3-underbody.jpg?quality=82&strip=all https://electrek.co/wp-content/uploads/sites/3/2020/04/Tesla... The new design: https://468y981o84o43v2wo2600a0gcj-wpengine.netdna-ssl.com/wp-content/uploads/2021/05/tesla-model-y-underbody-cast.jpg https://468y981o84o43v2wo2600a0gcj-wpengine.netdna-ssl.com/w... Example casting: https://cdn.shopify.com/s/files/1/0173/8204/7844/files/Screen_Shot_2020-06-04_at_9.59.14_PM.png?v=1591289066 https://cdn.shopify.com/s/files/1/0173/8204/7844/files/Scree... Here the first press in operation: https://youtu.be/BwoiFC-HwPE?t=302 https://youtu.be/BwoiFC-HwPE?t=302 Since then they have order many of these, 8 for Berlin for example. This should support around 500k cars production. These custom made for Tesla by IDRA in Italy, they put out a lot information: https://www.youtube.com/watch?v=onCrHQEvgYs https://www.youtube.com/watch?v=onCrHQEvgYs Even more information: https://www.youtube.com/playlist?list=PLyvdbTy3v1d4fxNvP0HTBudD1t0_24puR https://www.youtube.com/playlist?list=PLyvdbTy3v1d4fxNvP0HTB... They are moving to even larger presses for the Cybertruck.
markvdb 5y ago
I guess a lot of this also is Tesla projecting growth through the pandemic, thus not cutting their supplier numbers...
beervirus 5y ago
Article is devoid of information. What are they actually doing to outrun the supply chain crunch?
browningstreet 5y ago
Not sure I believe it. The Tesla reservation I put in that was initially scheduled for delivery in Jan 2022 is now listed as July 2022, with no notice whatsoever.
- NiekvdMaas 5y ago
  That's because the demand is through the roof. They can't possibly produce enough cars to sell right now.
  - browningstreet 5y ago
    That would affect orders placed after mine. They knew how many orders they had in the queue when I placed my order and they gave me an estimate.
    - s1artibartfast 5y ago
      And maybe they ignored the que when they gave you the estimate.
- simondotau 5y ago
  Every vehicle needs ten thousand parts from hundreds of suppliers in order to be fully assembled and shipped. Tesla could outrun the supply chain crunch on 9,999 parts and still it only takes one missing part to halt production.
  - totalZero 5y ago
    Hence the problem for every manufacturer of consumer technology. The guy who almost outruns a hungry lion still gets eaten. Not sure how we can call that "outrunning the supply chain crunch."
    - simondotau 5y ago
      It appears they have successfully "outrun the supply chain crunch" on the high volume Models 3/Y but not so much on the much lower volume Models S/X. My guess is the OP's order is for the latter.
paxys 5y ago
So is Apple and every other company with premium, high-margin products. How many automakers have a shortage in their highest-end vehicle trims? Turns out when you aren't relying on volume sales to make a profit you are in a much better position to make up for supply shortfalls.

74 points by cwwc 5y ago

The other thread about earnings was talking about moats and this is a big one. The dinosaur car makers have many layers of entrenched suppliers all optimizing for just-in-time. If you do enough in-house you can redesign around shortages instead of depending on some contract 3 parties removed from you.

bryan0 5y ago

why not just link to the actual article[0]? axios is not really adding anything here. 0: https://www.wsj.com/articles/tesla-poised-for-record-quarterly-earnings-on-supply-chain-resilience-11634722200 https://www.wsj.com/articles/tesla-poised-for-record-quarter...

hinkley 5y ago
> www.wsj.com Axios in this case is taking something away.
strict9 5y ago
Because it's a hard paywall. It's adding visibility to those without a subscription.
- greenyoda 5y ago
  There's actually a workaround for WSJ's paywall: submit the original URL to archive.md and you get the full text of the article. Here's the link for this one: https://archive.md/fSpLd https://archive.md/fSpLd
- malshe 5y ago
  I subscribe to WSJ so I can share it freely: https://www.wsj.com/articles/tesla-poised-for-record-quarterly-earnings-on-supply-chain-resilience-11634722200?st=97k1bj680cs8biz&reflink=desktopwebshare_permalink https://www.wsj.com/articles/tesla-poised-for-record-quarter...
blueyes 5y ago
And neither the WSJ nor Axios say how Tesla is doing what they do, which is the crucial thing to know.

kfarr 5y ago

Ah yes the "flexibility" and "ingenuity" to declare you don't need RADAR (my mistake, not LIDAR as I originally wrote) anyway, supply chain problem fixed!

pkulak 5y ago
But they've never used lidar...
- hnxs 5y ago
  It’s a common misconception. They did stop using radar, though. 100% sure that’s what the person you’re responding to meant :)
  - kfarr 5y ago
    Yes my mistake thanks for clarifying!
credit_guy 5y ago
Elon Musk was always against Lidar, well before any supply crunch, or Covid for that matter. See for example [1], published in 2019, and called "Elon Musk's war on Lidar" [1] https://www.forbes.com/sites/bradtempleton/2019/05/06/elon-musks-war-on-lidar-who-is-right-and-why-do-they-think-that/?sh=6a0e80832a3b https://www.forbes.com/sites/bradtempleton/2019/05/06/elon-m...
- ahahahahah 5y ago
  At that point he had spent three years selling cars that he claimed had all of the necessary hardware for FSD. He was also already years later on his promise of coast to coast automation.
llboston 5y ago
Do you know any mass produced car that has built in LIDAR?

djKianoosh 5y ago

There's nothing in the article to support that title. "outrunning" it's not. article literally states it had been impacted by the supply chain situation

sliken 5y ago
Well they have been doing substantially better than the competition on avoiding production stoppages because of a shortage of chips.

kravens_last 5y ago

Elon may be a negative press magnet, and Tesla may not be a perfect vehicle, but for a company to go from concept car being made fun of on Top Gear to the car I see most on the street here in my city (more than corollas and camrys even), is unheard of. I just hope that critical mass is reached AFTER the supercharger infrastructure is set in place.

skeeter2020 5y ago
>> to the car I see most on the street here in my city (more than Corollas and Camrys even) US Sales 2020 Tesla: 235,000 units Toyota: 1,837,898 total units, Camry: 294,348 units, Corolla: 237,179 units ...and that's just last year, they've sold at least 500K units combined annually over the past decade. So either you live on a anomaly street or your observations don't count much against easily verifiable numbers.
- asadlionpk 5y ago
  Must be bay area or LA. I see a few Model 3 and Ys on every street.
  - filoleg 5y ago
    Or Seattle area. On east coast, even in big places like NYC or Chicago, seeing a Tesla still feels like an uncommon occurrence. In Seattle or Bay Area, you cannot drive through an intersection without seeing at least one (or, more often, more than one) Tesla.
    - throwawayboise 5y ago
      Yep. I see them rarely enough that they are noticable when I do see them. I see one or two a week, probably.
    - scythe 5y ago
      They seem to be common in RI and more generally in Atlantic New England. Not sure if it has something to do with state incentives or just a culture thing.

xadhominemx 5y ago

I’m sure Tesla has done a good job but it doesn’t make much sense to compare them to the behemoths because it’s much easier to navigate the shortages as a low volume (but still high priority) manufacturer. If everyone gets shorted 5% of their order for some part, Tesla might have to go source a few tens* of thousands of parts in the gray market to close the shortfall. GM would have to find hundreds of thousands… that amount of product might simply be unavailable.

krasin 5y ago
GM revenue in Q2 2021 was $34.2 billion ([1]). Tesla Q3 2021 revenue is $13.7 billion ([2]). Tesla is still smaller, but it's in the same order of magnitude with GM. 1. https://media.gm.com/media/us/en/gm/news.detail.html/content/Pages/news/emergency_news/2021/earnings/0804-earnings.html https://media.gm.com/media/us/en/gm/news.detail.html/content... 2. https://www.teslarati.com/tesla-tsla-q3-2021-earnings-results/ https://www.teslarati.com/tesla-tsla-q3-2021-earnings-result...
- bjd2385 5y ago
  Thanks for providing this context, good to know.
- xadhominemx 5y ago
  With no shortages, GM would be be shipping >2m vehicles / quarter, so it’s about 10x larger. But fair point - Tesla has grown a lot
  - krasin 5y ago
    Before shortages, GM revenue in Q3 2019 was $35.5 billion. A bit more than $34.2 billion in Q2 2021, but very close. Edit. You're right. By the number of cars, there's still an order of magnitude gap (see my other comment). Thank you. 1. https://investor.gm.com/news-releases/news-release-details/gm-reports-income-23b-and-ebit-adj-30b https://investor.gm.com/news-releases/news-release-details/g...
- fhd2 5y ago

Ologn 5y ago

I am just window shopping to some extent, but I just looked to see how long it would take to get the no-frills (standard wheels), cheapest Tesla 3 delivered - August ( https://www.tesla.com/model3/design https://www.tesla.com/model3/design ).

zwily 5y ago
That’s crazy - just switching the wheels it goes from May -> August.
- asdff 5y ago
  Similar story with golf clubs these days. Swapping out shafts on a new set when you order usually adds no time at all. You do anything but the default shaft you might be waiting until next year. Companies are probably in a rush to get inventory of their most common SKUs and the edge cases are put on the back burner.

ok123456 5y ago

When you don't use automotive or industrial grade parts, it's easy to avoid the automotive supply chain.

saiya-jin 5y ago
They still use some sort of chips (on which you can play Cyberpunk 2077 in some cases), which is the main issue why many manufacturers ie Skoda are stopping/slowing down production
Someone1234 5y ago
I'm out of the loop, so I read Tesla had some problem with their robots initially, is that still an ongoing problem? Last I heard they were working on some giant metal press to print large car body components.
- ok123456 5y ago
  Their touchscreens and MMCs are infamously not automotive grade.
  - panick21 5y ago
    This is really only the case on some older Model S from around before 2018 or so. That is a vanishingly small % of their cars produced.
- panick21 5y ago
  In general yes, they solved their manufacturing issues on the Model 3 line and it reached the required speeds and saved the company. See the cashflow turnaround in 2018-2019. They managed to scale that line far beyond their initial targets. However that experience did teach them that their design was flawed and for future vehicles after Model 3 they did switch to large castings anyway rather then traditional welding of stamping. If you are interested in the flaws of the initial Model 3, see this interview with Elon and Sandy Munro where the discuss this: https://youtu.be/YAtLTLiqNwg?t=1026 https://youtu.be/YAtLTLiqNwg?t=1026 First they had two casting in the back for the wheel area, then moved to one. Now they are moving to replace the whole front. So the new car designs will be two big castings connected by a structural battery pack (yes its removable). Here you see the changes: https://electrek.co/wp-content/uploads/sites/3/2020/04/Tesla-Model-Y-vs-Model-3-underbody.jpg?quality=82&strip=all https://electrek.co/wp-content/uploads/sites/3/2020/04/Tesla... The new design: https://468y981o84o43v2wo2600a0gcj-wpengine.netdna-ssl.com/wp-content/uploads/2021/05/tesla-model-y-underbody-cast.jpg https://468y981o84o43v2wo2600a0gcj-wpengine.netdna-ssl.com/w... Example casting: https://cdn.shopify.com/s/files/1/0173/8204/7844/files/Screen_Shot_2020-06-04_at_9.59.14_PM.png?v=1591289066 https://cdn.shopify.com/s/files/1/0173/8204/7844/files/Scree... Here the first press in operation: https://youtu.be/BwoiFC-HwPE?t=302 https://youtu.be/BwoiFC-HwPE?t=302 Since then they have order many of these, 8 for Berlin for example. This should support around 500k cars production. These custom made for Tesla by IDRA in Italy, they put out a lot information: https://www.youtube.com/watch?v=onCrHQEvgYs https://www.youtube.com/watch?v=onCrHQEvgYs Even more information: https://www.youtube.com/playlist?list=PLyvdbTy3v1d4fxNvP0HTBudD1t0_24puR https://www.youtube.com/playlist?list=PLyvdbTy3v1d4fxNvP0HTB... They are moving to even larger presses for the Cybertruck.

markvdb 5y ago

I guess a lot of this also is Tesla projecting growth through the pandemic, thus not cutting their supplier numbers...

beervirus 5y ago

Article is devoid of information. What are they actually doing to outrun the supply chain crunch?

browningstreet 5y ago

Not sure I believe it. The Tesla reservation I put in that was initially scheduled for delivery in Jan 2022 is now listed as July 2022, with no notice whatsoever.

NiekvdMaas 5y ago
That's because the demand is through the roof. They can't possibly produce enough cars to sell right now.
- browningstreet 5y ago
  That would affect orders placed after mine. They knew how many orders they had in the queue when I placed my order and they gave me an estimate.
  - s1artibartfast 5y ago
    And maybe they ignored the que when they gave you the estimate.
simondotau 5y ago
Every vehicle needs ten thousand parts from hundreds of suppliers in order to be fully assembled and shipped. Tesla could outrun the supply chain crunch on 9,999 parts and still it only takes one missing part to halt production.
- totalZero 5y ago
  Hence the problem for every manufacturer of consumer technology. The guy who almost outruns a hungry lion still gets eaten. Not sure how we can call that "outrunning the supply chain crunch."
  - simondotau 5y ago
    It appears they have successfully "outrun the supply chain crunch" on the high volume Models 3/Y but not so much on the much lower volume Models S/X. My guess is the OP's order is for the latter.

paxys 5y ago

So is Apple and every other company with premium, high-margin products. How many automakers have a shortage in their highest-end vehicle trims? Turns out when you aren't relying on volume sales to make a profit you are in a much better position to make up for supply shortfalls.