But I am no longer that person. I read his biography (Elon Musk: Tesla, SpaceX, and the Quest for a Fantastic Future) and this is a guy who genuinely wants to change things on a macro scale: opening up space, changing transportation. He is also a genuine risk taker, who will bet his own money and risk everything for something he believes in. I now root for Musk and his companies to succeed. I wouldn't take short positions on Tesla now.
Plus the deletion of the SpaceX and Tesla facebook pages, when told over Twitter they existed was pretty funny.
Then, when they wanted to build the Model S, they wasted a lot of time on luxury features like having flush door handles. Their output was delayed, despite having numerous pre-orders waiting.
Again, with Model X, they faced substantial delays with the falcon wing doors and the single-pylon-seat in the 2nd row. They received a lot of flak for that, and got past it in time.
Now with Model 3, they've had problems mainly at the Gigafactory with battery-pack assembly, as well as with the costly up-front labor that goes into automation of assembly lines.
And yet, here they are. They have substantial debt yes, and their credit rating is B- which isn't great, but compared to other automakers their financials are somewhat middle of the road. Look at Ford, they have a massive debt problem, or look at Chevy's electrification program, which has faced much weaker demand than Tesla will ever face with its legions of fans.
If you ask me, the "fundamentals" have never been great, but the simple fact is Tesla has hundreds of thousands of die-hard fans who have put up their own money in pre-orders and equity to keep the company going. No other car brand has this amount of loyalty and fandom, and that "fundamental" has been enough to get Tesla where they are now.
Tough times? Yes. But hoards of Muskivites will throw in cash to ensure this ship keeps sailing.
That is why the problem of having 200 roadsters in a warehouse pales in comparison with the problem of having an assembly line that is supposed to crank out 5000 vehicles crank out 2500 (if that) instead. It means that you are losing money hand over fist, your capital expenditures and wages are identical but your income (if properly recognized) is half. This will totally wipe out your margins for quite a while to come. Car manufacturers have consolidated for a reason, even a small hickup can kill an otherwise healthy company.
https://en.wikipedia.org/wiki/Space_(Baxter_novel)
You get to chose: you're part of the bulldozer or you'll end up part of the highway. Even so, it will not be easy to do right by Tesla and not to ignore SpaceX, and that's before going into the fact that Tesla is now effectively subsidizing Solar City.
Any one of those would be a major challenge and a major achievement to lick. While I totally admire Elon Musk for challenging all these things at once you have to wonder about the wisdom of it all, especially when taking into account that he has another major project (SpaceX) that would normally be enough to tax any CEO.
Furthermore they decided to roll Solar City into Tesla which makes Tesla even more encumbered with debt. I get why he did it but I firmly believe that cross-tying losing businesses and winning businesses at that level is a failure prone strategy, it is gambling rather than managing.
See https://news.ycombinator.com/item?id=16612805 for example.
Tesla has done the hard things, they've made a great product, they've created a ton of demand and they found an entry point into a really tough market to enter. If the biggest worry right now is their need for cash to scale, I'm very bullish on their future.
This observation is not going to affect my investment decisions though. I will not go as far as shorting TSLA ('the market can stay irrational longer than any investor can stay solvent'), but I would not buy TSLA either.
Wait, did Elon not know about them and then just got them deleted upon finding out?
edit: I should say "apparently!" since I wasn't there myself
It’s marketing and (among other things) Elon Musk is an excellent marketer.
You can believe this if you want. But to me the author saying this isn't worth the paper it's printed on.
That said, TSLA, just like SpaceX plays really close to the edge with equity and risk in pursuit of a vision. What most Tesla shorts fail to recognize is that Tesla has already gotten to the point that if something really really bad where to happen, any number of well capitalized tech firms would scoop them up in a instant (looking at Apple in particular). The cars are really a minimal amount of hardware, with software wrapped around them. They have loyalty like the iPhone had loyalty and Alexa has loyalty.
The big bottleneck to this point has been battery assembly lines at the Gigafactory. They just installed a new line for the battery packing line that they yanked back from Panasonic. Now they need to prove they can start scaling more linearly.
The press reaction to all of this is a good example of the media not knowing what they are talking about. The press has issued breathless reports about there being too much skilled labor and parts by hand, then too much robotic automation. They point at the low uptake of reservation holders (30%) without noting that the reservations are holding constant, and that this is mostly a effect of only the most premium of the premium going on sale right now.
Tesla's barb on the Model T is interesting as well. "This is the fastest growth of any automotive company in the modern era. If this rate of growth continues, it will exceed even that of Ford and the Model T. "
What Tesla is trying to do is hard. There is a reason no one has been successful in doing it in more then 50+ years. Watching the people who are opposed to what Tesla is doing is just as interesting.
It is a car... An electric car at that, where battery tech and costs have pretty much been the cornerstone of Tesla's success. Claiming hardware doesn't matter to a car company is like claiming foundation doesn't matter for a house.
Plus there's nothing particularly minimalist about any of Tesla's cars. They take relatively simple mechanical parts and replace them with complex electrical parts. Look at the door handles in the Model 3 for a perfect example: https://www.youtube.com/watch?v=JIADZHLHGL0
If I recall, one study indicated that maintenance costs on an ev are a fraction of the current costs for that reason.
For example: On early Priuses, the regenerative braking would be used so much that the 'real' brakes would calcify/glaze over. When an hard stop was needed (emergency, got cut off, etc) then the 'real' brakes would not work as intended. Many of the early Priuses have front-end damage as a result. It took them about 4 years to fix it.
But Tesla insists on putting in all sorts of clever electric doodads like electronic door handles and side mirrors and power windows that have to pop down 1 cm to open. Watch the youtube clip above, it's hilarious.
Even if a GM or Ford gas car has more parts than a Tesla, GM and Ford have, what, almost 100 years of experience each engineering cars.
I like Tesla, but it doesn't give me a good vibe if they're blaming partners at this point.
Maybe -- or they could wait to buy their assets in bankruptcy.
If TSLA fell that far, the shorts would get paid.
From the statement: "In the past seven days, Tesla produced 2,020 Model 3 vehicles."
A pretty big improvement, still some hard work to do, but they really are ramping up.
I'm relieved at the announcement they won't need another debt/equity raise this year. Let's see where we are in 3 months.
[1] http://money.cnn.com/2018/04/02/news/companies/tesla-stock-a...
Getting full automation to work is really hard, takes a lot of labor and time. I think they'll do it, but the task should not be under-estimated. In the meantime, they've already achieved a production rate per factory line similar to what a typical automaker like VW would do (on the order of 100,000 per year for a factory).
Like SpaceX around 2015 or so. Respectable, but not yet Earth-shattering (i.e. 2017).
Musk probably knows a thing or two about technical limits since that, although people say that SpaceX needs are more high grade craft than large scale throughput but he might believe that this is peanuts.
I wonder how many lines run in parallel. thousands of cars per week is a few minute per car. That's not much :)
Someone please slip a drone inside.
Have you ever looked at production line videos from Mercedes Benz on youtube? You'll see that what Tesla wants to do is actually already being done, only with dead-tree engines instead.
But I hope they succeed in general and I guess we'll know one way or the other by next quarter.
I assume this is their way of saying, we have a sustainable rate here.
That said, the VIN numbers are rolling off at a massive rate. It's pretty easy to see if Tesla does that again.
Way to spin all the production issues and delay of the previous quarter into a positive.
They're way behind the goals they set for themselves, but instead of measuring by those goals, they measure themselves by their weakest performance, and suddenly their performance becomes historic.
Remember, no car in history ever had 500,000 pre-orders. No car even came close. If anyone expected Tesla to ramp up to that kind of production overnight, they are delusional.
Besides, when I ordered my model 3, I assumed that it would be very late... So late, that I assumed I'd just wait for the AWD one to replace our AWD car.
Ford builds more pickups than that a year, with basically 0 pre-orders. They simply don't bother with pre-orders, they don't need the money, they don't need the promotion, etc.
Is the lack of pre-orders for the F-150 a sign of weakness? NO!, even though the thing is super popular they are able to produce enough to meet ongoing demand.
That's true, Citroen had a pretty good run with their record of 80,000 pre-orders (it stood for 60 years). But that was before the internet, all of the orders were made in person, they were non-refundable orders and there never was any doubt that Citroen would deliver the cars.
Although you could be pedantic about what consitutes a pre-order, this isn't strictly true. Demand for the Mustang is truly unprecedented, even by the Model 3. Have a look at the Mustang production from that timeframe: https://upload.wikimedia.org/wikipedia/commons/thumb/d/d7/19...
At the same time this is an admission that Musk is/was selling a delusion to people when Tesla set it's production goals.
You would have to be malicious or ignorant to think that can’t be scaled up to NUMMIs previous 350k/year run rate in the next 3-12 months.
Disclosure: TSLA shareholder
I don't really like Musk but sending positive messages in Investment relations is the key to keeping the company afloat. At one of my previous employers we lost top 4 customers and 10% of our revenue. But, the investment relationship site said - "We are up 1% in revenue, if we discount top 4 customers".
If Tesla admits and says - "We have improved but we are still behind on our original promise" then the stock price is going to drop like a rock.
"You can fool some people all of the time, and you can fool all people some of the time, but you can't fool all people all of the time."
People are going to arrive at the conclusion irrespective. Take the GP for example, he/she correctly pointed out that Tesla is behind schedule. There is nothing wrong with that conclusion.
Shouldn't investors know the truth about their investment? Give people a chance to keep their money if the are making a poor investment? (Im not saying Tesla is, but smoke and mirrors is a poor way to present your company to the public)
So perhaps the lesson is savvy investors should ignore the pr and focus on the hard numbers?
Don't they? Tesla gave the raw numbers. Investors (should) use those to make up their mind.
What investors flee from is demoralized companies where the leaders are burned out or have stopped trying to make gains.
Let's see how the SEC will like this line of argumentation.
Yeah, is called PR. Shitty, but everyone does it.
TO: 10 vehicles
T1: 40 vehicles
Is production growing 4x per T, or 30 vehicles per T?
To use your example:
T-1: 2 vehicles
T0: 10 vehicles
T1: 40 vehicles
That is exponential. If it was only a linear ramp-up, that'd imply negative 20 Model 3s were produced in Quarter 3 of 2017.
You might think this is being pedantic, or that "exponential" is just a buzzword, but it's not: the point about exponential ramp-up is that if you're off by a factor of, say, 4x in production, that may mean you're only behind a few months. A relatively small time change corresponds to a very large difference in production.
Exponentials don't last forever; eventually a plateau is reached. But as you're bringing automation/production up, you're still in the exponential phase (as the data shows), and so small delays can make a big difference in production without telling you much about how many you'll produce once production is fully up and running.
Apparently, Musk is a good salesman, especially of himself.
- Produced 2020 cars and expect to produce the 2000 next week. - Tesla does not require an equity or debt raise this year
I think these two facts laid to rest a number of concerns from last couple week: production rate, running out of money, moody's rating cut. The one major thing that's still pending is the last week's fatal crash.
As far as I can tell, this is a great progress from where we were last week.
Today, they maintain a production target for 2020 of… 1M cars. Despite the delays.
They can achieve 50% of that goal and still be one of the best performing company in recent history. But you would probably insist that it's the biggest miss ever (only half the production target!).
Today, they are on track to make 120,000.
When this particular company says that their 2020 target is 1M cars, it's a totally meaningless statement.
They will go bankrupt. 100%. Maybe they can arrange some buy out or merger to try and save face, but doubtful.
Given their level of candor I am sure their accounting is an Enron style sh-t-show of epic proportions.
That is almost certainly why they had to buy SolarCity. Other than paying off Musk and SpaceX loans they also couldn't afford to have the books opened in bankruptcy court because it would destroy Musk's reputation.
It is coming though.
7.5% bond yield says no.
> I have been hearing this bankruptcy coming for the last 7 years
Yes, the anticipation makes it even sweeter. :)
But seriously, they have been loosing money non-stop and at progressively higher rates for those entire 7 years, so what do you think is going to happen?
The other major automakers are running years behind where Tesla is at today. That's where the embarrassment should be today: those automakers are still gleefully selling tens of millions of fossil-fuel-only vehicles.
Producing 20,000 Model 3 vehicles per quarter this year will be an accomplishment (even in spite of Musk's absurd prior goal). It implies they can push well over 100,000 units in 2019. These days they're being given little credit for what they are accomplishing. When they hit that 20,000 quarterly marker, the Model 3 becomes one of the best selling mid-priced luxury vehicles on the planet in its first year.
https://www.fool.com/investing/2017/12/30/the-5-best-selling...
https://www.theverge.com/2018/1/31/16956902/california-dmv-s...
Tesla deserves credit for getting other automakers to take the EV market seriously, but they are by no means years behind Tesla in terms of production and sales.
For self-driving, though, Waymo seems to have the edge right now for near-full-autonomy. Tesla's system is really much more like a really-fancy adaptive cruise control right now. But if Tesla gave them LIDARs (currently expensive, but may become cheap enough for Tesla to just add-on) and made them drive like grandmas (like Waymo) around well-mapped, dry locations, then they likely would be in the same ballpark. Which isn't to demean Waymo's impressive efforts at all.
How many EVs is Volkswagen selling per year?
How many EVs is Subaru selling per year?
How many EVs is Fiat selling per year?
How many EVs is Ferrari selling per year?
How many EVs is Daimler selling per year?
How many EVs is Ford selling per year?
How many EVs is PSA selling per year?
How many EVs is Hyundai Kia selling per year?
How many EVs is Mazda selling per year?
How many EVs is Suzuki selling per year?
Tesla is in fact still embarrassing the auto industry and selling EVs by an order of magnitude beyond what nearly all of the major auto companies are. The above listed companies are selling millions of fossil-fuel vehicles and should be heckled aggressively for it.
The fact that so few major automakers are selling EVs at all, demonstrates that what I've said is correct.
But hey, all these fossil-fuel makers have great plans for the future. One day soon.
The question is: how come those companies aren't being bankrupted for the horrific products they're producing by the millions? Where's the FUD attack on those corporations (which would actually be useful in dramatically improving the world)? Priorities are entirely screwed up when its the EV maker getting smacked around for not selling enough EVs.
This is a classic straw man. You've created a fictional persona which you then describe as:
> The FUD being broadly directed at Tesla is astounding and reeks of bias of one sort or another.
How about we stick to what other posters you're replying to are actually saying rather than creating fictional personas in order to then attack them.
I intentionally structured the response as a point about the extremely wide-spread criticism being directed at Tesla.
This: "The FUD being broadly directed at Tesla"
I inserted "broadly" for exactly that reason. I also intentionally avoided using "you" or similar (re-read what i actually wrote, you should instantly notice my reply is clearly not targeting the parent just based on what words I use), so as to hopefully avoid leading anyone to think I was claiming the parent was the source of that FUD.
All that said, their fanciful production plans can't hold much weight with institutional investors after so many misses, so it should be priced into the market.
While no other company can come close to Tesla in selling half-baked (or altogether nonexistent) stuff to the gullible, packaging Panasonic batteries in an overpriced golf cart isn't something that any company that knows how to actually build cars would be particularly concerned about.
Something doesn't really add up there. Regardless of their spin their Q1 must have been hellish on the guys and gals on the floor and in production support.
I hope they can do a sustainable ramp soon so my friends can get their Model 3s.
I would REALLY love to see what their internal messaging on this is.
https://www.bloomberg.com/news/articles/2018-03-29/tesla-urg...
> Tesla will suspend Model S and Model X production Thursday and Friday because it’s ahead of target on building those this quarter, Peter Hochholdinger, vice president of production, wrote to employees in a March 21 email obtained by Bloomberg News. An unspecified “limited number” of workers who build those vehicles will have the option to work on the Model 3 line on those two days and Saturday, he said.
They moved workers from the Model S & X lines over to the Model 3. And an unspecified number of "volunteers" also got cracking to make the final spurt.
They look nice from a distance, but when you sit up close you can see where every panel and piece of trim just doesn't line up quite right. Sitting in my cheap little Mazda3, I've never noticed any problem with simple fit-and-finish details like that.
I truly hope the Model 3s catch up, but I really think those owners will be in for a world of headaches after delivery.
Simply put, carmakers sell each car for X and they assume that on average each car will require Y dollars in a free service, and automaker will end up with Z of profits. If Y is severely underestimated, it may hurt the bottom line.
Edit, added link: https://teslamotorsclub.com/tmc/threads/door-alignment-norma...
Also, according to the release, those are customer-delivered numbers. Overall, a good trajectory and a sign of long-term health.
The game around Tesla stock is pure and simple speculation - by all sides. There is no world that justifies the current value of Tesla's stock, and there is also clear evidence that there is significant illegal market manipulation by shorts.. This is becoming more of a problem. Remember the fairly benign AMD "security" issue where it was discovered that root users could update security code? The announcement of that exploit came with a "this should drive AMD stock to zero" comment.
Just a little bit over oversight please, SEC?
Investors have been funding Tesla so far based on all these predictions. I don't see any sign of long-term health here now that both targets have not been met.
https://techcrunch.com/2017/11/01/tesla-predicts-production-...
Today's announcement says 9,766 M3s were produced in Q1: 9766 + 2686, i.e. 12452.
They don't seem that far off?
It has been reported that Tesla makes a lot of thier own parts. So more of the total supply chain for manufacturing the car exists in that plant.
For example Tesla manufacturers thier own motor in the plant were the NUMMI plant would have had thier ICE motors pre-assembled.
I personally am bearish on this. If they worked so hard, but only made it to 2000 / week (their goal was 5000/week by December2017. They lowered it to 2500 this past week), then its all just marketing spin to make 2000/week look better, which is still missing their original targets.
Volunteer staff while cutting Model S / Model X production (and moving that staff over to the Model 3 lines) is not sustainable. They could do it for one week to pad out the numbers, but they need real growth to remain solvent over the next year.
Ignoring the 2000/week spurt last week, the other 7000 Model 3 cars were made over the course of 11 weeks. That's roughly 650ish Model3 cars made per week, on the average (when looking at it across the quarter). This is actually less than the 793/week Model 3 they did at the end of Q4.
Bloomberg estimates that Tesla's overall production has grown to 1000/week or maybe a little bit above that, which might be closer to the "sustainable" size (ie: not counting the volunteer staff + spurt last week).
I'd be surprised if Tesla makes 30,000 Model 3s next quarter (which is still grossly below their target of 5000/week by Dec2017).
Tesla NEEDS 5000/week. 2000/week is still very low and unsustainable for this company.
https://money.usnews.com/investing/news/articles/2018-04-03/...
> "Tesla continues to target a production rate of approximately 5,000 units per week in about three months, laying the groundwork for Q3 to have the long-sought ideal combination of high volume, good gross margin and strong positive operating cash flow," it said.
> "As a result, Tesla does not require an equity or debt raise this year, apart from standard credit lines."
Exactly. The 2000 number is complete B.S. They just held back nearly finished units and the "completed" them all in the last week so they could release a semi-decent number without technically lying, but they are nowhere close to target.
"Q1 deliveries totaled 29,980 vehicles, of which 11,730 were Model S, 10,070 were Model X, and 8,180 were Model 3"
"In Q4, Tesla delivered 29,870 vehicles, of which 15,200 were Model S, 13,120 were Model X, and 1,550 were Model 3." - http://ir.tesla.com/releasedetail.cfm?releaseid=1053245
Model S/X: -23% deliveries. That is a BIG problem. Falling demand for S/X and inability to sell at sticker price (where they still lose money) and replacing that with another model that they lose even more money on is not a great "growth" story.
So some might ask, why setting a goal that is unlikely to be reached and not simply set a realistic target?
Changing the automotive world isn't realistic. So if you would go with a realistic target you could have shutdown Tesla years ago. Nevertheless, there is an actual risk involved in setting the targets too high as burning people and investors can cause real problems.
Yet, I think it is best to judge Tesla by their actual performance and not so much by the fact that they missed their ambitious targets.
And, regarding their automation, a few honest questions:
1. How much automation are we talking about, compared to the status quo?
2. How much of the automation is reusable across other models? Are they building up a repeatable model to increase scale at a lower cost?
They haven't ramped up automation yet, so right now they're burning the midnight oil on both regular production (i.e. likely with a similar labor/automation mix as typical manufacturers) AND tuning automation. Trying to do both simultaneously on a compressed timescale is what makes this hard.
I am dumbfounded by this statement, weren't tons of images and videos of huge gaps between sections on Model 3s?
He does not even acknowledge it happened, so I cannot assume that it is meant to say that the issues were fixed.
Am I missing something? Otherwise that's incredibly misleading.
I know there are a lot of people here who are so into Tesla. But this does not fit the HN content guidelines in anyway...
https://news.ycombinator.com/newsguidelines.html
> On-Topic: Anything that good hackers would find interesting. That includes more than hacking and startups. If you had to reduce it to a sentence, the answer might be: anything that gratifies one's intellectual curiosity.
How is quarterly statement from a Car company interesting to "good hackers" or how is this gratifying intellectual curiosity in anyway? If you want to discuss the financial/production reports of the company you can go to the forums dedicated to it...
The Tesla story is interesting to 'good hackers' because it is a company that does exactly the kind of thing that 'good hackers' love to read about: disrupt a bunch of incumbents. The fact that Elon Musk started out as a nobody that came to the United States in order to chase his dreams and is actually doing just that coupled with the fact that I suspect that a large number of HN readers either has a position in Tesla and/or drives a Tesla (or covets one) means there is a pretty good chance that substantial articles about Tesla will get upvoted.
If you can't deal with that rather than telling the people here to go elsewhere maybe you should go elsewhere or at least attempt to add to the discussion in some constructive way.
Palo Alto, California, April 1, 2018 --
Despite intense efforts to raise money, including a last-ditch mass sale of Easter Eggs, we are sad to report that Tesla has gone completely and totally bankrupt. So bankrupt, you can't believe it."
- Elon Musk
That joke might have been funny if Tesla was making 7500 model 3 cars / week.
