Tesla aims to start pilot production of Model 3 cars on February 20
reuters.com
reuters.com
Musks target of 500,000+ cars a year of velocity in 2018 is an insane goal!
By the numbers:
- They have just shy of 400,000 of the 3's on deposit, along with a backlog of other models.
- Last year Tesla shipped about 76,000 cars.
- Their Q4 delivery numbers were <25,000 cars and trailed expectations by about 5%.
- They blamed last quarter on autopilot hardware issues, eg OEM supplier / component issues.
- They made a significant uptick in velocity between Q2 (14,000 cars) and Q4 (22,200 cars).
I can't imagine how hard Tesla is pushing - for any Tesla HN's good luck! We are rooting for you :)
If, somehow, Musk reverses the chronic lateness and hits 500,000 in 2018 it's going to be quite the fireworks show.
https://www.bloomberg.com/news/articles/2017-01-03/tesla-fal...
(I have no idea how many employee reservations there are.)
Despite all this I've always imagined it to be a great place to work because of the world-changing potential of the work.
But the idea of all these people toiling away on an amazing product they can't even hope to own just seems incredibly depressing. I guess it's no different to all the people making iPhones in China, it just hits closer to home.
Meanwhile, Tesla is not making a profit and one wrong move could destroy it - ending the jobs of thousands and an environmental movement in one fell swoop. Giving luxurious benefits to Tesla employees just isn't possible at this point.
Your criticism that Musk is just a capitalist who doesn't care about his workers and treat them well seems completely unfair.
Let's say your total tax liability for a year is $10,000. You paid in $11,000 via Payroll and other taxes. Without the credit you'd be due a refund of $1,000. If you are eligible for a $7,500 credit because you bought a Tesla you'd be due a $8,500 refund.
Let's say your tax liability for the year is $5,000. You've paid nothing in taxes for the year (probably because you knew you were buying the car and didn't need to). You bought a Tesla which makes you eligible for a $7,500 tax credit. You do not get anything refund from the IRS, but the $7,500 tax credit offsets your entire tax liability.
So just because it's a credit doesn't mean the credit is effective for low income people. You have to have enough income to have a high enough tax liability to even get the full $7,500.
My car was $20k brand new with several options tacked on. Most people I know have used cars... getting a new car of any kind is a big deal IMO for most Americans.
Given that, I would say that calling it a "cheap" car is pretty accurate for most Americans. Obviously it is not in the range of used cars or the ultracheaps ($10-15K), but it's really amazingly cheap for an electric if they can make it happen.
[1] Note this is likely to be halved or a quartered for new orders as Telsa reaches the 200,000 vehicle mark [2] https://www.truecar.com/prices-new/honda/civic-sedan-pricing... [3] Rough estimate based on $150/mo in gas -> $50/mo in electricity
Will a 3rd-party battery replacement industry evolve, or will we always be stuck buying from the manufacturer?
If you are driving a half million to million miles in 20 years, an electric will probably really make sense. You MIGHT need to replace the battery. With a ICE car, you will need $5K of oil changes, $3K of timing belts, and around $20K more in gasoline than electricity, probably a new engine and transmission or two... There's probably another $5K worth of service in there (plugs, fuel injectors, transmission, belts).
So with a gas car you KNOW you're going to be in to it for basically as much as the purchase price of a Model 3 just in maintenance (again, if you are talking half a million miles).
https://electrek.co/2016/06/06/tesla-model-s-battery-pack-da...
While they will avoid much of the touch/feel issues with regards to buttons the real test is where the good plastics start and end.
With regards to production targets, not only do they have to get their plant to that level their suppliers have to be able to hit those numbers as well.
I might just put my next car purchase off now. I would like to see how Tesla is doing with this car on September 20th
Please use medians.
One thing to factor in though is the rate of deterioration of the battery pack over a 20 year period and other issues unique to electrics vs the maintenance requirements unique to an ICE vehicle.
It would be really interesting to see the breakdowns on those numbers.
# https://www.rita.dot.gov/bts/sites/rita.dot.gov.bts/files/pu...
Not sure why you'd assume that.
Current Tesla models have excellent residual values: 62% at 3 years according to black book, which is excellent for the luxury segment - and even better when you consider that EV values tend to be skewed by tax credits!
The Model 3 will share features like over-the-air updates that should help it retain value well.
https://electrek.co/2016/09/13/tesla-model-s-value-retention...
Are you saying they're kept that long by the original owner? Do you have a source for that figure?
I wish Musk hasn't said that he's not going to make a car that's cheaper than $35,000. I know he wants to add Level 5 Autopilot and whatnot by default on these cars, but he really needs to get to the $20,000 range at least. That's where the real mainstream is, and not just in the U.S. either. EVs will go mainstream when they cost $10,000-$20,000.
It may take another decade to get there, but if Musk doesn't build such a car others will. It's just that I would've preferred a Tesla car to put pressure on the quality of the competitors as well.
[1] http://www.zerohedge.com/news/2015-10-21/goodbye-middle-clas...
"I'm super excited about being able to produce a car that most people can afford," Musk said. "And there will be future cars that are even more affordable down the road."
"With something like the Model 3, it's designed such that roughly half the people can afford the car," he continued. "With fourth generation and smaller cars and what not, we'll ultimately be in the position where almost everyone will be able to afford the car."
From here: http://www.computerworld.com/article/3062365/car-tech/elon-m...
90% of the people living in the EU earn less than $30,000 per year. The EU's median household income is comparable to the US poverty line for median household income. The EU's GDP per capita is 60% lower than the US; they have 750 million people, with a total GDP 10% lower than the US.
Or take Sweden for comparison, it's below all but 12 US states when it comes to median individual income. The median US income is about 45% higher than the UK median. The number of countries on earth with a higher median income than the US, you can list on one hand.
These numbers are even more dramatically out of line, if you're talking about white households (which supposedly form the core of the populist anger). The median white household earns $75,000 and has a median net worth of $145,000 - an income number drastically higher than Sweden, Finland, UK, Germany, France, etc.
So remind me again how income numbers in the US are driving the populist anger.
When did he state that? I'd only read the general plan of 'make an expensive high-end car, use profits to make a less expensive mid-range car, use profits from that to make an affordable car'.
Or did he mean that they don't need to make a cheaper car for widespread adoption since owners can rent the car out as a self-driving taxi to recoup ownership costs?
So, I agree it will probably take a while for most people to be able to buy a (used) Tesla.
[1] http://www.usatoday.com/story/money/cars/2015/02/18/record-u...
I feel like we live on different planets. I'm a software engineer making six figures and I can't imagine spending roughly $30-35k on a car when I can buy a decent used car for $7k, and spend less than $1k per year on maintenance.
Sure I can afford a $35k car, but if I choose to put that in my 401(k) instead it could mean retiring 3-5 YEARS earlier.
Just saying, at the announced pace, after 2 weeks they've provided cars to every Tesla employee, their partners and children. That's a short test cycle indeed ;)
Auto production lines usually produce about a car a minute. 500,000 cars a year is about two production lines running two shifts. In 2005, the NUMMI plant, which is where Tesla is now, produced 400,000 cars with 4,700 employees. Tesla is talking about reaching 9,300 employees. They do more than final assembly there, but still, that's a high headcount for an auto plant. Ford's Kentucky truck plant also produces about 400,000 units a year with about 4,500 employees.
[1] http://www.autonews.com/article/20160504/OEM02/160509943/2-t...
Which is why they tend to move to larger modular components. Things like seats arrive preassembled and simply need to be inspected and installed. Inspection can happen off the assembly floor and managed without disrupting production.
> You have to trust that the 3rd party supplier is meeting the required spec in manufacture and that the parts are damaged in transit.
You don't have to rely on 3rd parties to run an assembly plant. Your assembly plant can be fed by your own manufacturing facilities. But if you do rely on 3rd parties, it's definitely possible and companies like Apple do it with great success.
The quality of passenger cars is so, so much higher now than prior to the use of these methods. It seems like they've got the quality control processes taken care of to some extent.
Musk may have been inspired by this plant. http://www.businessinsider.com/tesla-factory-like-ford-plant...
[1] http://insideevs.com/wp-content/uploads/2013/03/tesla-info.j...
It's an interesting read, and goes into more details about the "machine that builds the machine" concept that Musk has talked about recently. It gave me more confidence that Tesla might achieve a real leap forward in terms of productivity.
Density of automation equipment is all well and good, but it comes at a price of being difficult to maintain. If a tool or a robot breaks in some way (and any FMEA will tell you about the myriad of ways that can happen) then people will need to get into the cell and fix it. If you need to remove a robot, gripper or fixture - well, that's going to be difficult if you've landlocked everything by packing the machinery in so densely.
Vision systems for handling are great idea, but they are a nightmare to set up and to keep clean, especially in a welding shop.
Robots that repair the looms of robots around them. Fantasy, and it will continue to be fantasy for a good while yet.
[1] https://www.bloomberg.com/news/articles/2017-02-09/tesla-emp...
From a computing viewpoint, scaling a car production line is not a theoretically hard problem (it's very parallellizable, but you have to take supply chains into account).
Bad news for $TSLA short sellers. They have piled up more than $9 billion. http://finance.yahoo.com/news/short-sellers-getting-steamrol...
Frankly, the likes of Honda and Toyota are probably laughing at tesla. Once their ducks are all lined up their size will allow them to produce electric cars at an insane scale. Shortsellers bet on this happening sooner than later and have so far lost that bet. But that doesn't mean it cannot happen tomorrow. Telsa is still on a knife's edge, will be for a decade or more. Tesla knows this an so is trying to leverage its battery know-how into other fields, a hedge against a decent honda electric hitting the US market.
Just because Toyota, Honda and the like manufacture gasoline cars at a large scale, one cannot postulate that they will overnight produce electric cars at the same scale. Assembly line retooling is a big deal.
Also, if some new battery tech comes out, then Tesla will get their hands on it, being half the world's battery supply.
If I was Caltex/Shell/BP/Exxon etc I would be forming a group to drive support to hydrogen, both via govt and manufacturers. Should consumers largely go electric not many people will turn up to their shops any more.
Petrol stations will not make much money on electricity if they install chargers, but they will sell a lot of food to customers waiting to charge, even "supercharging" is quite slow..
According to wiki the cost to put in Hydrogen fueling infrastructure would be about 20% of electric: https://en.wikipedia.org/wiki/Hydrogen_station
It's very expensive to keep hydrogen cool enough to stay liquid, but it's not exactly cheap to keep hydrogen compressed in massive tanks that always leak either. Moving it around is another problem, I find it extremely unlikely that this costs less to operate than electric infrastructure, which is static.
Do they though? How come GM was able to shop a reasonably priced Chevy Bolt as a competitor to Model 3?
I realize that in car manufacturing GM is a leading brand with economies of scale working for it, but in electric battery world they're a nobody, so I'd expect them to pay close to market price, no Gigafactories and all?
Do they lose money on Bolts?
Personally, I'd never buy a car from someone as small and young as tesla. They just don't have the legs. I've been brought up to buy good used cars and drive them until they die. I expect 20+ years. BMWs, Mercs, hondas, even jeeps and Volvos really do last that long if you are nice to them. Until I see a 25yo Tesla driving down the road I am not a potential customer.
Tesla doesn't have to make a single car anymore if automakers would make a real electric car; they'd just supply the industry with batteries. But, compliance cars. So, Tesla plods on with their own vehicles.
However, I wonder if it's harder for Tesla to get better at fit & finish and interiors and quality, or if it's harder for the entrenched players to gut their petrolhead heritage, and sacrifice their lucrative combustion engine business, and especially the lucrative service & repair business it creates.
Another angle is that Tesla is Silicon Valley bred, they're a software company through and through. The other companies treat software as an afterthought, their infotainment systems range from "monstrosities" to "I don't want to claw my eyes out yet". None are good. Some are bearable. Teslas is good, and it's an obvious priority, and software is such a huge part of modern cars and their performance, that the hardware will be commoditized.
It's definitely interesting!
Are they, really? I'm not impressed. Software is very central to their cars, and I think the end user experience is pretty abysmal. Which is par for a car manufacturer, of course, but I had other expectations given their Silicon Valley heritage. Get Apple involved already! They don't seem to be going anywhere with their own car investments anyway...
As the saying goes, "first they laugh at you, then they fight you, then you win".
The laughing stage is far gone.
And of course Tesla is not really profitable as in the quarterly revenue, but according to their statements, they do get above 20% profits from selling cars which get eaten up by their aggressive reinvestments - the company is growing by about 50% year over year.
The same goes for BMW. They recently announced they expect lower profitability of the entire make due to cost of production of the electric cars.[2]
Each Fiat 500e is sold with $14000 loss[3].
Besides, I'd argue that Tesla make money on their cars not because they are in a "profitable segment of electric cars", but because they are in profitable segment of luxury sedans (and SUVs). Sure, all-electric is part of their appeal, but they are no more profitable than luxury sedans with combustion engines.
[1] http://www.torquenews.com/2250/nissan-leaf-now-profitable-so... [2] https://www.bloomberg.com/news/articles/2016-11-04/bmw-third... [3] http://jalopnik.com/sergio-marchionne-doesnt-want-you-to-buy...
http://www.ft.com/cms/s/0/433ddb64-653a-11df-b648-00144feab4...
For Elon Musk, that would be the "Mission. Fucking. Accomplished." moment[0]. His point all along is to make cars electric, not to be the one who sells most of them in the long run.
[0] - https://xkcd.com/810/
[1] It's very risky to short a stock as you can end up losing a very large amount of money, as stocks can increase many times in value. When holding a stock, your risk is finite, as it can only lose 100% of it's value. When shorting, the stock can double or triple in price.
Borrowing costs for TSLA stock have been over 20% annualized (I don't know the current situation).
I have a hundred shares. I wouldn't bet against Elon.
That's not from profits, that's from shareholder investments. Its the power of the stock market to dump money into an asset. But don't pretend that Tesla managed to scrap together like $3 Billion from their years of operating losses.
https://media.ycharts.com/charts/aa2e00215ae08b27274cafbb493...
Here's Tesla's stock offerings, diluting Tesla shareholder value:
https://www.nytimes.com/2016/05/19/business/tesla-to-offer-2...
http://money.cnn.com/2013/05/15/investing/tesla-stock-offeri...
E.g. http://www.forbes.com/india-billionaires/list/#tab:overall
https://en.wikipedia.org/wiki/SEC_Rule_10b5-1#A_possible_loo...
https://en.wikipedia.org/wiki/United_States_v._O%27Hagan
https://en.wikipedia.org/wiki/Chiarella_v._United_States
Which isn't to say the SEC wouldn't go after him. Cops arrest people in the US for photographing public things all the time, for instance. Just that if it went to court he'd probably win.
Does somebody know if there's a more recent one? It looked impressive even it's age.
But there are a lot of caveats. For example:
First of all, a company sets standards in wages, benefits, and hours to the extent that it is a monopsony [1] in its particular geographic market and labor market, and also insofar as there is unemployment in the region (and, thus, there are people who could take your job and it would be hard for you to find another job). Tesla is a very large employer of unskilled labor, as well as skilled. The Bay Area doesn't have as high unemployment as other areas, but it still has some. Therefore, the labor conditions at Tesla impact labor conditions at other workplaces to some extent.
Second, more on the level of values, why should a worker have to miss his daughter's ballet recital on Saturday because his manager told him on Friday afternoon at end-of-shift that he has to come in tomorrow? That should not be necessary in a well-run factory. Maybe it would be different if a factory worker at a Tesla factory could participate in the vision by buying a Tesla car, but that's not possible either because they're too expensive.
[1]: https://en.wikipedia.org/wiki/Monopsony: "In economics, a monopsony ... is a market structure in which only one buyer interacts with many would-be sellers of a particular product [here, labor]."
I'm in Australia and put a deposit on in the morning the day it came out, hoping I'll see the car this year but doubtful.. next year? Maybe.
There is ramp-up, LHD priority, and shipping time to factor into the schedule.
eg Every Model S delivered to customers in Australia had the Autopilot hardware, because it took that long for them to build and ship them.
The point being, why would anybody put money down on any car really, when it's a rather significant monetary investment not to be delivered for quite a while.
We've not seen it to this extent in the "affordable" scene, but even if you flip it, there's probably enough market demand to be able to wipe your face on the deal if you did want to chase the new shiny thing announced in the meantime (which may or may not have extended build times too).
That being said, I'm with a lot of people here that aren't new car buyers - I know you need new car buyers to have a used car market, but I'm not tuned into the mentality of it all.
Mass-market cars on the other hand depreciate as soon as the key is turned. So not only dp depositors lose interest on that $1000 but they also lose in depreciation.
I'm thinking about getting a second car for my family. I don't need it immediately. A Model 3 sounds like it would be perfect for the job. I put $1,000 down to reserve one just in case. If I decide I don't want it, I'll get my money back. I'll miss out on maybe $15 of interest on that money in the intervening time, big deal.
Chevy got the Bolt to market at the same price Tesla is aiming for with the Model 3, but it's a $25k car with a $35k price tag. If the Bolt makes it to Australia before the Model 3, I may consider it.
In the meantime I view the Model 3 as more than just a car: it's an investment in a company pushing the world to acknowledge that fossil fuels are literal and figurative poison which we need to abandon post-haste.
Driving my Model 3 around will be as much about driving a BEV as it is about providing visual evidence to other road users that the age of the internal combustion engine is over. The Otto cycle ist kaput.
In addition, I contribute to Plan International because I want to help rapidly educate people in impoverished nations so we can keep population levels under control. From the "it is just a car" perspective giving money to poor women in underdeveloped nations is throwing good money after bad. From my perspective it is the best thing I can do to ensure the next generation actually has a world worth living in.
There are probably better ways to accomplish this with the money I have, but driving a BEV and pulling people out of poverty sounds like a decent starting point to me.
Also: "last week design changes were still underway, which could hinder the ramp-up to full production"
This is kind of funny because it so often what you see in software which was his background. I wonder if any exec at GM ever pushes the envelope in this way.
I am sure you could pay someone to keep their pre-order open, buy the vehicle, then sell it to you afterwards. But that seems like a good way to get screwed, on both sides of the deal.
Once Tesla sells its 200,000th US car the credit will be cut by 50% to $3,750 after a period of up to two quarters. That puts the likely cut time at July 2018.
I will say I'm not sure what price segment Tesla's endgame for the Model 3 is. I assume somewhere in the 25-35K mark, but there's a lot of variance in that range and without seeing the Model 3's trims and features it will be hard to judge where it should fall compared to the competition.
Tesla's site has impressively little basic information about the Model 3. Heck, I don't even know if it has electric windows (obviously it does, but my point is that Tesla's site lacks a 101 level spec sheet right now). Kind of ballsy to ask for a $1K downpayment for a vehicle they aren't telling you a darn thing about.
It's not a downpayment, it's an instantly refundable deposit - it's basically a free* option to reserve a spot at the front of the queue.
* free apart from the opportunity cost of investing $1k, which in a savings account or a money market fund might be less than $20 over two years...
The main reason I argue this is that to a lot of consumers, an electric car is nice but functionally less useful than a gas car. That is, a lot of consumers think, "What if my battery runs out? How do I charge it in an emergency?" referring to if the battery runs out somewhere. In a traditional car, if you go somewhere far and run out of gas you can just call AAA and they can either tow your car or bring you a bit of gas to get you to your next gas station, and this isn't really possible with current electric cars. Even in town, if you forget to charge your car you can't just go to the gas station, you have to wait a bit of time for your car to be ready to go. Don't discount 5 vs 15 minutes -- I can fill a car and be done in less than 5 minutes whereas it takes a bit more time to charge an electric car, even a Tesla at a supercharging station.
The company that produces a car that isn't gas powered but can be re-powered in the same amount of time, or creates the technology within batteries, will be the one that causes a true revolution. I don't know if I'd go so far as to short TSLA but I am not completely convinced their cars will take off (also consider the fact that a $35,000 car is still really expensive for the average consumer).
The percentage of trips over ~215 miles is quite small. Doing the math you are saving many hours/year on average. Of course I'm not accounting for edge cases but that's the point they are edge cases.
Looking further ahead, the self driving will likely allow the car to go fuel itself while you are out of it. And generally we should see more and more parking spots with chargers.
For myself personally, I probably take 5 or 6 trips per year where I'm covering over 400 miles in a day. The time it takes to recharge the car would be a big negative to me. It's nice to be able to jump in the car in SF early morning and be in Seattle by evening. Not sure I'd even make it half way in an electric car.
I'm sure someone will comment "well this car isn't for you" and they are correct.
Your bladder/hunger control must be way better than mine
Another problem is that, depending on where you are going, it looks like you might not be able to charge anywhere on the route. I found a map of locations here: http://www.teslarati.com/map/
Like the typical route between Denver, CO to Lake City, CO (255 miles one way) has no supercharger close. Would you modify your route to swing by the location? Or would you have a friend drive a gas car instead?
I have a 90D so I'd be able to make that drive in one go, although it would be close!
30 minutes if you can drive right up to a charger. Do you think that will be the case once hundreds of thousands of EVs are on the road? Have you ever road-tripped in the summer and had to wait in line for gas, which takes minutes to fill? I have. Often.
That being said, having done Seattle to San Diego recently (while passing thru Gilroy), I should have spent a day in Oregon or Norcal, 13hr days are just not my jam when it comes to driving.
Absolutely. I love my electric car for this reason and I _hate_ it when I'm in our hybrid and the dumb yellow E comes on and I have to make an unplanned pitstop.
I also got over range anxiety pretty quickly too: I've taken our Model S from Portland to Yosemite twice. With little kids, the time to supercharge is less than the time needed to get get them all snacks, potty breaks, stretch, etc. It was great!
PS: Just noticed that the last like 10-15 comments I've made are all about Tesla. I should probably get a new hobby :P
It's true that this is a negative for EVs, but it's also one of their great advantages.
Heck, it's even better than gas cars now where you car will actually tell you where the nearest super charger is in your range and if there are spots for you at it.
The only real edge case is if someone completely doesn't heed their cars own warnings about running out of energy, and then, well, there's still tow trucks for that edge edge case. Just like if your ICE car breaks down.