Originally Posted by
ERD50
But Musk planned on 10,000 Model 3's per week by now. They were around 5,000/week, with lots of push. What can they do in the near term after a 7% cut?
Sure, exports mean more sales, but if they are only making ~ 5,000, that means fewer sales to the US. I would think they would want to go for all they can while they still have the half tax credit in the first half of 2019, and the quarter tax credit in the 2nd half.-ERD50
.... As an investor, I look at the trajectory of a business based on actual performance and demand, not the platitudes promised by the leadership or PR department..
But those promises are what at least some investors and debt suppliers are taking into consideration. Do you think the market just ignores the comments of the CEO? I guess we shouldn't believe anything Musk says about Tesla? He really doesn't plan to succeed? It's all a game? This is just silly. It does matter.
If I were an investor, I'd sure want to make some estimates about those demand numbers. Cutting staff while adding export sales (they had to wait for approvals in those countries)? As an investor, I'd be concerned.
Do you have any answers for that? Or do you just go on faith?
Did Tesla size themselves for a 10,000/week M3 run rate? If so, 5,000 is a big problem.
....With Tesla, there is no significant short-term threat to continued growth. ....
None? I think you have blinders on. Companies always face threats. I'm not saying they won't grow short term, they should. But it is far from a slam-dunk.
... but all of the angst over Musk overpromising misses the point. Tesla has kick-started a dormant electric vehicle industry and is poised to be the next Apple, Amazon, or Microsoft for investors. ...
There is a lot of 'stuff' between "poised" and "delivering".
... The stock market is very skittish, right now. Headlines drive huge swings, but if the underlying business is promising, the stocks should rebound. Tesla has a very promising business.
I just ran a 3 month chart of S&P, GM, F, and TSLA. I didn't see anything 'skittish'.
I can't help but think that their automated assembly line (the one that proved humans were under-rated) has had some fixes done to it. My guess is the $35,000 Model 3 price always depended on machines doing most of the work while the under-rated humans pushed a button and dozed (Meet George Jetson!). I can't help but think they will get more out of those machines as time goes by.
OK, see if you can run some numbers. How much labor goes into an M3? How much will be displaced by improved automation? I would certainly hope that most of their automation worked as expected, and that there were only a few problem areas. So the incremental difference should be pretty small, I would think. The only other explanation is that their manufacturing engineers are incompetent. I doubt that's the case. But as I mentioned way back, I was rather shocked at what Musk described as some of their automation issues. I've seen those kind of issues dealt with, and they sounded almost trivial (problems with a robot picking up a sound absorbing mat - just add 'grab' features to the mat. It's not rocket science).
Certainly they will get better as time goes on. But they are facing the double-whammy of shrinking tax credits, and moving down the product line to lower margin product.
From mid-range to standard, I think we are talking a price delta of ~ $9,000 for a battery delta of 12kWh (62-50?). Not sure what the estimates are for $/kWh, but even if it is still $300/kWh, that's a $3,600 reduction, so that's $5,400 in lost revenue (or are there other things between standard and mid-range I missed?). That's a lot to make up.
-ERD50