Bloomberg Model 3 tracker shows production crashing below 1000/week

Discussion in 'Model 3' started by TeslaInvestors, May 6, 2018.

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  1. Pushmi-Pullyu

    Pushmi-Pullyu Well-Known Member

    Given the surprisingly large variation in the number of undelivered Tesla cars in any month, that seems like a dangerous assumption! If you're looking to make a ballpark estimate that's fine, but if you really want to zero in on a close estimate, then we need to look at Tesla's production histrory, and how its three-month production cycle affects the number of cars in transit vs the number in production. For the first month of a cycle -- and that includes October -- there will be a higher percentage of cars in transit. The first month is when Tesla sends cars to the furthest away destinations, such as China and Australia, which significantly increases shipping time, which of course increases the percentage of cars in transit for the month.

    For those who are not obsessed with Tesla :D have not been following the "story" of Tesla very closely, the three month cycle works like this:

    1st month: Priority given to distant overseas markets, such as China and Australia

    2nd month: Priority given to closer overseas markets, such as Europe

    3rd month: Concentration on domestic deliveries, and during the final ~2 weeks, concentration on customers nearest the Fremont assembly plant. Also, attempts to maximize both production (running the assembly lines 24/7) and trying to maximize sales for the quarter by selling off much or most of the "inventory" cars (that is, cars used for demos and service loaners).

    This three-month cycle causes a lot of month-to-month variation, for instance in the level of domestic sales and in the percentage of cars in transit at any given time.

     
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  3. Pushmi-Pullyu

    Pushmi-Pullyu Well-Known Member

    Yes, and as Roy_H said, more recently Elon has been talking about ramping up to 7k and eventually 10k for the Model 3 alone. At least, that is my understanding. As I recall, those who follow this sort of thing closely (for example, discussion in the Tesla Motors Club "investors roundtable" discussions) noted that during the most recent conference all, Elon didn't mention the 10k goal. Therefore we may presume (correctly or incorrectly) that Tesla no longer considers a run rate of 10k TM3's per week, by the end of 2018, to be an achievable goal.

     
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  4. Pushmi-Pullyu

    Pushmi-Pullyu Well-Known Member

    That should be: during the most recent conference call. Dang! I need to proofread my posts more carefully.

    And now I'm regretting advising Domenick to cut off editing of posts after 2 hours.
    :(
     
  5. Roy_H

    Roy_H Active Member

    Thankyou for this informative post, and I agree it would normally apply but since at this point Model 3 is strictly North America, I don't think it applies for this month. However if you still think there will be a difference in in-transit Model 3 vehicles, care to give a guess on how many more in transit than last month?
     
    Last edited: Oct 30, 2018
  6. Pushmi-Pullyu

    Pushmi-Pullyu Well-Known Member

    This isn't a question I've studied enough to have an informed opinion. We should ask WadeTyhon to chime in; he's so knowledgeable about the subject that he's joined InsideEVs staff (as Wade Malone, I think?) as a contributor to their monthly sales reports.

    If Wade doesn't chime in here, one of us should send him a private message.

    However, in general, without getting into the actual numbers, I'll point out two factors working against one another here:

    1. Without any end-of-quarter push to maximize October sales, the number of undelivered Model 3's will tend to rise during the month.

    2. Tesla is working to improve the capacity and efficiency of their delivery system, and in fact Elon said recently that they have made it a priority to significantly reduce the average number of days between production and delivery. But just how successful Tesla will be at that is, I think, anybody's guess.

     
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  8. Pushmi-Pullyu

    Pushmi-Pullyu Well-Known Member

    There was this exchange in a comment thread at the IEVs news site:

    Tech01x said:
    First month of a quarter means that most of these sales are from vehicles already in the delivery pipeline. The factory’s output is mostly on trains heading to the east coast.

    The Model 3 results show a pretty strong 1st month of quarter which is a 25% gain QoQ. Bodes well for a very strong Q4. The Model S/X is essentially flat QoQ, which is great given how much was delivered last quarter. If they do end up 25% higher than last quarter, that’s 70,000 Model 3’s in Q4.

    * * * * * * * * *
    Wade Malone said:
    Agreed, our takeaway as well.​

    However, I think where Tech01x said "most" and "mostly", those are exaggerations; surely the actual amounts are less than half. I'd say "much" and "partly". If it really was the case that "most" of the October sales were from vehicles already in transit at the end of the previous quarter, then Model 3 deliveries would have dropped far more than just ~22250 (Sept) to ~17750 (Oct).

    Another comment from Wade, in the same discussion:

    Wade Malone said:
    Yep basically what we expected as well going into the month, although a bit lower than hoped since many vehicles in transit to the East coast did not move in time for October. Production has stabalized and international sales have not yet begun.​
     
    Last edited: Nov 2, 2018
  9. Roy_H

    Roy_H Active Member

    My little chart was so far off the facts that I am going to discontinue. I suddenly have more faith in Bloomberg production numbers.
     
  10. Pushmi-Pullyu

    Pushmi-Pullyu Well-Known Member

    I hope it wasn't anything I said. I think there is value in attempting to make an estimate, even if we don't have access to the data that InsideEVs uses for their estimates. It's too bad that IEVs treats their sources as confidential, because it would be interesting to find out how they do it.

     
  11. Roy_H

    Roy_H Active Member

    Nothing you said, just doesn't come anywhere near the facts required to support known sales.
    I have started to add data from Bloomberg (duplicating their chart) and electrek, and what this shows so far is just how divergent different methodologies can be.
    Model3VIN_2018-11-05.png
     
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  13. Roy_H

    Roy_H Active Member

    Added a few previous weeks for electrek and Bloomberg. I believe electrek is the most accurate as their data is supposedly from an inside Tesla source. It also makes the most sense that production would be down this past week because we know new Grohmann robots are being installed at GF1 for battery pack assembly.
    Model3VIN_2018-11-05.png
     
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  14. TeslaInvestors

    TeslaInvestors Active Member

    Tom tried very hard to hide the saw tooth production volume of Model 3. Moved to 13 week trailing average to hide the slide.
    But still can't hide it. I hear inventory is piling up at various Tesla holding stations.
    7000 Model 3 a week anyone?
    bb_m3_tracker_dec1.JPG
     
  15. Pushmi-Pullyu

    Pushmi-Pullyu Well-Known Member

     
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  16. bwilson4web

    bwilson4web Well-Known Member Subscriber

    I'd noticed but we're about 30 days from the Q4 numbers:
    Source: https://electrek.co/2018/11/30/tesla-model-3-production-rate-1000-day-maintain-reduce-costs/

    As we reported earlier this month, CEO Elon Musk said that he would be walking the entire Model 3 production line, from battery cell production to final assembly, on the 27th and 28th this month in an email sent to employees obtained by Electrek,

    The best fertilizer is the farmer's footprints.

    Musk told employees today:

    “If you are able to help in any way with getting Model 3 production to a steady 1000 per day at excellent quality, everyone at the company should please consider this their top priority. Body production currently appears to be our limiting factor, so it needs the most support right now. Please focus on simplification and reducing cycle time first and then uptime.”

    I do not get excited about a Musk email or tweet as they are often just a brief snapshot, a flash. But it does explain how TSLA hit $350 on Friday and has this notable gem:

    “It’s important to bear in mind that the cost of the car is made up of about 10,000 unique parts and processes. depending on how you count it, the current cost of a standard range Model 3 would be around $38,000, so each part or process step only costs around $3.80. That means finding cost efficiencies is a game of pennies, even though it might not seem so.”

    Bob Wilson
     

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