Wednesday, January 31, 2018

Why the Model 3 will save Tesla.

Tesla's Next 5 Weeks

I detail how certain events may unfold over the coming five weeks and why they may cause the share price to move upward. Short interest for the first two weeks of January is about to publish. Tesla short interest last June 30 was 27.34 million shares.

 From article, (An Electrek article discusses deliveries of Model 3s to the East Coast. The new car just went on display in NYC and Boston. Tesla showrooms have been experiencing crowds of people coming in to sit in the car. Many are people who ordered the car, and others are coming to see whether they want to place a new order.
The excitement is indicative that in addition to the half a million Model 3 pre orders, Tesla is likely to win many more orders, even before it catches up with the backlog it already has. Some people have apparently been waiting to place an order until the car was actually out on the roads.
Some Tesla showrooms are limiting customers to two minutes in the car because lines are so long.
The original goal was to build a production line to assemble 5,000 units per week, first. Then, the goal was going to be to increase production to 10,000 units per week by the end of 2017.
Last June, the vast majority of the production stations worked according to plan. A few, however, did not. The entire production line could only move as fast as the slowest stations, and that was very slow at a few tens of cars per week.
The focus of the media has been on production delays. But no attention has been paid to what Tesla has been doing with all of the engineers who built all the production stations that did work.
For all of the engineers tasked with building their individual stations that worked, it would make sense that Tesla shifted them to the original plan and had them work to double the production capacity to 10k per week for their stations. They should be finished by now.
Only the battery assembly stations are holding the entire production line up and that's being worked on as fast as they know how.
I expect Tesla [will stick ]with its original plan to get to 10k per week and will reach that rate as soon as the battery bottleneck problems are resolved. This would explain the delivery estimates by Tesla staff.
If so then Tesla would be targeting gross sales on the Model 3 line of around $22B rate once they reach that production later this year and the gross profit would potentially grow to $5B once all stations are moving smoothly.
Most of the engineers working on stations other than the battery packs should by now be finished doubling production for their Model 3 line stations to 10k units per week. The next logical thing to assign them to would be the design and construction of an assembly line for the Semi trucks and the Roadster 2.
Clearly Tesla has the staffing and it would make no sense to lay them off or have them twiddle thumbs when there's so much work to be done. Rather it would make sense for Tesla to quietly go about accomplishing things no one expects them to be capable of.)


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