Despite missing the goal in August by 28%, Electrek, Tesla’s preferred analytical website says Tesla misses Model 3 production goal of 6,000 units per week, but on track for overall Q3 goal.
> Electrek has learned that the automaker missed the 6,000 unit production rate goal, but Tesla is nonetheless on track for its overall third quarter goal.
> It follows our report from last week about Tesla being on track for a production record this quarter but slightly behind its ambitious Model 3 goal.
> Based on the same reliable source familiar with Tesla’s production, the automaker built about 6,400 vehicles during the last week (last 7 days) of August (from 24th to 31st midday) including about 4,300 Model 3 vehicles.
> According to the same source, Tesla produced about 53,000 vehicles including over 34,700 Model 3 vehicles in Q3 as of Friday.
New Definition of “Slight Miss”
It seems the new definition of “slight miss” is 28%.
Celebrate, Celebrate
If you want to know why Tesla likes Electrek, this paragraph explains it all.
> Let me start by saying that no matter how you look at those numbers, Tesla is producing electric vehicles at an incredible rate and that should be celebrated.
Electrek Goes Off Track
> It certainly looks like there were some production issues over the past two months, which could explain the many reports of delivery delays for Model 3 buyers. As a reminder production doesn’t equal deliveries.
> Hopefully, Tesla has a good reason for those, like focusing on Model 3 quality and profitability instead of higher output, but it remains to be seen.
Back on Track
> Based on our information, it looks like overall production goals are going to be somewhat easily achieved even though they missed their 6,000 Model 3 vehicles per week deadline and they haven’t even had another 7-day period at over 5,000 units per week.
Somewhat Easily Achieved?
Ok, how many will actually be driveable?
ZeroHedge has some interesting color commentary on Tesla’s Miss.
> Despite missing the August bogey, the obligatory “carrot on a string” followed immediately, with the article repeating that Tesla is on track to meet its overall third-quarter production goals. Tesla has been targeting total production of 50,000 to 55,000 Model 3 vehicles for the third quarter.
> Furthermore, we are still only about two-thirds through the quarter, so there is still plenty of time for force majeure events like cardboard fires, saboteur ex-employees, or the CEO stopping the assembly line in order to headbutt more of his vehicles. These are among the various “acts of God” that one just can’t predict, and a lot can happen over four weeks.
> Tesla reportedly built about 6,400 vehicles during the last seven days of August. However, only 4,300 of those turned out to be Model 3s – and there is no word how many of these vehicles may have to be “reworked” and how many of them were ready to be delivered to customers. Recall that according to a recent Business Insider article only 14% of 5,000 Model 3s that came off the line during the last week of June didn’t need to be reworked in some way.
Headbutt Explained
Innovative problem solving…
“Their answer made Musk angry and he started to headbutt the front end of a car, according to The Journal.”
https://t.co/fqbLret8sS— Citi Zen Ⓜ 彡 (@Socks5thAvenue) September 1, 2018
According to The Wall Street Journal, Tesla CEO Elon Musk started headbutting a car at Tesla’s Fremont, California, factory this spring after he learned the assembly line would stop when people got too close to it.
The Math
Tesla’s third quarter target is 50,000 to 55,000. That’s a conspicuously low target since the current goal is 6,000 per week. The goal was 5,000 a week in June.
This helps explain Electrek’s phrase “somewhat easily achieved“.
But what’s with “somewhat“? Why isn’t it “easily achieved“?
50,000 – 34,700 = 15,300.
Tesla needs to produce 15,300 vehicles in four weeks. That’s only 3,825 per week.
Is that easily achievable or not?
Problems
- Tesla needs to produce about 6,000 Model 3s a week to show a profit. (See related article number 1 below)
- What about the suspected parts shortage? (see related article number 3 below)
- How many will need to be reworked? (See ZeroHedge 86% of Model 3s Produced to Meet Tesla’s 5,000/Week Goal Needed Rework)
Related Articles
- Exploring Tesla’s Mountain of Debt: Musk Needs to Pick a Poison
- Exploring Tesla Share Price vs Short Interest
- Force Manure: Tesla Way Short of M3 Goals, Silicon Carbide Shortage Explanation
As noted previously, I am short Tesla via PUTs.
Mike “Mish” Shedlock
I see no data Tesla making a profit at 6,000 cars per week.
How many cars have to be built and sold to cover just interest payments on $10.5 billion in debt?
Musk makes Pinocchio look like a pug.