[ckastner]

> The Model 3 output increased exponentially, representing a fourfold increase over last quarter. This is the fastest growth of any automotive company in the modern era. If this rate of growth continues, it will exceed even that of Ford and the Model T.

Way to spin all the production issues and delay of the previous quarter into a positive.

They're way behind the goals they set for themselves, but instead of measuring by those goals, they measure themselves by their weakest performance, and suddenly their performance becomes historic.

[gwbas1c]

I never expected Tesla to deliver the Model 3 on time. I just "delayed" my order to AWD because my Leaf lease is up before I'll get the 2WD Tesla. (Also, because my wife wants a minivan and Chrysler now offers a plugin minivan.)

Remember, no car in history ever had 500,000 pre-orders. No car even came close. If anyone expected Tesla to ramp up to that kind of production overnight, they are delusional.

Besides, when I ordered my model 3, I assumed that it would be very late... So late, that I assumed I'd just wait for the AWD one to replace our AWD car.

[maxerickson]

The pre-orders are such a silly point.

Ford builds more pickups than that a year, with basically 0 pre-orders. They simply don't bother with pre-orders, they don't need the money, they don't need the promotion, etc.

Is the lack of pre-orders for the F-150 a sign of weakness? NO!, even though the thing is super popular they are able to produce enough to meet ongoing demand.

[jacquesm]

> Remember, no car in history ever had 500,000 pre-orders.

That's true, Citroen had a pretty good run with their record of 80,000 pre-orders (it stood for 60 years). But that was before the internet, all of the orders were made in person, they were non-refundable orders and there never was any doubt that Citroen would deliver the cars.

[CydeWeys]

Weren't all (many?) of these Tesla preorders made in person too? I remember lots of news footage of long lines of people standing out in front of Tesla dealerships?

[jacquesm]

https://www.tesla.com/nl_NL/model3/reserve

[lgbr]

> Remember, no car in history ever had 500,000 pre-orders. No car even came close. If anyone expected Tesla to ramp up to that kind of production overnight, they are delusional.

Although you could be pedantic about what consitutes a pre-order, this isn't strictly true. Demand for the Mustang is truly unprecedented, even by the Model 3. Have a look at the Mustang production from that timeframe: https://upload.wikimedia.org/wikipedia/commons/thumb/d/d7/19...

[dsfyu404ed]

You don't need to pre-order if you expect the thing you want to buy to be readily available in enough volume to meet demand. There's millions of fleet trucks out there on a fixed age/mileage replacement schedule. Nobody is rushing to pre-order F150s because they know they'll be available when they want them.

[frgtpsswrdlame]

>Remember, no car in history ever had 500,000 pre-orders. No car even came close. If anyone expected Tesla to ramp up to that kind of production overnight, they are delusional.

At the same time this is an admission that Musk is/was selling a delusion to people when Tesla set it's production goals.

[toomuchtodo]

Optimism isn’t delusional. They’re already making ~192k vehicles a year at their current 3/S/X production rate (which will only increase).

You would have to be malicious or ignorant to think that can’t be scaled up to NUMMIs previous 350k/year run rate in the next 3-12 months.

Disclosure: TSLA shareholder

[danso]

2017 was its best year, and it produced ~101,000 vehicles: https://www.theverge.com/2018/1/3/16846860/tesla-2017-delive...

[Robotbeat]

I believe he was referring to the NUMMI factory pre-Tesla, which produced about 6000 cars and trucks per week at its peak.

It does seem like Tesla will soon (3-12 months) eclipse that record.

[toomuchtodo]

Correct! And that NUMMI run rate Toyota achieved was (supposedly) only 60% of the facility's total manufacturing capacity. It appears to be entirely realistic for Tesla to meet their 500k/year vehicle production rate at NUMMI.

[thisisit]

> Way to spin all the production issues and delay of the previous quarter into a positive.

I don't really like Musk but sending positive messages in Investment relations is the key to keeping the company afloat. At one of my previous employers we lost top 4 customers and 10% of our revenue. But, the investment relationship site said - "We are up 1% in revenue, if we discount top 4 customers".

If Tesla admits and says - "We have improved but we are still behind on our original promise" then the stock price is going to drop like a rock.

[misja111]

No, investors are not that stupid. They might buy these marketing talks for a while but eventually they will see through. The recent drop in Tesla's share price is a testament of that.

"You can fool some people all of the time, and you can fool all people some of the time, but you can't fool all people all of the time."

[bald]

Price is a function of supply and demand. So this tactic is better than the blunt tactic even if it manages to fool only one shareholder.

[chillingeffect]

Yes, it's about the ratio of shareholders you can fool all the time to the ratio of the shareholders you can't fool all the time.

[thisisit]

I agree investors are not stupid. But, I never said it was about investors being stupid. It is simply not saying stuff which casts doubt about Tesla's ability to deliver.

People are going to arrive at the conclusion irrespective. Take the GP for example, he/she correctly pointed out that Tesla is behind schedule. There is nothing wrong with that conclusion.

[ProAm]

> then the stock price is going to drop like a rock

Shouldn't investors know the truth about their investment? Give people a chance to keep their money if the are making a poor investment? (Im not saying Tesla is, but smoke and mirrors is a poor way to present your company to the public)

[komali2]

He didn't lie, and investors that care about the numbers we're talking about here are welcome to look at them.

So perhaps the lesson is savvy investors should ignore the pr and focus on the hard numbers?

[fmihaila]

> Shouldn't investors know the truth about their investment?

Don't they? Tesla gave the raw numbers. Investors (should) use those to make up their mind.

[jimrandomh]

Stock price is mostly controlled by the sort of investor for whom figuring out a company's prospects is a full-time job for multiple days. PR spin matters, but you should expect the stock price to mainly reflect the numbers, not the spin.

[ballenf]

The message to investors is more about demonstrating that they haven't given up and are still enthusiastic about improving.

What investors flee from is demoralized companies where the leaders are burned out or have stopped trying to make gains.

[_pmf_]

> I don't really like Musk but sending positive messages in Investment relations is the key to keeping the company afloat.

Let's see how the SEC will like this line of argumentation.

[justicezyx]

Dishonest is the norm of doing business That does not make them right

[mariusmg]

>they measure themselves by their weakest performance, and suddenly their performance becomes historic.

Yeah, is called PR. Shitty, but everyone does it.

[ksherlock]

“Winners compare their achievements with their goals, while losers compare their achievements with those of other people” -- Nido Qubein

[ucaetano]

Yeah, and you need more than 2 data points to claim it is exponentially. This is bullshitty PR.

TO: 10 vehicles

T1: 40 vehicles

Is production growing 4x per T, or 30 vehicles per T?

[Robotbeat]

But there WERE more than two points; surely you know that. Q4 was not the first quarter that Model 3s were produced. Q3 of 2017 is. So that's three points.

To use your example:

T-1: 2 vehicles

T0: 10 vehicles

T1: 40 vehicles

That is exponential. If it was only a linear ramp-up, that'd imply negative 20 Model 3s were produced in Quarter 3 of 2017.

You might think this is being pedantic, or that "exponential" is just a buzzword, but it's not: the point about exponential ramp-up is that if you're off by a factor of, say, 4x in production, that may mean you're only behind a few months. A relatively small time change corresponds to a very large difference in production.

Exponentials don't last forever; eventually a plateau is reached. But as you're bringing automation/production up, you're still in the exponential phase (as the data shows), and so small delays can make a big difference in production without telling you much about how many you'll produce once production is fully up and running.

[lallysingh]

Musk is a good salesman.

[kbody]

Musk is a genius, but still not everything that a company does is done by the CEO.

[InitialLastName]

> Musk is a genius,

Apparently, Musk is a good salesman, especially of himself.

[pm90]

Come on, he can be a salesman and a genius. At least he is a very extreme determined and hard working person, if not an actual "genius" (whose brains are wired differently). People don't generally make a mid career change into rocket science and then have the most successful private rocket launch company.

[InitialLastName]

> People don't generally make a mid career change into rocket science and then have the most successful private rocket launch company

... except for the other successful entrepreneurs who made mid-career changes to fund private rocket launch companies:

- Jeff Bezos (Blue Origin)

- Robert Bigelow (Bigelow Aerospace)

- Jim Benson (SpaceDev)

- Richard Branson (Virgin Galactic)

I'll grant that Musk appears to be a successful businessman, and an effective leader, but his real strength appears to be selling his ideas so hard that even his most Boring (tm) projects get covered in giant piles of hype.

[jacquesm]

You forgot Carmack and Armadillo Aerospace.

https://en.wikipedia.org/wiki/Armadillo_Aerospace

[ubernostrum]

Musk's standard operating procedure is to

1. Find a market where most or all of the fundamental R&D has already been done and paid for by someone else, and is publicly available to use

2. Enter that market, evolve/iterate the state of the art a bit

3. Promise immense economies of scale, and slather everything with glittery marketing and PR stunts

This is what SpaceX is doing. This is what Tesla is doing. It is not a sign of "genius", and in both cases the promises Musk is making are... ambitious.

There have been multiple attempts to bring down the cost of launching stuff into space, and with the smartest people in the world working on the problem we've seen only modest gains. Musk barged into the market and promised at least an order-of-magnitude reduction. So far that has not, to my knowledge, materialized, and I know of nothing in the pipeline which would magically cause it to do so (and economies of scale with things as expensive as space launches are uncharted waters).

And with Tesla, Musk seems to have overpromised on production. But, amusingly, building a factory that cranks out cars -- even slightly-exotic cars! -- is kind of a well-understood problem. I strongly suspect the thing holding Tesla back is Musk's Silicon Valley "not invented here" mindset leading him to disdain the accumulated knowledge of the existing industry. Which is not a "genius" move, by the way.

[throwawaydream]

Beyond all the spin, they stated the following important facts:

- Produced 2020 cars and expect to produce the 2000 next week. - Tesla does not require an equity or debt raise this year

I think these two facts laid to rest a number of concerns from last couple week: production rate, running out of money, moody's rating cut. The one major thing that's still pending is the last week's fatal crash.

As far as I can tell, this is a great progress from where we were last week.

[dmode]

It IS a massive positive. The only reason you are complaining is because Musk set some super ambitious goals. But if you read the report, they are already producing as many Model 3s as Model S and S has been in production for 5 years. It is a monumental achievement for a company that only has been selling mass produced cars from 2012

[rcMgD2BwE72F]

The initial 2020 target was 500,000 cars (forecast made early 2016).

Today, they maintain a production target for 2020 of… 1M cars. Despite the delays.

They can achieve 50% of that goal and still be one of the best performing company in recent history. But you would probably insist that it's the biggest miss ever (only half the production target!).

[cjhopman]

The initial 2018 target was 500,000 cars (forecast made mid 2017).

Today, they are on track to make 120,000.

When this particular company says that their 2020 target is 1M cars, it's a totally meaningless statement.

[empath75]

> If this rate of growth continues, it will exceed even that of Ford and the Model T.

https://xkcd.com/605/

[mgiannopoulos]

Why shouldn’t they be judged according to the performance of their competitors? If you aim high but your “failure” is better than the rest, it’s still something positive.

[twtw]

The Model T is not a competitor.

[saas_co_de]

It really reeks of desperation. They are frantically doing anything they can to keep investor confidence but all of their tricks are so worn out and tired now and their debt load and burn rate is so much higher that it isn't going to change anything.

They will go bankrupt. 100%. Maybe they can arrange some buy out or merger to try and save face, but doubtful.

Given their level of candor I am sure their accounting is an Enron style sh-t-show of epic proportions.

That is almost certainly why they had to buy SolarCity. Other than paying off Musk and SpaceX loans they also couldn't afford to have the books opened in bankruptcy court because it would destroy Musk's reputation.

It is coming though.

[dmode]

I have been hearing this bankruptcy coming for the last 7 years. Yet, Tesla keeps delivering. I remember when the Model X production started, people had already written the obituary because of quality issues. The key thing to note is that Tesla's demand far outstrips supply and Tesla's customer satisfaction rate is over 90%. They can raise any amount of liquidity with those numbers.

[saas_co_de]

> They can raise any amount of liquidity with those numbers.

7.5% bond yield says no.

> I have been hearing this bankruptcy coming for the last 7 years

Yes, the anticipation makes it even sweeter. :)

But seriously, they have been loosing money non-stop and at progressively higher rates for those entire 7 years, so what do you think is going to happen?

[mjamesaustin]

If you're 100% sure, then you should dump your life savings into shorting Tesla. You'll make a fortune.

[adventured]

Their critics are very loudly proclaiming Tesla is an immense failure, that the Model 3 is a failure, and that they're going bankrupt in a matter of months. The FUD being broadly directed at Tesla is astounding and reeks of bias of one sort or another.

The other major automakers are running years behind where Tesla is at today. That's where the embarrassment should be today: those automakers are still gleefully selling tens of millions of fossil-fuel-only vehicles.

Producing 20,000 Model 3 vehicles per quarter this year will be an accomplishment (even in spite of Musk's absurd prior goal). It implies they can push well over 100,000 units in 2019. These days they're being given little credit for what they are accomplishing. When they hit that 20,000 quarterly marker, the Model 3 becomes one of the best selling mid-priced luxury vehicles on the planet in its first year.

[danso]

How are the other makers "years behind" Tesla? The Model S is the best-selling EV but not by an order of magnitude. GM was pretty close last year in sales and I don't think it's a bad bet to bet that GM will beat Tesla in getting self-driving tech (GM Cruise is only second to Waymo in testing self-driving, at least in California).

https://www.fool.com/investing/2017/12/30/the-5-best-selling...

https://www.theverge.com/2018/1/31/16956902/california-dmv-s...

Tesla deserves credit for getting other automakers to take the EV market seriously, but they are by no means years behind Tesla in terms of production and sales.

[Robotbeat]

Nah, I think the other EV manufacturers ARE years behind Tesla. They shouldn't be, either. The Leaf could be charging at >100kW with 250 mile range and selling like hot cakes, too, but they marketed it as a long range golf cart and were way too incremental and conservative with the battery (although they did seem to address their early problems that stemmed from not properly cooling the battery like Tesla & GM do). And they never built out their charging network like Tesla has.

For self-driving, though, Waymo seems to have the edge right now for near-full-autonomy. Tesla's system is really much more like a really-fancy adaptive cruise control right now. But if Tesla gave them LIDARs (currently expensive, but may become cheap enough for Tesla to just add-on) and made them drive like grandmas (like Waymo) around well-mapped, dry locations, then they likely would be in the same ballpark. Which isn't to demean Waymo's impressive efforts at all.

[adventured]

Using one example to represent the industry is the issue in your premise. This list nicely proves my point:

How many EVs is Volkswagen selling per year?

How many EVs is Subaru selling per year?

How many EVs is Fiat selling per year?

How many EVs is Ferrari selling per year?

How many EVs is Daimler selling per year?

How many EVs is Ford selling per year?

How many EVs is PSA selling per year?

How many EVs is Hyundai Kia selling per year?

How many EVs is Mazda selling per year?

How many EVs is Suzuki selling per year?

Tesla is in fact still embarrassing the auto industry and selling EVs by an order of magnitude beyond what nearly all of the major auto companies are. The above listed companies are selling millions of fossil-fuel vehicles and should be heckled aggressively for it.

The fact that so few major automakers are selling EVs at all, demonstrates that what I've said is correct.

But hey, all these fossil-fuel makers have great plans for the future. One day soon.

The question is: how come those companies aren't being bankrupted for the horrific products they're producing by the millions? Where's the FUD attack on those corporations (which would actually be useful in dramatically improving the world)? Priorities are entirely screwed up when its the EV maker getting smacked around for not selling enough EVs.

[jacquesm]

VW: 350 e-Golfs / week

Nissan has delivered 300K leafs (why did you leave them out?).

Chevvy sells about 20K volts / year.

Lots more data here: https://insideevs.com/monthly-plug-in-sales-scorecard/

The companies you list are selling millions of fossil-fuel vehicles because that's their business: selling cars. And as long as they can continue to do so profitably they will do so.

And whether or not Ferrari makes fossil fuel cars or not is immaterial, the numbers aren't there.

Fiat has an electric car but they are not turning a profit on it (it is priced very low, and they still can't sell them).

So does Renault, they too make electric cars, and have been doing so for quite a while.

[nopriorarrests]

>Tesla is in fact still embarrassing the auto industry and >selling EVs by an order of magnitude beyond what nearly >all of the major auto companies are.

Um, no.

"November was another good month for GM’s Chevy Bolt EV US sales. The electric vehicle hit a new record with almost 3,000 units sold in one month – bringing the total to over 20,000 units to date". [0]

Of course total Tesla sales are higher than 20K units, but if we are talking about EV cars in mass segment, Tesla is being outsold at this moment.

[0] https://electrek.co/2017/12/01/chevy-bolt-ev-us-sales-record...

[maxerickson]

Multiple automakers have good enough electric drivetrains to really shorten the time Tesla has to fix their production volume and fit & finish issues. If they don't execute this year their decade of brand building is not going to amount to a whole lot (maybe they have until midway through next year?).

The other automakers aren't pairing the drivetrains with big expensive batteries, so they aren't selling them with big expensive batteries, but there's also only so much consumer demand for $45,000+ electric vehicles.

[Fins]

And how many EVs would Tesla be selling without heavy subsidies and a Musk effect?

Besides, selling a car of Tesla's quality would be embarassing to every company on your list. Well, maybe not Suzuki, but probably to them, too.

[toomuchtodo]

All automakers receive EV subsidies. Why are non-Tesla automakers so bad at building EVs if they receive the same subsidy Tesla does?

[Fins]

Tesla's are the largest, though, since they have largest batteries.

Tesla builds EVs, that's the only thing they sort of can do (of course they can't actually build them at profit, but that's a problem for Tesla's shareholders). Others will build EVs when they can be profitably sold, because it isn't their only business.

[adventured]

https://www.consumerreports.org/car-reliability-owner-satisf...

Tesla in fact ranks with Acura on quality, above Volvo, and just below Volkswagen and Ford.

The low rating on Mercedes should be pretty embarrassing for them, they're merely one quality notch above Tesla and comparable to Ford.

[jacquesm]

Those rankings are pretty fishy. Acura is just a rebadged Honda and they rate completely different. Also Kia and Hyundai rate higher than Mercedes, Porsche and Volkswagen, which is completely against my experience with those brands.

FWIW it has Tesla scoring near the bottom of the pack with 37 points out of a possible 100, with the lowest entrant scoring 26 points.

Volvo is surprisingly low on that ranking, I know they are now owned by Geely but their brand still has 'super reliable' as an image here in Europe which again contradicts the ratings.

I'm not sure what the inputs were and what definition of reliability they have but I'm definitely interested in finding out more.

The FAQ is here:

https://www.consumerreports.org/car-reliability-owner-satisf...

And I suspect that one reason more expensive vehicles drop like a stone on the report is because they are more complex and so there is simply more that can break, on top of that a person that pays $100K for their car is more likely to be dissatisfied when something isn't working perfectly.

You'll never hear a Kia owner complain about some detailing, but if you paid $85K for a Tesla then you would expect a certain level of quality and you'd be more likely to go back to the dealer for that reason alone if what was delivered wasn't perfect. So this report is as much about expectations and brands as it is about actual reliability.

My own - super simple - method of determining vehicle reliability is to look at second hand car website and to sort by descending mileage in yearly cohorts. That very quickly shows which cars are solid and which aren't. Yes, it is 'survivorship bias', but you can discount for that by weighing by the original number of vehicles sold of a particular model.

[bluGill]

That is owner satisfaction, which means nothing. It is common for that list to have a car to have a significantly different rating depending on what the logo on the hood it. If the car has the GM brand it will be rated lower than if it has the Toyota brand, even though the car is EXACTLY the some other than the brand.

[Someone1234]

> Their critics are very loudly proclaiming Tesla is an immense failure, that the Model 3 is a failure, and that they're going bankrupt in a matter of months.

This is a classic straw man. You've created a fictional persona which you then describe as:

> The FUD being broadly directed at Tesla is astounding and reeks of bias of one sort or another.

How about we stick to what other posters you're replying to are actually saying rather than creating fictional personas in order to then attack them.

[adventured]

I wasn't attacking the parent or implying that was their bias.

I intentionally structured the response as a point about the extremely wide-spread criticism being directed at Tesla.

This: "The FUD being broadly directed at Tesla"

I inserted "broadly" for exactly that reason. I also intentionally avoided using "you" or similar (re-read what i actually wrote, you should instantly notice my reply is clearly not targeting the parent just based on what words I use), so as to hopefully avoid leading anyone to think I was claiming the parent was the source of that FUD.

[nopriorarrests]

I don't know what you are talking about re:FUD.

I'm neutral on Tesla both emotionally and financially and have no skin in this game, but I can say that TSLA bears have a very compelling case on their hands, with numbers, future projections, industry comparisons, etc. It's not often bear position is so well reasoned. In fact, TSLA bulls are much more often "selling the dream".

[MadcapJake]

I would agree with the parent, as a laymen casually observing HN and the major news outlets this is really what it feels like, a complete shift in news/commentator opinions of Tesla.

[elvirs]

they are given a ton of credit. their stock value was a good proof of how much credit they were given but you can't keep being late and not delivering on promises to hundreds of thousands of customers who made deposits while the CEO is busy building flamethrowers amd hats to sell them on twitter

[pavs]

In case there is any confusion, Musk is not actually building flamethrowers and hats in person. His time is as wasted as saying "yes" to this ideas. Which is to say that not much at all.

[cheerioty]

I'm pretty sure those are his ideas ;)

[dahdum]

I tend to think Tesla benefits far more from hype and Elon charisma than is being hurt by FUD. There are still many real risks to their success, from outright failure to middling future sales. It wouldn't be shocking to see them eventually exit sales and license their tech / batteries to major automakers down the road as the major revenue stream.

All that said, their fanciful production plans can't hold much weight with institutional investors after so many misses, so it should be priced into the market.

[Fins]

Calling Model 3 a luxury vehicle is rather a stretch. Even Model S lacks things Hyundai one third the price has.

While no other company can come close to Tesla in selling half-baked (or altogether nonexistent) stuff to the gullible, packaging Panasonic batteries in an overpriced golf cart isn't something that any company that knows how to actually build cars would be particularly concerned about.

[dmode]

Lol, I have a Hyundai and a Model S. What you wrote makes zero sense

[Fins]

So... your model S has cooled seats? Tesla doesn't offer them now (and apparently they didn't work when they did). My wife's Sonata has them, and they work.

Not even talking about stuff that is to be expected in a $70K+ car, Tesla doesn't quite compete with a $30K econobrand when it comes to creature comforts.

[dmode]

Let's see. My Hyundai doesn't offer any kind of Autopilot features or advanced safety features. My Hyundai doesn't get monthly software updates that improves the car every month. My Hyundai doesn't have a world wide supercharger network to take long trips for free. My Hyundai doesn't have advanced voice features that are constantly improving. Doesn't have natively integrated streaming and podcasts app that can be controlled with voice. Doesn't have integrated Google search with voice command. Doesn't have an AI driven climate preconditioning. Doesn't have a simple UI to maintain separate driver profiles. Doesnt have an interface to customize a myriad of settings. This is just a start. I can keep going

[Fins]

Let me guess... it is a 10 years old Elantra?

Let's see... my wife's Hyundai does have adaptive cruise control that actually works and does not try to kill her, it has line assist that works as well, it does not get some buggy and unexpected changes in behavior that make it work worse than before. It can actually drive from San Jose to Vegas non-stop without sitting for a couple of hours in the exciting world of Kettleman City's Supercharger station. It integrates with whatever podcast/streaming app she has on the phone, got integrated Google search with voice control, has a perfectly working AC system (and what the hell is an AI driven climate control anyway? Does that come with little Elon's waving fans around your head or something?).

Oh, did I mention that it does not try to kill her? And cools our butts when it is hot outside? And that the body panels actually fit? All of that in a cheap brand for $40K less than a Tesla. For the kind of money you paid, I expect massaging seats, rear seat recliners, maybe even safety better than that of an old Kia.

Sorry. Not being very impressed here.