Suppliers question Tesla’s goals for Model 3 output

[ExFreeper]

Exclusive: Suppliers question Tesla’s goals for Model 3 output

Reuters - By Paul Lienert and Alexandria Sage - May 20, 2016


http://www.youtube.com/watch?v=Q4VGQPk2Dl8

Tesla Motors Inc has surprised parts makers with plans to move up the launch of high-volume production of its Model 3 to 2018, two years earlier than planned – an acceleration that supplier executives and industry consultants said would be difficult to achieve and potentially costly.

In the past three months, Tesla <TSLA.O> has told suppliers the company was doubling its original production projections to 100,000 Model 3s in 2017 and 400,000 in 2018, several supplier industry executives familiar with the plans told Reuters.

Details on Model 3 production projections have not been reported previously, and Tesla did not break out target volumes for the Model 3.

Tesla has taken 373,000 orders for the Model 3 – which has a starting price of $35,000, about half its Model S – and has said it would begin customer deliveries in late 2017. But it has made no promises, and, on earlier models, customers waited months for delivery.

Citing “tremendous demand,” Chief Executive Elon Musk told analysts on an April call that the company planned to boost total production, including the existing Model S and Model X crossover, to 500,000 in 2018 – two years earlier than its original target and a 10-fold increase over the 50,000 vehicles it made in 2015...

Tesla says the Model 3 features 6,000 to 7,000 unique components, fewer than the typical automobile with a combustion engine and the Model S, which has more than 8,000 parts.

The company still is soliciting bids for parts and machinery, according to representatives from several of companies that have received them, as well as industry consultants who monitor such bids.

Automaking consultant Ron Harbour of Oliver Wyman said increasing production at the Fremont plant to 500,000 vehicles in 2018 would require more stamping, welding and assembly machinery that “could take up to 18 months to order and install.”

He said Musk’s plan to make parts in-house can minimize risk, but it also can be more expensive and distracting...

Tesla may pay a premium for work to speed up the Model 3 production launch, supplier executives said. The company has increased its 2016 capital spending forecast by 50 percent to about $2.25 billion.

On Wednesday, Tesla announced it would sell up to $1.7 billion in new common shares, in part to pay for machinery and engineering for the Model 3.

“I’d be really surprised if he can launch production by next July,” said Frank Faga, a Detroit-based auto manufacturing consultant. “But this is a guy who says he’s going to Mars. Who am I to say he can’t do this?”

http://www.oann.com/exclusive-suppliers-question-teslas-goals-for-model-3-output/

Related:  https://www.teslamotors.com/model3

[Wingnut]

Tesla has never been able to make money. Neverwill. Any other car company with the financials of Tesla would have been vilified mercilessly by now in the press and the DOJ would be investigating his ponzi scheme operation. The mainstream media has given Saint Elon a free pass. The man is selling unicorn farts and peppermint pipe dreams to a bunch of suckers.  The man make Scam WowT rump look like a piker .

[r9etb]

Tesla has never been able to make money. Neverwill. Any other car company with the financials of Tesla would have been vilified mercilessly by now in the press and the DOJ would be investigating his ponzi scheme operation. The mainstream media has given Saint Elon a free pass. The man is selling unicorn farts and peppermint pipe dreams to a bunch of suckers.  The man make Scam WowT rump look like a piker .

Let's grant that the underlying technologies for Musk's two big ventures (SpaceX and Tesla) are reasonably sound, because he has hired some very smart people to create them. 

Musk's role in these ventures is threefold: rich hobbyist, ardent cheerleader and marketer, and consummate extractor of political money. 

The latter is most important: Musk's business cases are essentially based on political graft. 

Thus, the supposedly private-sector SpaceX, which is unreliable by comparison to its competitors, relies on money from their "low-cost" government launch contracts.  (Low cost being bought at the expense of reliability and launch vehicle Quality Assurance). 

Tesla has relied on government subsidies for its cars and for its batteries, and nobody seems to be asking where the electricity will come from to power these projected millions of cars, which could cause difficulties in, say, California, which is already power-limited.

It's not to say that either or both of these ventures couldn't be profitable; however, neither seems to be truly based on a realistic view of the markets in which they operate -- they depend on government largesse.  The question is, what happens when the government teat runs dry?