There’s been some hype this week that Tesla Model 3 production may finally be ramping up. The reason? A bunch of Tesla Model 3 customer cars were spotted at the factory apparently ready for delivery. But there’s still plenty of reason to stay in your seat and hold the cheers for a future month.
[Update] See the latest news:
I’ll admit it — I’ve gotten excited about potential production ramps in the past based on limited and anecdotal evidence. For example, when we got word from a SpaceX employee that his/her delivery might occur in September instead of October–December (based on what his/her sales advisor told him/her), I was hopeful that the production process was going better than expected. But then — boom — Tesla hit a bottleneck.
That was all a while ago, and it’s more or less been silence from the Tesla concert grounds since then (well, aside from some rockin’ and rollin’ about a prototype Semi and Roadster 2.0). The silence has made many of us nervous. The scale of nervousness ranges from freakin’ the funk out to mild impatience as we sit through Boring hat news rather than Tesla Model 3 news.
So, yes, any sign of life on the Model 3 delivery deck is bound to get people excited. Unfortunately, in this case, I actually agree with the take of a Tesla short on Seeking Alpha. (I never expected that to happen!) I’m sure we don’t agree on plenty of fundamentals regarding the company and what this production delay means for Tesla in the long term, but the writer makes several valid points.
There’s long been expectation of some 15,000–30,000 Model 3 deliveries by the end of 2017 (unless the production ramp got pushed back beyond December 31, 2017, as Elon Musk always cautioned it might). Needless to say, with little buzz about new deliveries and production ramping up, even the low end of that figure looks highly unlikely. That’s a reality we have to accept and swallow. (Yes, I’ll be quick to spit that reality back out and write an endorphin-fused article here on CleanTechnica if Tesla’s Q4 2017 delivery numbers — which will be published just after the turn of the year — end up reaching 15,000+.)
One sign of trouble popped up in late October. As we wrote a month and a half ago, it was leaked that Tesla had significantly cut December orders from one of its suppliers. In response, Tesla put out a goal of reaching “a production rate of 5,000 Model 3 vehicles per week by late Q1 2018” (instead of late 2017).
Since then, there have been a couple of bursts of optimism as normal customers (not just Tesla/SpaceX employees) started getting invites to configure their cars in the Tesla Design Studio. However, the Seeking Alpha writer highlights that crowdsourced info on the Tesla Motors Club forum implies that just a couple of batches of invites have gone out in the past month. Perhaps those invites are a sign that Tesla has worked through one bottleneck and is eager to test out the production process for a larger and broader batch of customers, but it shows no sign of an explosion in production. (And, by the way, I still don’t have my invite to configure yet.)
[Update: Soon after writing this — the same day — another batch of Tesla invites apparently went out.]
Just to clarify, these “normal customers” who got the invites to configure were all previous Tesla owners as far as we’ve seen.
Regarding those Tesla Model 3 customer cars spotted at the factory this week, the Seeking Alpha writer makes a simple but important note: “But the most interesting part in the data in the Excel sheet* is this: Not a single invitee among those 114 invited to configure have received their cars!” In other words, perhaps
several hundred or even 1,000+ thousands of non-Tesla/SpaceX people got invited to configure in the past month, but it seems that none of them have received their cars yet. I’m going to assume this batch of cars sitting in a Tesla parking lot is primarily for this batch of orders.
What does all of this mean about getting to the real production ramp in which Tesla is pumping out thousands of Model 3 rock stars a month and then thousands of them each week? Who knows? That depends on battery production bottlenecks and other potential bottlenecks that we don’t see. But it seems that working through this batch of Tesla-owning Tesla Model 3 reservations is at least one positive step, even if it’s not at all a sign that Tesla has made it through “production hell.”
As one final note, however, there’s a downer that was not mentioned by the Tesla short. It’s worth remembering that Tesla works hard to get as many cars out the door as possible before the end of the year (every year). That probably helps Tesla’s taxes; it makes Tesla’s financial reports look better; and it helps customers who need to register the cars before the first of the year in order to be eligible for the $7,500 federal tax credit for zero-emissions vehicles. The pressure must really be on this year since Republicans in Congress might kill this tax credit. Tesla could help a lot of people out by getting their Model 3s into their hands by December 31 and fixing/finalizing any final items after the turn of the year. With that being the story, I’d say the fact that thousands of Model 3 shipments haven’t been made already is not a super optimistic sign of where the production process stands.
Note: If you want a $1,000/€1,000 discount on a new Tesla Model S or Model X, feel free to use our discount code: http://ts.la/tomasz7234.
*Side note: It’s a Google Sheet, not an Excel sheet, but whatev.
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