Published on March 22nd, 2018 | by Steve Hanley0
Bloomberg’s Tesla Model 3 Production Tracking Tool Shows Stall In Production Growth
March 22nd, 2018 by Steve Hanley
How many Model 3 sedans is Tesla manufacturing each week? That question continues to fascinate the automotive world and the investment community as the end of March approaches. Elon Musk has promised his company will be churning out 2,500 new Model 3s a week by the end of the first quarter of this year. That’s just 8 days from now. Will Tesla hit that target? We asked readers to weigh in on that question last month and got 104 comments. There is never any shortage of opinions where Elon is concerned.
To delve deeper into this question, Bloomberg has constructed its own Model 3 tracker (also referenced in that article above). As of March 22, its analysis shows Tesla is going to fall far short of its goal. Bloomberg estimates the factory is now producing 810 cars a week. That means it must triple production in the next 8 days to meet Musk’s target. That seems unlikely, doesn’t it?
(Note that this crowdsourced Google sheet also doesn’t indicate an increase in the delivery rate in recent weeks.)
So, where does Bloomberg get its numbers? Two ways. Manufacturers register batches of VIN numbers for the cars they expect to produce soon — they are registered with the National Highway Transportation Administration. Bloomberg has accessed that data and extrapolated from the numbers to estimate production. “By sending digital requests to the National Highway Traffic Safety Administration website, we can get a good picture of how many VINs have been registered for Model 3s at any given time. We track the number of VINs between batch registrations and use the number of intervening days to estimate a production rate.”
It also scours social media websites for news about new cars being delivered. Lastly, Model 3 owners can register the VIN number of their new cars directly with Bloomberg. The combined results are probably far from perfect. Only Tesla knows how many cars it is producing at any given time and it only reports that information 4 times a year — right after the end of each quarter. The next report should appear on April 2nd or 3rd.
Why is this so important? Among other things, because Tesla’s stock valuation floats on a cushion of optimism. Elon Musk is masterful at telling a good story. He says Tesla will be the world’s first trillion-dollar company. If you believe him, the company’s current stock price looks like a bargain. If you don’t, it appears grossly inflated. If somehow that bubble of optimism should burst, Tesla’s ability to continue borrowing money to finance ongoing operations could come to a screeching halt.
In reality, whether the company builds 2,500 Model 3s a week now or three months from now is not hugely relevant. More than any other company, it has grabbed the electric car market by the scruff of the neck and dragged it kicking and screaming into the future. If cities and nations are now discussing banning cars with internal combustion engines, it’s because of Tesla. If Volkswagen, Daimler, BMW, GM, and Ford are spending billions to develop electric cars of their own, it’s because of Tesla. If China is mandating most of the cars sold within its borders will be electric within a few years, it’s because of Tesla.
Several thousand or tens of thousands of electric cars hitting the road today versus 3 months from now also has an impact on global warming and air pollution. However, one way or another, the story is that Tesla is trying to get those cars on the road as quickly as it can.
Keeping So Many Balls In The Air
Another reason any of this is important is because Tesla has so many other projects on its plate at the same time — getting the Model Y into production, building the Tesla Semi and the second-generation Roadster, completing the Supercharger network, boring tunnels underground, and creating electric passenger shuttles. Keeping all those balls in the air relies on a steady stream of warm breezes from the mouth of Musk.
Elon is a victim of his own success. He has to make grand pronouncements and bold predictions to keep the machine going. But then he gets hoist on his own petard, as it were, when it comes time to make good on his forecasts. Will his charmed life be shipwrecked on the rocks of reality? If the Q1 production numbers are disappointing, we may get the answer to that question.