Tesla’s customers in China could be receiving their Model 3s as early as March or April, according to hot news today from a little blue bird. Tesla is continuing to ramp up its supply chain teams in preparation for the Model 3 launch abroad, and CEO Elon Musk noted that there could be a few deliveries to China in March, but that April was more certain.
Probably some deliveries in March, but April is more certain
— Elon Musk (@elonmusk) November 15, 2018
Image via Vincent
The news comes as Tesla shares more info on how it is ironing out the kinks in its delivery systems around the world. The delivery system was one of the weak links in the chain in the third quarter as Tesla pushed all of its employees and systems to the brink to maximize Model 3 deliveries to customers — in a push that would lead it to its first profitable quarter in years.
Thankfully, Tesla only had to optimize deliveries of the higher volume to North American customers at that time. Future quarters present new challenges. The company is now leaning into the improvements its global supply chains will need in order to support a similar ramp in the first quarter of 2019 across the world. For Model S and X vehicles heading off to their European customers, Tesla currently ships the vehicles in a partially assembled state and performs final assembly and delivery preparation at its Tilburg factory in the Netherlands.
The company is building a new strategy to support overseas deliveries of its vehicles moving forward, with plans already in place for dedicated roll-on, roll-off fast ships for transporting cars to both Europe and Asia. “Will also be using dedicated roll-on, roll-off fast ships for transporting cars to Europe & Asia in Q1. Major focus on minimizing time from factory to new owner,” Musk said. “Did not fully appreciate the working capital impact until recently.”
The improvement will further optimize the non-value-add costs buried in Tesla’s existing delivery process — namely, Tesla will reduce the number of days the company has inventory (cash) tied up in transit while also eliminating the need for a final assembly factory upon arrival.
So, speculation that Tesla could actually reverse this trend and ship partially assembled vehicles to overseas customers as a means of skirting new tariffs on American vehicles arriving in China can now been put to rest.
The long-term strategy is clearly to step on the accelerator for the construction timeline of its Shanghai Gigafactory, which is expected to produce its first vehicles in 2020 — starting with Model 3 and the yet to be unveiled Model Y.
Until then, fleets of Tesla’s Model X vehicles are being set up to flaunt their mastery over all other vehicles in spectacular fashion.
Tesla style. pic.twitter.com/dvhcy4iTXu
— Starman Ben (@Starman_Ben) November 14, 2018
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