garsh
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Re: TSLA corporate outlook

Fri May 05, 2017 3:23 am

GetOffYourGas wrote:Depends on what they find during testing. Tesla decided to skip "soft tooling", which could be a costly gamble if they need to make significant changes. But it could pay off in spades if they don't. We'll know soon enough.
It sounds like they skipped soft tooling because it caused as many problems as it solved during Model X production ramp-up.

Plus, they feel that they can more quickly get tooling issues fixed since they bought their own tooling company (Riviera Tool in Michigan).
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GetOffYourGas
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Re: TSLA corporate outlook

Fri May 05, 2017 5:10 am

garsh wrote:
GetOffYourGas wrote:Depends on what they find during testing. Tesla decided to skip "soft tooling", which could be a costly gamble if they need to make significant changes. But it could pay off in spades if they don't. We'll know soon enough.
It sounds like they skipped soft tooling because it caused as many problems as it solved during Model X production ramp-up.

Plus, they feel that they can more quickly get tooling issues fixed since they bought their own tooling company (Riviera Tool in Michigan).


Either way, skipping this step is a gamble. If testing goes well, and no major changes are required, it will greatly accelerate production. If testing finds something that requires retooling to fix, it will cause large delays and costs.
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LTLFTcomposite
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Re: TSLA corporate outlook

Fri May 05, 2017 5:54 am

What does this tooling pertain to? Mostly stampings?
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Re: TSLA corporate outlook

Fri May 05, 2017 7:22 am

Everything is tooled. The whole gigafactory is "the machine that builds the machine". There could certainly be last-minute design changes which require new tools and/or don't require some that are already purchased/installed. I have no inside information to Tesla's operations, but I have worked on transitioning prototypes to production. I've been surprised at how seemingly minor changes can cascade into sweeping changes on the production floor.
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mtndrew1
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Re: TSLA corporate outlook

Fri May 05, 2017 12:32 pm

Here is a good article about virtual assembly and finding flaws before final assembly begins.

https://arstechnica.com/cars/2016/09/virtual-assembly-lines-are-making-the-auto-industry-more-flexible/

My favorite example is this: '"We found through CAD and a fluid dynamics software program that the actual shape of the grille holes created a pressure and flow drop from the specification." The team knew that flow spec was required for the vehicle's main and peripheral (transmission and oil) cooling systems. They literally had an airflow problem.

But rather than stop the pre-production schedule just ahead of the vehicle's launch, the team was quickly able to modify the shape and radius of the holes in the grille until reaching the designers' own self-imposed cubic feet per minute flow rate on the back side of that grille.'

Of course this is Toyota with decades of experience in identifying and solving automotive problems. In the past that grille would have been soft-tooled, road tested, then when the vehicle overheated it would have been redesigned before tooling capable of running off a million copies of the part was finalized. This example allowed them to skip the road testing step and go straight to hard tooling.

If Tesla did this well it would be a huge cost and time savings. If they missed something they only catch in the "release candidate" Model 3s running around in the real world it will be a monumental problem as some very expensive tooling will need to be scrapped and replaced before proceeding.
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Re: TSLA corporate outlook

Sun May 07, 2017 1:46 pm

The reports below summarize the TSLA Q1 results and conference call:

Looking at the numbers, as TSLA has mastered only the easy part of building cars, huge losses continue:

Tesla has to turn potential into real profits

YIKES! TESLA'S PER-VEHICLE PROFIT IS NEGATIVE $15,855


General Motors earned an operating profit of $1,418 for every vehicle it sold around the world in the first quarter. Ford Motor Co. earned a little less: $1,174.

Tesla, by the same calculation, is in a whole different league, and not in a good way. Its per-vehicle profit comes in at minus-$15,855.

For every car Tesla sold, it lost more than a year’s pay at a minimum-wage job...

Yes, that’s an eye-popping figure, and one that’s not sustainable for a company that wants to be in business for very long.

But no, that’s not, on its own, a fair assessment of Tesla, an automaker that’s essentially still in its infancy.

Still, they’re numbers worth looking at and writing about here. Because they do show an inescapable truth about the auto industry: It’s easy to lose huge amounts of money building and selling cars, but it’s hard to eke out profit margins that would be laughed at in most other industries...

http://autoweek.com/article/green-cars/ ... al-profits

Will the next TSLA product reverse these losses?

Hard to see how TSLA will make significant profits soon by entering the commodity market segment that produces the lowest (or negative) margins for its competitors with the model 3 sedan, and by suggesting the new model Y platform is still years away from production:

Tesla Desperately Needs a Crossover Hit

...Under Musk's leadership, Tesla has produced a series of undeniably desirable vehicles that helped it briefly become, on paper anyway, the most valuable automaker in the nation. But is has rolled these cars out in a frantic, iterative, inefficient and nonstrategic manner that shows why mainstream automakers tend to be run by "bean counters" rather than creative visionaries.

Nothing illustrates this dynamic quite like Tesla's crossovers, the Model X and the forthcoming Model Y. Crossovers are unsexy but highly pragmatic machines that are critical to profitability in the modern car business. With Musk revealing that the Model Y will not share a platform with the mass-market Model 3 sedan, as most analysts had expected, it's becoming clear that the firm still hasn't appreciated basic logic of the crossover market. As Tesla moves into the lower-margin mass market and comes under increasing pressure to show profitability, this unexciting but important lesson will have to be learned.

Decades of tough competition have eroded profit margins on sedans, turning the bulk of the car business's production volume into a commodity product. The industry's answer has been to build roomier, more capable crossovers using the platforms, drive-trains and other internal gubbins from their sedans, thus spreading the development costs of these shared components over more volume and improving margins. ...

Musk's most recent comments about the next-generation Model Y suggest that the company still has not learned the critical crossover lesson. Rather than making a small investment in a new, more spacious crossover body for the Model 3 and charging customers more for it, Musk confirmed that Tesla is developing an entirely new platform for the Model Y.

This means that instead of spreading the Model 3's fixed development costs across more, higher-margin vehicles, Tesla will sink tens (if not hundreds) of millions of dollars into a bespoke platform for its second crossover. For a small-scale automaker, lacking the efficiencies of scale enjoyed by its established manufacturers, Tesla's decision to develop four platforms for its first five vehicles is all but incomprehensible...

https://www.bloomberg.com/view/articles ... ssover-hit

Maybe you just have to be on the right drugs to understand TSLA's business plan...

You have to be on drugs to get Tesla's business

After Tesla's stock sank over $15 on Thursday following its earnings report, Jim Cramer looked into the company to try and understand its high-flown forecasts.

"If you're an analyst, I think the only way to handle an Elon Musk conference call is to take some mind altering drugs so you can really tune in and turn on the whole psychedelic story," the "Mad Money" host said of Tesla's CEO.

While Cramer admires Musk's confidence, he sympathized with those who try to make mathematical sense of his ultra-positive musings.

Watch the full segment here...

http://www.cnbc.com/2017/05/04/cramer-y ... iness.html
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Re: TSLA corporate outlook

Sun May 07, 2017 2:43 pm

Re: Tesla's losses, indeed. I finally finished my spreadsheet computing their cumulative profits and losses, which I can now easily keep updating.

Since they've publicly reported P&Ls, they've accumulated ~$2.9 billion in net losses, including the most recent quarter, where they lost $330 million, attributable to common shareholders. If you go by some of the other figures on page 6 of http://files.shareholder.com/downloads/ ... Letter.pdf, one could argue it was $397 million in loss.

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Re: TSLA corporate outlook

Mon May 08, 2017 5:41 pm

Via IEVS:
Excessive DC Charging Of Tesla Model S, X Leads To Permanently Reduced Charge Rate
http://insideevs.com/excessive-dc-charg ... arge-rate/

. . . Naonak notes that to the best of his knowledge, this is his DC charging breakdown to date:

6,685.603 Energy (kWh)
245 Total Charge Ups

“That does not include Supercharging. You can add probably another 50 – 60 Supercharges to that I would estimate (I can get an exact number at some point, I have records). That number above is 99% CHADeMo charging since March 2016.”

Naonak later posted the actual technical explanation from the Tesla service center after raising his concerns to upper management. Its reads as follows:

    Concern: Customer states: speed of charging at Superchargers is topping out at lower
    speeds then previously observed. This has happened at multiple superchargers recently.

    Pay Type: Goodwill

    Corrections: Supercharger General Diagnosis Conclusion: No Trouble Found
    Review vehicle logs and verify charging is topping out a lower rate than observed on
    earlier DC charging sessions. According Tesla engineers once vehicle has been DC fast
    charged over a specified amount, the battery management system restricts DC charging to
    prevent degradation of the battery pack. According Tesla engineers, this vehicle has seen
    significant DC fast charging and is now has permanently restricted DC charging speeds.
    Important to note, supercharging will always still be available to the vehicle and the battery
    pack has not yet experienced significant degradation due to the amount of DC fast
    charging performed on the pack up until this point in time. Vehicle is operating as
    designed. . . .
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tattoogunman
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Re: TSLA corporate outlook

Tue May 09, 2017 6:04 pm

cwerdna wrote:Re: Tesla's losses, indeed. I finally finished my spreadsheet computing their cumulative profits and losses, which I can now easily keep updating.

Since they've publicly reported P&Ls, they've accumulated ~$2.9 billion in net losses, including the most recent quarter, where they lost $330 million, attributable to common shareholders. If you go by some of the other figures on page 6 of http://files.shareholder.com/downloads/ ... Letter.pdf, one could argue it was $397 million in loss.


And this is why Tesla isn't even on my possibility list when it comes to EV cars. I am not convinced they are going to be around long term as a company with the way they are going. Musk cannot keep throwing money at other ventures and expansions to existing infrastructure without turning a profit eventually. Tesla is either going to rule the world or they are going to be a footnote in history and an interesting company to talk about in college business classes :)

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Re: TSLA corporate outlook

Tue May 09, 2017 6:32 pm

They're not losing money they are investing for the future.
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