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Analyst: Tesla Model 3 Production Can Easily Hit 8,000 Per Week
8 H BY DOMENICK YONEY 37
Yes, Model 3 production is still ramping.
With all the turmoil surrounding the efforts of Tesla CEO Elon Musk to take the company private, the intense scrutiny that production of the Model 3 has been under for months seems to have lapsed a bit. Still, the number of cars coming off the line seems to be continuing to grow even while out of the spotlight, according to an Evercore ISI analyst George Galliers, who just toured the factory.
More on Tesla Model 3 production.
In a note, Galliers said, “Tesla seems well on the way to achieving a steady weekly production rate of 5,000 to 6,000 units per week.” Good news, right? Well, it gets better. He continues,
“We are incrementally positive on Tesla following our visit. We have confidence in their production. We did not see anything to suggest that Model 3 cannot reach 6k units per week, and 7k to 8k with very little incremental capital expenditure.“
The electric automaker had hit a then-record high of 5,000 copies of the mid-sized sedan during the last week of June. Though expectations were that the stock would rise after reaching that threshold, it did not, as many were convinced the output was limited to a one-time all-out effort. It was only later in August, during the financial call with analysts that Musk revealed production had hit that same mark in at least two weeks in July. This, along with other positives from that call, brought share price up significantly ahead of the “going private” tweet that then spurred on a short-lived price spike.
The production goal for the Tesla Model 3 for 2019 is 10,000 units per week. That translates into an annual rate of 520,000 of the all-electric car. By comparison — an imperfect one, since it isn’t sold in Europe — the Toyota Camry moved 462,318 units in the United Staes and China last year, or 8,891 units per week.
Source: CNBC
Categories: Tesla
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37 Comments on "Analyst: Tesla Model 3 Production Can Easily Hit 8,000 Per Week"
If the delivery problems have really been corrected I think Tesla will sell 30,000 TM3’s in the month of August.
They’re working on delivery bottlenecks, but ran into another problem, causing a rash of last minute VIN reassignments. I expect ~15k in August.
My projection for next moth were 14k-17k
I’m going with 10k-30k.
Hehe, I think you are very much within the range.
I see your 14k-17k and raise you 21k.
What problem is that? (not snark, seriously asking)
What problem are you talking about I haven’t heard anything.
Ron M – There are threads on Model 3 Owners Club. There are always random delivery problems, as you’d expect, cars get mis-routed or get scratched in transit and need re-touch. There was a flood of reschedules in mid-July because contracts weren’t ready in time.
In early August people suddenly had delivery times cancelled at the last minute and their assigned VINs disappeared. They got new VIN and new delivery date. This was a something different, and seems to be fixed now. They had some theories (paint problem, etc.) but it was still a bit of a mystery. I read through the thread but didn’t bookmark it.
Just an example of the kind of stuff they’re still running into. They’ll smooth things out soon enough.
Tesla has been delivering more vehicles in the last month of each quarter since the beginning. Musk said at the conference call that he thought this situation has been corrected and that from now on we shouldn’t see the big increases of vehicles in the last month of each quarter.
The last month of each quarter is due to more vehicles being delivered in the US in that month while the first two months of the quarter the production more of the cars might be going out of country (takes longer for them to ship so they ship them early in the quarter out of country so that they can be delivered before the end of quarter).
Model 3 deliveries will be flatter until they start shipping to other countries, then they will do the same thing as the Model S and X. Unless they go private you will continue seeing this.
I also think your confusing a production problem with a delivery problem.
They did not saw that coming ?
Who?
Elon said 50-55k this quarter. That means they average about 18k/mo. So 14,250 in July, maybe 18,000 in Aug and maybe 22,000 in Sep.
I think he was overly optimistic so much up to now I think he may have under promised this time, at least from the production numbers in Bloomberg.
That’s good news on the potential run rate side. The problem is that expansion to 8K/units week is just one of the transitory goals on the way to roughly around 10K/week during full weeks of production (typically 45-50 weeks out of any year for most auto manufacturing assembly lines).
In order to get to their goal of a 10K/week rate, they WILL have to make line changes, Musk and Tesla have been very very clear about this. So even if they hit their target production RATES, just multiplying by weeks in a quarter or year likely won’t give very accurate estimate of sales numbers. What is unknown is how much downtime will be required for those line changes between now and sometime in Q418 or Q119.
Why not add new lines instead of making line changes? Given that they will be making many more cars like Y and more, adding more lines seems better for the future.
Because that increases capital expenditure. Much better to improve flow rate and efficiency on existing lines.
Which is why we should expect the Y to be built on the same line currently building the 3. Wonder if they’ll then convert the tent line to build limited run projects like the Roadster?
I thought they were planning on building a new factory and new line for Y? 10k 3s and 10k Ys at a different factory.
Otherwise it seems like 5k 3s and 5k Ys on the same line that can do 10k vehicles per week.
Expect that as they build more plants, existing lines will build different cars.
The Chinese plant will produce cars for that market and export to other countries cutting demand for Model 3 production at Fremont. This should coincide with introduction of the Model Y, which I expect will be built on GA3 along with the Model 3. Likewise, the Chinese plant will probably build S/X on one line and 3/Y on a separate line. Build a plant in Europe and rinse and repeat.
👍👏👏👏👏
Yes, the plan is definitely for their Chinese plant (hiring already underway for construction) is to deliver to Pacific Rim markets, a European plant for the EU and surrounding markets.
Model Y mass production for the US market is still a mystery.
Should we really expect the Chinese factory to export to other markets? That would require the Chinese variant to be built using exactly the same technology as the international one — which would probably make them ineligible for Chinese subsidies, thus putting them at a major disadvantage… I wouldn’t be surprised if the Chinese factory builds a modified variant (using Chinese batteries), that they won’t sell in other markets — just like most other global makers are doing with EVs for the Chinese market…
No, Tesla’s Master Plan Part Deux calls for gigafactories in China and Europe so cars don’t have to be shipped accross ponds and get tagged with additional tarrifs.
EDIT: oops!! name typo! should be nix. Can’t fix
Line changes are standard for the industry. Most every company schedules downtime for line updates. Typically in the summer as they prepare for changing over to a new model year. Building a complete new line just to update a line is not industry standard practice.
Ok fine but Tesla has enough model 3 demand for the next several years to justify its own line let alone the mass production of the perhaps just as popular model Y to come next decade. I say Tesla goes big, with production capacity, to dominate the bev market in the states and most other areas of the world for many years to come.
Gotta charge much more for the model Y though….maybe $45K for base model
The lines are far from optimal now. Building more lines without fixing the production problems is a waste. They expect to work out the problems in the next couple of months. If they can do that, then when time comes for the Y, they can expand capacity at a better profit margin (at other plants ;-).
Prod number really won’t mean anything till the delivery bottleneck is corrected.
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$35,000 Model 3 now?
Q1 2019
Q1 2019 is SR battery, not $35k. Will almost certainly have premium package. AWD should be available, too.
Unfortunately/fortunately the demand for the expensive is high enough to postpone the budget model. If the could sell 10k of the $50k Model 3’s ever week, why would they bother with the $35k version. Either way, it’s the same number of dinosaur burners not being bought.
I am genuinely curious as to why anyone thinks the market will support 520,000 Model 3 sales annually (on a global scale). There just isn’t enough demand for small sedans, much less EVs, to keep that going. Once the early adopters have their cars, I think Model 3 sales are going to slow substantially. This isn’t mean to be an attack on Tesla or the Model 3, just a frank assessment of the auto industry. If Tesla can actually sustain more than 300,000 annual sales of the Model 3 a few years down the road THAT would be legendary.
Please research how many “Small sedans” BMW sells worldwide. There is easily a global demand of that many premium sedans.
Has Tesla sustained their production of 5000 cars a week since the end of June?