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posted by CoolHand on Thursday November 02 2017, @10:34PM   Printer-friendly
from the elon-watchers dept.

Auto production is hard:

Having racked up its first quarter of burning through more than $1 billion of cash in the three months ending in June, Tesla topped that with $1.4 billion of negative free cash flow in the third quarter. In the past two quarters, therefore, Tesla has burned through more cash than the previous six combined. More importantly, it has burned through roughly four out of every five of the $3.2 billion dollars it has raised since late March through selling new equity and convertible debt and its debut in the high-yield bond market.

Consequently, debt has soared. Even just using debt with recourse to the company, on a net basis it has almost tripled since the start of the year to $3.36 billion.This would matter less if the primary objective of sucking in most of that external funding -- mass production of the Model 3 -- was fast approaching. Instead, it has receded further.

When Musk first talked about production targets for the Model 3 in 2016, they implied Tesla would be producing roughly 3,800 to 7,600 a week in the second half of 2017. By July of this year, Musk was guiding toward production hitting about 5,000 a week by the end of December. I estimated at the time that this implied a second-half average of maybe 1,400 a week.

Now, Musk estimates production might hit 5,000 a week by the end of the first quarter of 2018. As for this year, it might be in "the thousands" by the time New Year's Eve rolls around. He refused to say what the current run rate was. But I would estimate Tesla will be lucky to produce 10,000 Model 3 vehicles in total this year, or an average of 400 a week for the second half -- roughly 5 to 10 percent of the original guidance. As for the earlier target of 10,000 a week in 2018 ...

Also at NYT and MarketWatch.

Previously: Tesla Adds Lots of Certified Pre-Owned Model S Vehicles for Under $40,000 with New Warranty
Time to Bash Tesla Model 3
Tesla Reportedly Teaming Up With AMD for Custom AI Chip
Tesla Fires Hundreds of Employees

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  • (Score: 2) by FatPhil on Friday November 03 2017, @01:07AM (10 children)

    by FatPhil (863) <> on Friday November 03 2017, @01:07AM (#591456) Homepage
    That's not intrinsically a bad thing, it just means you need to invest in improving how you supply, which is what they are doing. If you're cash rich, sure, burn that cash, better to use it all than pay tax on profit distribution. I've seen a lot of anti-Testa news recently, and it all looks lke it's written by someone with shares in F. Were Tesla producing more cars than they could sell, there would be negative remarks made about that state of affairs too - Tesla literally cannot win.

    Of course, Tesla need to pick up production before China dominates the EV market, which will happen RSN. If they're good, they'll corner the market, and if they explode they might even destroy the market (or at least set it back a decade, as consumer safety legislation is written and rewritten).
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  • (Score: 0) by Anonymous Coward on Friday November 03 2017, @01:18AM (9 children)

    by Anonymous Coward on Friday November 03 2017, @01:18AM (#591459)

    Very good chance that Chinese companies will dominate the electric car market in China -- with gov't help on all fronts. In part, this is a quick way to do something about the terrible air quality in some of their cities.

    Other than Tesla at the luxury car price point, where is the electric car market in USA? There are models from other companies (including Bolt which is on par with Model 3 in some respects). None are selling well outside a few areas (like Silicon Valley) and the resale value for electric cars (like Leaf) coming off a 3-year lease is terrible. Is it possible that the hype for "electric car future" is just hype?

    One scenario not often mentioned is a regional power outage, as happened recently in the New England states. From a wind storm, a friend outside Burlington VT lost power for 5 days. He has a hybrid, but would have been stuck out of juice fairly soon if that was a full electric car.

    • (Score: 4, Interesting) by Grishnakh on Friday November 03 2017, @01:31AM (7 children)

      by Grishnakh (2831) on Friday November 03 2017, @01:31AM (#591466)

      The days of solely-fossil-fuel-powered are very, very limited now. There's just too many problems with them. But you have a point with all-electric cars being vulnerable to power outages. But this isn't something unique to electric cars: gas cars have the same problem to a degree. They're dependent on gasoline supply, and if there's a disruption there, transportation is hit hard. This happened in Phoenix about 6 years ago I think: the main pipeline supplying the city had some problem, and there was no new fuel for a week IIRC. So of course prices jumped. Luckily, gas cars can hold a fair amount in their tanks, so you can stop driving so much and avoid the price gouging and long lines maybe. But you can do the same with EVs, though the caveat there is that you can't easily transfer stored energy between EVs, keep it in a spare tank in your garage, etc.

      I think we're going to see more and more uptake of EVs among dual-car households in urban/suburban areas, as they make a ton of sense for commuters who can have a second gas car, and I think we're going to see more penetration of hybrids; it's just slow because hybrids cost more since they have two powertrains effectively.

      • (Score: 1) by khallow on Friday November 03 2017, @02:01AM (6 children)

        by khallow (3766) Subscriber Badge on Friday November 03 2017, @02:01AM (#591484) Journal
        The problem is that electricity outages are more common and with the lower range of electric vehicles, don't have to last as long to cause problems.

        For example, in Yellowstone National Park, we have a pretty shifty grid. It's all above ground and bad weather routinely plays havoc with it. For example, twice this year, once in late May and once in October, we had substantial snow storms that shut down the entire park road system and knocked out power for at least a day (two days for the springtime outage). Imagine if the snow plows were electric powered? Where are you going to recharge them (much less run backup power for the lodging infrastructure in the park), if you get rid of fossil fuels?

        During the past nine years I've been in the park, we've only had one genuine gasoline outage. One year was really heavy on the snowfall and it collapsed the gas station canopy over the pumps, taking that gas station out of action for the first half of the season. The rest of time, if you have trouble with gasoline supply, then send another truck. And if your gas truck can't get through, then neither can any other vehicles, which would need gas.
        • (Score: 0) by Anonymous Coward on Friday November 03 2017, @03:42AM (3 children)

          by Anonymous Coward on Friday November 03 2017, @03:42AM (#591521)

          > The problem is that electricity outages are more common and with the lower range of electric vehicles, don't have to last as long to cause problems.

          Also takes longer to recover from:
          * If you have enough juice to get your e-car to power, then you have to spend time there while it charges. The first ring of working charging stations (outside the area with the outage) will be heavily oversubscribed.
          * When power is restored, everyone is going to hop on the grid to recharge...and bring down the grid(??) It's going to be awhile before the grid (and individual users) is smart enough to avoid this (and those denied charging for a period are going to complain).

          • (Score: 0) by Anonymous Coward on Friday November 03 2017, @08:17AM (2 children)

            by Anonymous Coward on Friday November 03 2017, @08:17AM (#591582)

            Can you imagine a future where "gas stations" keep a generator on site for electric vehicles? I know it's just blue sky, impossible thinking but dig deep and stretch that imagination.

            • (Score: 1) by khallow on Friday November 03 2017, @12:15PM

              by khallow (3766) Subscriber Badge on Friday November 03 2017, @12:15PM (#591636) Journal
              Can you imagine the prices that a customer would pay for generator-based power? It's a lot cheaper to have a generator around to provide electricity for gas pumps, and a more involved matter to have a generator capable of handling a hundred electric cars an hour.
            • (Score: 0) by Anonymous Coward on Friday November 03 2017, @12:15PM

              by Anonymous Coward on Friday November 03 2017, @12:15PM (#591637)

              Please run some very simple calculations to pick a size for that generator. How many cars will it charge at once -- the Tesla Supercharger near me has 8 bays and its own big transformer from the mains. If electric cars dominate, hundreds of bays will be needed (time spent at the charging spot is many times longer than time sitting at a gas pump). What kind of pollution controls will be required?

              Who is going to pay for this monster generator that sits idle 99%+ of the time. Will it even run after sitting for a few years?

              Or, you know, you could have your own generator at home, probably need a garage to keep it out of the weather. At 120VAC 15 amps you can add about 4 miles to an electric car range in an hour. Hope you have a bicycle to speed up the trip to the gas station to get more gas for the generator...

        • (Score: 3, Informative) by realDonaldTrump on Friday November 03 2017, @11:02AM (1 child)

          by realDonaldTrump (6614) on Friday November 03 2017, @11:02AM (#591627) Homepage Journal

          So true. Our national parks are a DISASTER. #Infrastructure in horrible condition. We're raising the entrance fees. So we'll have money to rebuild. And Yellowstone may have oil under it. So we can open it up to our oil companies. They get the oil, we get the money, we rebuild the grid, your electric car gets charged in the park. There you are driving your electric in Yellowstone, looking amazingly environmental, but our great oil industry has a big hand in it. Everybody wins.

          We can do the same thing in Florida, in the Everglades. As Michele Bachmann said. I'll tell you, she would be a terrible President. But she had a very smart idea. Get American oil & gas flowing, so we don't have to import as much from Russia, China and Venezuela.

          And the Grand Canyon has uranium. As you know, Jeff Flake and John McCain are disgusting. I call them traitors to the party. Or maybe they're just morons. To be perfectly honest with you, it's probably both. But they listened to our great mining companies. The mining companies gave some big donations, so they listened. And they said, let our miners get that uranium out. I'm very glad it happened. Because right now, we need all the uranium we can get. For our nuclear, for our nuclear energy & our arsenal. Some people will say, "Oh, no nukes! Please Mr. President, no nukes!" These are foolish people. I am the first one that would like to see nobody have nukes, but we’re never going to fall behind any country. Even if it’s a friendly country, we’re never going to fall behind on nuclear power. It would be wonderful, a dream would be that no country would have nukes, but if countries are going to have nukes, we’re going to be at the top of the pack. The United States must greatly strengthen and expand its nuclear capability until such time as the world comes to its senses regarding nukes. We've fallen behind on nuclear weapon capacity. And the Uranium One deal isn't helping. Crooked Hillary really put us behind the eight ball on that one. So uranium is very precious to us right now.

          A couple of years ago, Senator Murkowski, one of our great Republican Senators (with great legs), tried to do something called SA 838. Which had a lot of support in our Senate. And what it would do is, we could sell our national forests, wildlife refuges & wildernesses. SA 838 would let us sell them. For some reason -- very complicated -- we can't sell our national parks, monuments or preserves. But if we do SA 838, we can sell the other. If we have the votes. We will have the votes. We need to get rid of the Filibuster Rule.

          And Senator Hatch from Utah had a very smart idea. We can't sell our national monuments, but I can make them smaller. Orrin comes to me, he asks me to shrink the Bears Ears and Grand Staircase-Escalante national monuments out in Utah. And I approved his recommendation. @SecretaryZinke got some tremendous comments on that. Amazing support from the American people! Who I always, always put first. Grand Staircase-Escalante was created by President Clinton, by Bill Clinton. Not very long ago, not long at all. And Bears Ears was created by President Obama. Last December, right before he quit. Believe me, I stand for protecting our heritage, our history, our beautiful statues and monuments. 100 percent. We must #NeverForget the Civil War. But these monuments aren't very old at all. Not even as old as Ivanka. When she was 17, I made a deal with her. She made me promise, swear to her that I would never date a girl younger than her. And if these monuments were girls, I couldn't date them. They're very new. And they were as big as Connecticut! INAPPROPRIATE. A big mess for me to clean up. #MAGA 🇺🇸

          • (Score: 2) by realDonaldTrump on Tuesday November 07 2017, @09:30AM

            by realDonaldTrump (6614) on Tuesday November 07 2017, @09:30AM (#593572) Homepage Journal

            Puerto Rico also has a shitty grid. It FAILED before Hurricane Maria even arrived. And it will cost a lot to fix. Thinking of charging an admission fee to Puerto Rico! 🇺🇸

    • (Score: 2) by DeathMonkey on Friday November 03 2017, @06:05PM

      by DeathMonkey (1380) on Friday November 03 2017, @06:05PM (#591781) Journal

      One scenario not often mentioned is a regional power outage...

      Guess what powers gas-pumps....