Great results from Tesla for Q1 production: a 40% increase over Q4 and the highest numbers ever attained. This includes 9,766 of the new Model 3 and that figure continues to increase with a short term goal of 300 per day. Great achievements all around, and the Q2 numbers will be even better.
And yet still the naysayers, those self-proclaimed industry “analysts”, continue to whine over anything and everything: production, quality, stock price. And a recall to them is enough “proof” to condemn the entire thing (the recent recall by Tesla over steering rack bolts that may cause an issue is a lot less of an issue than Ford’s even larger recall over steering wheels that could fall off – and have in a few instances). They look for any and all issues as evidence of some fatal flaw in the entire “scheme”. Why is this?
We suggest patience – take a step back and look at everything that has been accomplished. Tremendous work here: we believe that Tesla is a American success story, a phenomenal one at that. And we see parallels to some other American revolutions such Apple and Amazon.com. Remember that Apple failed at one point due to poor management, and the industry analysts all but buried it – only to see that it came back stronger than ever and to the same original vision. Amazon is an even better example – the analysts almost purposefully called it dead many times, or that it “should be” dead – when over successive quarters for many years the profits were rolled back into the business instead of into the pockets of investors. Folks, it’s called a long term investment (protein) rather than a short term (sugar water) return to investors. Look how well both these companies have turned out, and investors with patience are all rich if they held their stock – while the naysayers are still strangely quiet and probably still shaking their heads in disbelief.
Now imagine where Tesla would be if gas prices weren’t held so artificially low. And if our national energy policy was still focused on getting away from foreign suppliers as much as possible, rather than continuing to increase oil imports mindlessly. Or if the United States federal excise tax on gasoline was indexed to inflation, rather than left as is (last changed in 1993, and since then inflation has increased by 64.6 percent). That same excise tax that is supposed to pay for maintaining our highway infrastructure… which has reached a crisis point.
This isn’t a political story, it’s an American success story. We’ve driven the all-out Model S several times, and we continue to be amazed by the instant (and huge) torque all across the power band. It’s a terrific drive and we’re looking forward to taking delivery of our own Model 3 some day.
And Tesla is a continuing revolution in progress – the upcoming Roadster and Semi are incredibly revolutionary. The trucking industry is committing to the Semi by the thousands, and even before it becomes available they are already building the charging infrastructure that will be needed to support it. The new Roadster, the top performing sportscar ever built (gasoline or electric), is a bit further out and will go on pre-sale soon.
We challenge you to buy some Tesla stock, sit on it and don’t sell under any circumstances. Then come back in a year and look at the production figures then for the S, X, 3, and Semi.
Tesla Press Release here:
Tesla Q1 2018 Vehicle Production and Deliveries
PALO ALTO, Calif., April 03, 2018 (GLOBE NEWSWIRE) — Q1 production totaled 34,494 vehicles, a 40% increase from Q4 and by far the most productive quarter in Tesla history. 24,728 were Model S and Model X, and 9,766 were Model 3. The Model 3 output increased exponentially, representing a fourfold increase over last quarter. This is the fastest growth of any automotive company in the modern era. If this rate of growth continues, it will exceed even that of Ford and the Model T.
We were able to double the weekly Model 3 production rate during the quarter by rapidly addressing production and supply chain bottlenecks, including several short factory shutdowns to upgrade equipment.
In the past seven days, Tesla produced 2,020 Model 3 vehicles. In the next seven days, we expect to produce 2,000 Model S and X vehicles and 2,000 Model 3 vehicles. It is a testament to the ability of the Tesla production team that Model 3 volume now exceeds Model S and Model X combined. What took our team five years for S/X, took only nine months for Model 3.
Given the progress made thus far and upcoming actions for further capacity improvement, we expect that the Model 3 production rate will climb rapidly through Q2. Tesla continues to target a production rate of approximately 5,000 units per week in about three months, laying the groundwork for Q3 to have the long-sought ideal combination of high volume, good gross margin and strong positive operating cash flow. As a result, Tesla does not require an equity or debt raise this year, apart from standard credit lines.
Q1 deliveries totaled 29,980 vehicles, of which 11,730 were Model S, 10,070 were Model X, and 8,180 were Model 3. Net orders for Model S and X were at an all-time Q1 record, and demand remains very strong. Model S and X customer vehicles in transit were high. 4,060 Model S and X vehicles were in transit to customers at the end of Q1, which was 68% higher than at the end of Q4 2017. An additional 2,040 Model 3 vehicles were also in transit to customers. These vehicles will be delivered in early Q2 2018, which keeps us on track for our full-year 2018 Model S and X delivery guidance.
Finally, we would like to share two additional points about Model 3:
- The quality of Model 3 coming out of production is at the highest level we have seen across all our products. This is reflected in the overwhelming delight experienced by our customers with their Model 3’s. Our initial customer satisfaction score for Model 3 quality is above 93%, which is the highest score in Tesla’s history.
- Net Model 3 reservations remained stable through Q1. The reasons for order cancellation are almost entirely due to delays in production in general and delays in availability of certain planned options, particularly dual motor AWD and the smaller battery pack. As described above, owner happiness with the product is extremely high.
We would like to thank our customers, suppliers and investors for their continued patience and belief in Tesla.
Our delivery count should be viewed as slightly conservative, as we only count a car as delivered if it is transferred to the customer and all paperwork is correct. Final numbers could vary by up to 0.5%. Tesla vehicle deliveries represent only one measure of the company’s financial performance and should not be relied on as an indicator of quarterly financial results, which depend on a variety of factors, including the cost of sales, foreign exchange movements and mix of directly leased vehicles.