Tesla and Elon Musk had very high targets for production volume, performance and many other factors. They came up short of those targets but still achieved something amazing. This is Elon’s approach, make hugely ambitious targets and come up short by internal metrics yet still achieve more than competitors.
Tesla had to add a third assembly line with a lot of the line in a very large tent. They had to manually perform some of what they had hoped to automate. However, they still got to high targets. The Model 3 is among the top 6 US passenger cars in terms produced on a monthly or quarterly basis. The Model 3 is the US number one passenger car into of monthly sales revenue.
Building three assembly lines instead of two was a 50% miss in terms of planning what was needed.
Analyst Faragu believes that by eliminating downtime in the Fremont California Gigafactory, then Tesla will reach 7,000 cars per week. This will be 91,000 cars per quarter. This would make the Tesla Model 3 the number one US passenger car in terms of volume.
Tesla learned a lot from ramping up the California production. They will take what they learned to make a more efficient factory in China and have a smoother and easier production ramp.
Faragu believes that Tesla will be able to expand production volumes and margins. Margins last quarter in 2018Q3 were 22% on 56,000 cars. Tesla should be heading to 91,000 cars with max Fremont factory and then even double that with the China factory fully ramped. Sales will have lower car prices and leasing options to lower the costs to customers. They will be able to have double-digit profit margins and not just operating margin.
Brian Wang is a Futurist Thought Leader and a popular Science blogger with 1 million readers per month. His blog Nextbigfuture.com is ranked #1 Science News Blog. It covers many disruptive technology and trends including Space, Robotics, Artificial Intelligence, Medicine, Anti-aging Biotechnology, and Nanotechnology.
Known for identifying cutting edge technologies, he is currently a Co-Founder of a startup and fundraiser for high potential early-stage companies. He is the Head of Research for Allocations for deep technology investments and an Angel Investor at Space Angels.
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