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Discussion Starter #1 (Edited)
Docs Reveal: Tesla’s Production Capacity Limited To Less Than Half Of Its 500,000 Vehicle Target
September 29, 2016 By Edward Niedermeyer

https://dailykanban.com/2016/09/docs-reveal-teslas-production-capacity-limited-less-half-500000-vehicle-target/

TL;DR

- Air quality permits for the recently-upgraded paint shop at Tesla’s Fremont plant limit the electric automaker’s production capacity to less than half of its targeted rate of 500,000 vehicles per year.

- Tesla says it plans a second expansion of the Fremont paint shop, but has not yet applied for the necessary emissions permit or even put the equipment from its first expansion phase into use.

- If any future expansion or upgrade increases the Fremont plant’s net emissions by more than 6.5% over currently-permitted levels, Tesla’s paint shop will be required to comply with the extremely stringent Lowest Achievable Emission Rate (LAER) standard.

- These regulatory conditions present a serious challenge to the volume goals and production ramp forecast Tesla has publicly set for Model 3
400,000 Tesla Model 3 Cars In 2018? It's Just Not Possible
Jun.12.17 | Steve Funk

https://seekingalpha.com/article/4080920-400000-tesla-model-3-cars-2018-just-possible

Best-case scenario for 2018? 230,000 Model 3 cars.
They seem to be nearly in agreement ~30,000 units.
 

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Wow...old news...:)

Soberly, Tesla states that its ambitious plan to build the Model 3 assumes “that we will be able to build and equip a new dedicated final assembly line for high volume production of Model 3 at the Tesla Factory without exceeding our projected costs and on our projected timeline.” I haven’t seen it mentioned in the 10-K that the building of this dedicated final assembly lines has been started. If it isn’t being built now, it won’t make Model 3 cars next year.

Just as a small for instance, at Tesla’s site in Lathrop, CA, the company is “nearing completion of a site expansion to include an aluminum castings operation,” an undertaking that raises eyebrows throughout the industry.

“Casting, and especially aluminum casting is a very special process that needs very special people,” told me a grizzled engineer at former Tesla partner Daimler. “Each year, we think of getting rid of ours, and to leave it to specialists.” To build a good casting shop takes a while, as Tesla’s 10-K attests. In last year’s 10-K, Tesla said that it “recently commenced production and machining of various aluminum components at our facility in Lathrop, California.” More than a year later, it still isn’t finished.

There is laundry list of critical factors the Model 3 depends on for its survival, as Tesla writes:

“that the equipment and processes which we install for Model 3 production will be able to accurately manufacture high volumes of Model 3 vehicles within specified design tolerances and with high quality;

that we will be able to continue to engage suppliers for the necessary components on terms and conditions that are acceptable to us and that we will be able to obtain components on a timely basis and in the necessary quantities to support high volume production;

that we will be able to complete our final tooling, production planning and validation for Model 3 and the delivery of final component designs to our suppliers in a timely manner; and

that we will be able to attract, recruit, hire and train skilled employees, including employees on the production line, to operate our planned high volume production facilities to support Model 3, including at the Tesla Factory and Gigafactory 1.”

There is much more, like “if our vehicles or other products that contain our vehicle powertrains or battery packs fail to perform as expected, our ability to develop, market and sell our electric vehicles could be harmed.” It happened in the past, and it will happen again. “Any failure to manage our growth effectively could materially and adversely affect our business, prospects, operating results and financial condition.” Tesla’s growth plans are considered suicidal by many in the industry.

http://ir.tesla.com/secfiling.cfm?filingID=1564590-17-3118&CIK=1318605

Over the signatures of Elon Musk and CFO Jason Wheeler (who announced his sudden departure from Tesla a week before he signed the 10-K ) Tesla enumerates on 15 tightly-spaced pages the many obstacles standing in the way of Tesla’s success.

There may be more “risks and uncertainties not currently known to us.” 10-K usually are dry reading. Tesla’s annual report is the Stephen King of SEC filings.

Year after year, the company says it has “no experience.”

Last year, Tesla said it has “no experience in the production of lithium-ion cells.” This year, Tesla confirms that it has “no experience to date in manufacturing vehicles at the high volumes that we anticipate for Model 3, and to be successful, we will need to implement efficient, automated and low-cost manufacturing capabilities, processes and supply chains necessary to support such volumes.”
 

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They want to make sure they can't be sued for not warning investors that there are many, many things that could go wrong and eat the investor's money.

I would say Tesla's dire financial warnings have been more accurate than Musk's rosy tweets.
 

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Discussion Starter #4
Wow...old news...:)
Eh, I was looking at something else when this popped up. It's news to me. I haven't heard BOO about not being able to paint enough cars to make the BS goal of 500,000. On the other hand, they can probably paint the number they'll actually produce in Fremont in a year, maybe. ~200,000 even.

Last year, Tesla said it has “no experience in the production of lithium-ion cells.” This year, Tesla confirms that it has “no experience to date in manufacturing vehicles at the high volumes that we anticipate for Model 3.....
Both are true. Tesla has never produced a lithium-ion cell and they can't produce 500,000 cars a year in Fremont any time soon if ever. They can't sell what they can't paint. Fremont is not the place for such activities.

Who is "we" by the way?
 

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Does anyone here really think Tesla will produce 250,000 Model 3 cars a year? Pure fantasy....
 

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Eh, I was looking at something else when this popped up. It's news to me. I haven't heard BOO about not being able to paint enough cars to make the BS goal of 500,000. On the other hand, they can probably paint the number they'll actually produce in Fremont in a year, maybe. ~200,000 even.



Both are true. Tesla has never produced a lithium-ion cell and they can't produce 500,000 cars a year in Fremont any time soon if ever. They can't sell what they can't paint. Fremont is not the place for such activities.

Who is "we" by the way?
That is TESLA...those are statements lifted from their current 10-K
http://ir.tesla.com/secfiling.cfm?fi...18&CIK=1318605
 

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I thought it had been discussed here, I guess we were discussing paint problems at Fremont on another forum...:rolleyes:

First Bottleneck: The Paint Shop

Tesla has twice revamped its paint shop, first in 2013 and again last year. Last year's rebuild cost several hundred million dollars.

What was achieved? Seeking Alpha member A Plate of Waffles has studied the permitting application documents, and believes Tesla has installed a brand new paint line (but demolished the old one). The new line is capable of 25 units per hour, which translates to between 125,000 to 140,000 cars per year.

Currently Tesla's maximum capacity at Fremont is only 406,620 cars per year. That assumes 180,720 Model X and Model S cars and 225,900 Model 3 cars.

Already, we're a long way from Tesla's 2018 forecast of 400,000 Model 3s. With a projected 100,000 units Model S and Model X that implies a maximum output in CY 2018 of 325,900 vehicles.

Even assuming you could run two paint lines for 24 hours a day, 365 days, that would add up to only 438,000 cars. But right now there is only one paint line. And a paint line can't be run 24 hours a day.

Even 21 hours a day (which would yield 316,260 cars) would be difficult and expensive to achieve. So, I'm setting the theoretical limit on the paint line at 316,260 cars per year. Combined production of Model 3 and Model S/X combined would be around 416,260 for a year. This is within several thousand vehicles of the maximum NUMMI production.
 

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Discussion Starter #9
I remember discussing how a damaged model S a-pillar was painted over in Fremont.

 

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