Model 3 out of production hell, Musk launched Jedi fight back

Time:2018-09-14 15:58:12  Views:0


Over the past six months, Model 3’s “Hell of Ability” has become one of the biggest dilemmas Tesla has faced since its creation and has thus encountered a strong bearishness in the capital market. As the CEO, Elon Musk's emphasis on Model 3 is self-evident. In recent days, he has finally pulled output to 3,500 units per week by "extreme means" and plans to reach 6,000 units/week by the end of June. . The delivery of Model 3 is bound to accelerate, and financial performance will gradually improve. Musk has launched a Jedi fight back.
Bearish clouds
At the end of July last year, the Model 3 delivered 30 users for the first time to anxiously awaiting users. The output climbing plan that Musk posted on Twitter at that time was 100 in August, more than 1,500 in September, and 20,000 in December. Tesla’s official data showed that Model 3 delivered only 1,550 units in the fourth quarter of last year. The production target of 5000 units was repeatedly postponed until the end of the second quarter of this year.

The output is far from the target, causing investment banking and capital markets to worry about Tesla’s capacity and cash flow.
In March of this year, credit rating company Moody's downgraded Tesla’s credit rating from B2 to B3, and did not rule out the possibility of continuing to downgrade. Moody's said that this rating reflects the serious shortage of Model 3's production capacity and the lack of liquidity due to the negative cash flow and the maturity of convertible bonds.
In April of this year, Goldman Sachs advised customers to sell Tesla shares in a report, and was concerned that Tesla could not achieve the Model 3 production target by the end of June. Goldman Sachs analyst David Tamberrino believes that Tesla’s production capacity in the second quarter of this year may be lower than the 2,000 units reached in the last week of the first quarter, which is only 1400 units per week.
At the earnings conference on May 3, Musk refused to answer questions from analysts about Tesla’s need for financing. As a result, the company’s share price plummeted 5.55% to US$284.45 on the same day. Afterwards, Musk put his words to the flames, and on May 7 threw about 10 million U.S. dollars to buy Tesla shares. He learned to retire short positions, and the stock price rose back to 302.77 U.S. dollars.

Tesla's stock price movement in May
Musk also left three words on Twitter: "Place your bets!" and he was also trying his best to close the door to hell.
lron Man Overseer
Musk began personally supervising the management of the Model 3 production, moved to the production line in Fremont, Calif., and even slept there.
He frankly stated that the battery module is one of the major production impediments to the Model 3. As a result, Grohmann Engineering, a German-based subsidiary of automation machinery, reworked Gigafactory's battery production line. The new automated production line will significantly reduce production costs. In addition, Tesla spared no expense, transporting robots and production equipment full of six aircraft from Europe to California in order to speed up battery manufacturing and allow Model 3 production capacity to reach standards.

Using too many robots is another fatal injury to the limited capacity of the Model 3. Musk admits that this is a mistake he made, and that Model 3 needs more manpower to assist in assembly. Bernstein analysts Max Warburton and Toni Sacconaghi believe that Tesla has ordered KUKA Robotics industrial robots that not only automate the stamping, painting, and welding processes, but also try to bring the ultimate Assembly work (ie placing parts into the car) is also handled by the robot. However, welding, final parts installation, and automated assembly of battery packs have encountered problems.
If a worker wants to do good, he must first sharpen his tools. In February, April and May of this year, the production of the Model 3 was suspended for the third time, systematically overcoming the bottleneck in the production line, increasing the output efficiency, and working 24 hours a day and night. The target reached a high of 6,000 units per week at the end of the second quarter. The output of the Tesla earnings target was also higher than 1,000. Well-known science and technology analyst Gene Munster believes that the suspension of the Model 3 production line is not only a bad thing, but also proof that the situation is improving. He is optimistic about Tesla's new production technology. 

The personal overseers were effective, and Musk recently said in an internal letter to employees that the daily output of the Model 3 has reached 500 units, and the converted output is 3,500 units per week. Compared with the 2,000 units per week in the previous month, there has been significant progress. . Musk not long ago he was known to book customers, four-wheel drive version of the Model 3 is expected to begin in July to deliver. Prior to this, he said that unless the Model 3 production line increases to 5,000 units per week, it will not introduce two-engine, four-wheel drive models. The above shows that Musk seems confident that the Model 3 will not only meet production targets by July but also have the ability to cope with more complex models.
Absolutely counterattack
Model 3's volume production is getting better, and with the increase of production efficiency, the delivery volume will also increase. Musk insists that his electric car company will achieve "positive cash flow" in the third quarter and fourth quarter of 2018.

Baird (Baird) analysts said that Tesla's bad news may have been exhausted and it is expected that the stock price will gradually increase as Model 3's capacity increases. And maintain Buy rating, target price of 411 US dollars.
Nomura Instinet analyst Romit Shah said that Tesla’s share price may go straight to US$500 per share and said that its opportunities in the Chinese market will be very large. The keywords surrounding Tesla may be in the future 3- In the past six months, from the current "bankruptcy risk, burning money" to "market opportunities, growth," and in the next two years, Tesla's market value may rise to 100 billion US dollars.

Tesla's profitability is a continuing concern. Model 3 has more than 400,000 orders, and Musk has begun a Jedi fight back.