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  • Tesla's Not-So-New Manufacturing Model [View article]
    How many auto plant do you have to compare the Tesla plant to. Yes they have painted the floor white and that is striking for an auto plant. But you might be surprised how clean and bright most modern auto plants are. Fremont was not a typically modern plant, so looking at the back end of the plant is no gauge. The fancy Kuka MIG welding robot technology was in wide use at GM in the mid-eighties. Yes robots are newer and better now, but not a technological advantage.

    As for the battery pack, it is a Panasonic designed commodity battery available to anyone. There may be a few tricks they have for thermal management, but that certainly does not create a market barrier to entry. Many manufacturers are building packs and Panasonic offers pack design as a service.
    Mar 6, 2013. 11:32 AM | 2 Likes Like |Link to Comment
  • Tesla's Not-So-New Manufacturing Model [View article]
    Alexia,
    I have worked with tool makers (mostly in the engine plant) and die makers (mostly in a stamping plant). I have spent many years in a auto stamping plant. I have done capital budgeting in those plants. With that experience I don't see what you apparently see. How can Tesla "affect fixed cost"? You can't just say these things and wish it so. This is accounting.
    Mar 6, 2013. 11:26 AM | 2 Likes Like |Link to Comment
  • Tesla's Not-So-New Manufacturing Model [View article]
    I admit that I do not have a full knowledge of the loan payback schedule. I suspect, but do not have proof, that more details are in the Court Order filed September 25. (http://1.usa.gov/XSYlff)

    The loan was renegotiated to delay payments until October 15, 2012:
    http://1.usa.gov/YNpeNR

    Then, just before payment was due, the loan was renegotiated again on September 25 (same day as the above court order):
    http://1.usa.gov/PYt85m

    The September 25 renegotiation lists the nine payments that I speak about. One was made in early 2012 and the next payment date is March 15. It would make business sense for Tesla to pay this off early, ideally in the remaining 8 payments spelled out. But what I did miss is a clause later in the agreement:
    the “Initial Debt Service Requirement” shall be deemed to mean, collectively, an amount equal to all Note Installments and all accrued interest on the Loans that, in each case, will become due and payable on the Quarterly Payment Dates indicated in the table above...

    I read that as back payments and interest will be due beginning March 15. Tesla will owe three quarters payment in March. But it is unclear if that will all be due. Further on the agreement states:
    Borrower hereby agrees to submit to DOE a plan for the early repayment of all principal amounts of Advances under the Notes and all other Secured Obligations under the Arrangement Agreement no later than October 31, 2012. Borrower further agrees to use its best efforts and work in good faith with DOE to then finalize an early repayment of all principal amounts ...

    I have not seen any documentation of the October 31 agreement that was due to schedule the remainder of the payments. The wording is clear that payment will be due in much less that 40 quarters or even 28 quarters. Why won't Tesla tell shareholders when their largest loan is due?
    Mar 6, 2013. 11:19 AM | 2 Likes Like |Link to Comment
  • Tesla's Not-So-New Manufacturing Model [View article]
    In Tesla site videos they show more than one press line. This article proves that Tesla is employing used presses, almost surely from General Motors since they were closing stamping facilities at the same time.

    I am surprised at the defensive nature of Tesla supporters regarding having used presses. I do not consider that a negative. Tesla was able to get some great bargains in the depths of the auto industry crisis. Presses can last 50 years and a refurbished press can perform as well as new. My point is that there is no business advantage to be had regarding operational expense, throughput, or quality.
    Mar 6, 2013. 10:56 AM | 2 Likes Like |Link to Comment
  • Tesla's Not-So-New Manufacturing Model [View article]
    Alexia,
    What are the significant differences in an aluminum stamping die? Yes there are different details the die designer needs to take into consideration, but the capital investment is about the same and it is actually harder to get a class A surface when stamping aluminum. Where is the competitive advantage.
    Mar 6, 2013. 10:48 AM | 2 Likes Like |Link to Comment
  • Tesla's Not-So-New Manufacturing Model [View article]
    Dave,
    I rode in an EV-1 long before you thought about getting your Model S. I do get that there is a certain excitement that huge low RPM torque brings to driving. And Tesla has done a great job of refining the EV-1 base motor to broaden the torque curve impressively. The fact that you love your car does nothing to disprove my premise that it will be hard for Tesla to penetrate this market and they do not have significant manufacturing advantage that will create the margins Tesla hopes for.

    Comparing a Model S to an Impala makes little sense. They are not even close to the same market segment, but I can see that it serves your purpose.
    Mar 6, 2013. 10:42 AM | 2 Likes Like |Link to Comment
  • Tesla's Not-So-New Manufacturing Model [View article]
    grimmer,
    Did Elon not brag about getting a great deal on a used Schuler press from Michigan? That was most likely from one of two GM press plants in either Lansing or Grand Blanc. So Elon definitely has used auto production equipment. Check out the Tesla stamping video and tell me which stamping line has equipment that no other manufacturer has (http://bit.ly/VAzQi5). The plant tours have been taken by people who have never been in any other auto plant and they have bought the story that Tesla has a manufacturing advantage over any other company. So rather than make unfounded statements, tell me what equipment or process they have that is not already being used by a major manufacturer. (BTW, Audi is making a great aluminum body with the A8 (http://bit.ly/Xy8cG3) but is reported to be thinking of improving the design by ditching some aluminum. Aluminum is not the perfect material for a body, but it probably was a good choice for Tesla because of the weight savings, yet they could still use conventional building techniques.
    Mar 6, 2013. 10:29 AM | 2 Likes Like |Link to Comment
  • Tesla's Not-So-New Manufacturing Model [View article]
    JRP3,
    You are an evangelist. You do not have one fact in your statement, save the opinion of several friends. I also have an equal number of friends who drive Porches, Mercedes, and BMW who would not dream of switching. The fact is no manufacturer has ever had the market penetration that you project for Tesla in the time that you claim, if in fact you have projected numbers. Mr. Musk has made a statement that he WANTS to be as big as BMW. These statements were all made in fluff interviews and show up nowhere that I have found in official company documentation or SEC reports. Mr. Musk is developing a pretty good history of making blanket statements that turn out not to be true. Your insistence that Tesla is the best car in the world shows you are in that camp that makes statements without fact. If I can easily find a half dozen performance measures and construction flaws compared to a Mercedes, then the car is not the best in the world. It is fair to conclude from that you will not get the market who wants the best constructed, or the absolute fastest, or the one with the best dealer experience. We still do not have comprehensive test data released by Tesla, why not? Tesla seems to be well on the way to high market penetration in California where people will pay anything to get HOV lane status with style. That is hardly the whole luxury sedan market.
    Mar 6, 2013. 10:00 AM | 3 Likes Like |Link to Comment
  • Tesla's Not-So-New Manufacturing Model [View article]
    Dibber,
    Guarantee you that every major manufacturer has EV designs at least in prototype stage. They can have 200,000 units/ year capacity within several years. But they are not seeing the market develop quickly. All the EV's sold would not fill the capacity of one "standard" size plant. The top producers will continue to experiment and wait for the right moment. I would not read that they don't care or "don't get it".
    Mar 5, 2013. 05:53 PM | 2 Likes Like |Link to Comment
  • Tesla's Not-So-New Manufacturing Model [View article]
    I have never disagreed that Elon can sell what seems like an unlimited number of cars. His problem now is production capability and the huge amounts of capital it is going to take to implement the Model X. I don't see the math working.
    Mar 5, 2013. 03:41 PM | 2 Likes Like |Link to Comment
  • Tesla's Not-So-New Manufacturing Model [View article]
    I have not driven the car. You have to schedule a test drive and be a prospective buyer. I felt it would have been dishonest to drive.

    You can however view the bare Model S platform at the store. I have seen a lot of sheet metal stampings and weldments professionally. You will have to take my word for it that workmanship was not up to Mercedes standards, or GM for that matter. The class A surfaces were very good. Upholstery was also not up to Mercedes standards.
    Mar 5, 2013. 03:40 PM | 2 Likes Like |Link to Comment
  • Tesla's Not-So-New Manufacturing Model [View article]
    MNasof,
    Ask yourself why Toyota left the NUMMI plant as soon as they had an out from GM? Why are there no other car assembly plants in all of California, or the entire west coast for that matter. There are many reasons. California is not friendly to manufacturing and I believe Tesla needed a special permit to paint. Also, auto expertise is in the midwest. I know everyone thinks all the smart people in the world are in the Valley, but Tesla set up a 60 engineer office north of Detroit to design the Model S. Why was that? Last, transportation over the Rocky Mountains is time consuming and expensive. You may have a bad view of the East coast but they still buy more cars than California.
    Mar 5, 2013. 03:36 PM | 2 Likes Like |Link to Comment
  • Tesla's Not-So-New Manufacturing Model [View article]
    Opportunistic71,
    I agree that Tesla might find more money to keep this going. Given the current state of the US government I am not sure more loans are coming. Other options might hurt common stock though. I am watching from the sidelines until finances are clearer.
    Mar 5, 2013. 03:31 PM | 2 Likes Like |Link to Comment
  • Tesla's Not-So-New Manufacturing Model [View article]
    Yes, owners of Tesla's seem very satisfied. That does not automatically translate to a complete takeover of the 900k unit luxury segment. Assuming that Elon could sell that many, he is a great salesperson, the capital needed to tool for that many cars is enormous and will take many years. Other competitors will not sit and wait while that happens.
    Mar 5, 2013. 03:27 PM | 2 Likes Like |Link to Comment
  • Tesla's Not-So-New Manufacturing Model [View article]
    Yes, you are right. Toyota had world wide sales of $233B, so it would be closer to 500 times Tesla's 2012 revenue.
    Mar 5, 2013. 03:23 PM | 2 Likes Like |Link to Comment
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