Seeking Alpha

Tesla Motors' production forecast in focus again

  • Tesla Motors (TSLA +1%) CEO Elon Musk predicted the automaker can reach annual production of 40K units by the end of next year during an interview on CNBC.
  • Though far from the first time the 40K figure has been thrown out by Tesla, confirmations from the company that its aggressive production goals are on track are needed to help support its share price.
  • In 2016, Tesla projects a run rate of 1M vehicles. The billion-dollar question is at what margin rate?
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Comments (35)
  • Tom Incorporated
    , contributor
    Comments (178) | Send Message
     
    What exactly is a "run rate"?
    22 Aug 2013, 10:56 AM Reply Like
  • Esekla
    , contributor
    Comments (3677) | Send Message
     
    same as annual production
    22 Aug 2013, 10:58 AM Reply Like
  • nungster
    , contributor
    Comments (123) | Send Message
     
    How the financial performance of a company would look if you were to extrapolate current results out over a certain period of time.
    22 Aug 2013, 12:22 PM Reply Like
  • Esekla
    , contributor
    Comments (3677) | Send Message
     
    I believe the margin can continue to improve, at least while they only manufacture cars at the existing plant. The big questions for me are will they still be "production constrained" at 40K per year, let alone a million, and what will other manufacturers be producing in 2016.

     

    http://seekingalpha.co...

     

    Yes, yes, I know many of you trust Elon, and consider that an investment thesis. I'm long the stock myself, 'til the end of the week, which is about as far as I'm willing to trust anyone with a vested interest.
    22 Aug 2013, 10:57 AM Reply Like
  • Surf Dog
    , contributor
    Comments (826) | Send Message
     
    This is far from over.
    22 Aug 2013, 11:13 AM Reply Like
  • joeinslw
    , contributor
    Comments (84) | Send Message
     
    That may change when you see the profit of just today, up over $9.00 per share. I expect the stock will be around $200.00 in a few weeks.
    I'm loooooooong like a hot dog.

     

    tsla is going up for several reasons, and they are many others, but two of them are the best car on the road (Consumer Reports) and the safest car on the road, (NHTSA) those two reasons should be on the top of your list when you by a new car, there on my list for sure.
    22 Aug 2013, 04:40 PM Reply Like
  • GaltMachine
    , contributor
    Comments (1466) | Send Message
     
    How do they go from 40,000 to 1,000,000 vehicles in 2 years?

     

    Is that actually possible from a manufacturing, resources, factories, batteries, manpower, and facilities point of view?

     

    I am all for optimism but this would seem like a miracle from a purely objective point of view.

     

    Before I get excoriated, I will point out I have no equity position either way.
    22 Aug 2013, 11:00 AM Reply Like
  • Mark Moretto
    , contributor
    Comments (3) | Send Message
     
    Looks like that might be just 100,000 with an extra zero put in there. Production of 40K to 100K seems more likely, given that only a select few of major manufacturers with high-demand (Ford, GM, VW, Toyota, etc.) are producing about/over 1 million per year.

     

    I, also, have no position in the above stocks.
    22 Aug 2013, 11:15 AM Reply Like
  • GaltMachine
    , contributor
    Comments (1466) | Send Message
     
    Mark,

     

    I clicked on that link and it has this chart attached. So if there is a mistake it is CNBC's error.

     

    Tesla Production
    Projected:
    2013: 21,000
    2014: 40,000
    2016: 1000,000
    Source: Company Estimates

     

    The number quoted on the chart on the interview is 100k so clearly it is a transposition error on CNBC's end.
    22 Aug 2013, 11:23 AM Reply Like
  • joeinslw
    , contributor
    Comments (84) | Send Message
     
    How about the fact that IT"S THE SAFEST CAR ON THE ROAD TODAY, according to the crash tests that were done on the Model S by NHTSA.
    They said The Tesla Model S Is So Safe It Broke the Crash-Testing Gear.

     

    I added: THIS CRASH TEST MAY HAVE AT LAST, BROKEN THE BACK OF THE FOOLS WHO SHORT TSLA STOCK.

     

    "Be Smart....Be Long". That's my new Tsla Motto.
    22 Aug 2013, 12:06 PM Reply Like
  • nungster
    , contributor
    Comments (123) | Send Message
     
    New product line?
    22 Aug 2013, 12:22 PM Reply Like
  • Joe E Coyotee
    , contributor
    Comments (254) | Send Message
     
    How do they go from 40,000 to 1,000,000 vehicles in 2 years
    That's easy for Elon , he is connected , think about it he already partnered with Toyota and Daimler Benz .
    23 Aug 2013, 01:25 AM Reply Like
  • fjm9898
    , contributor
    Comments (25) | Send Message
     
    This has incorrect data. 2016 is a production of 100,000+ not 1million. Please fix this false statement.
    22 Aug 2013, 11:15 AM Reply Like
  • User 5969041
    , contributor
    Comments (13) | Send Message
     
    I think 1M was supposed to be 100K.
    22 Aug 2013, 11:15 AM Reply Like
  • Tales From The Future
    , contributor
    Comments (5789) | Send Message
     
    That's correct, 100K, unfortunately no-one changed it.

     

    PS: Also, Musk is hedging the Gen III introduction date: He now talks about "within five years". First date was 2016...
    23 Aug 2013, 06:26 AM Reply Like
  • PeterJA
    , contributor
    Comments (3679) | Send Message
     
    tftf, please provide a source for your quotation.
    23 Aug 2013, 08:54 AM Reply Like
  • Tales From The Future
    , contributor
    Comments (5789) | Send Message
     
    Source? Video here:

     

    http://bloom.bg/159UctG

     

    Interview with Elon Musk.
    25 Aug 2013, 12:55 PM Reply Like
  • Surf Dog
    , contributor
    Comments (826) | Send Message
     
    Their production platform was designed to be easily scaled and way less expensive to do so. Replicating it based on demand is already part of the plan.
    22 Aug 2013, 11:16 AM Reply Like
  • Jack Rice
    , contributor
    Comments (961) | Send Message
     
    Yes! I think maybe that's causing the current feeding frenzy. The scalability of manufacturing TSLA's, both current and future models, is far cheaper than with other cars.

     

    They can open plants far cheaper, especially in places that welcome them, than in US. In Asia -- especially Singapore, Hong Kong, Taipei and Shanghai -- I think thousands are lusting for a TSLA, and not just the fatcats. TSLA offers a way, if only as a token, out of the horrendous urban air pollution they finally seem trying to mitigate in earnest.

     

    Japan? I think this is where the tie-in with Toyota may come into play. Europe should be interesting, because TSLA may be dealing with EU.

     

    The Model-S is proof-of-concept, and I think the market recognizes that proven concept as applying to Gen-III, which is TSLA's future.
    22 Aug 2013, 12:24 PM Reply Like
  • joeinslw
    , contributor
    Comments (84) | Send Message
     
    Nah....I think if there is a feeding frenzy is because of the crash test results that came out yesterday.
    NHTSA said:
    TESLA MODEL S ACHIEVES BEST SAFETY RATING OF ANY CAR EVER TESTED and is the SAFEST CAR ON THE ROAD <> BARR NONE.
    If you were in the market for a new car would that interest you?

     

    I only wish this information came out for my son's Mother-in-law, and Father-in law because only the day before yesterday were involved in a head on crash that claimed her life, and his Father-in-law is in critical condition in a local hospital.
    These type of safe vehicles are desperately needed, because if or when they will save lives, what would you pay for that automobile if you knew it could save a family member if they were riding it one?
    22 Aug 2013, 02:37 PM Reply Like
  • Jack Rice
    , contributor
    Comments (961) | Send Message
     
    Well, that came out about the same time as the news about expansion in Asia and Europe and the report they're taking pre-orders in China. Hey, pick your fave reason -- they're all good.
    22 Aug 2013, 03:56 PM Reply Like
  • bpete2013
    , contributor
    Comment (1) | Send Message
     
    "They can open plants far cheaper, especially in places that welcome them, than in US. In Asia -- especially Singapore, Hong Kong, Taipei and Shanghai..."

     

    They don't even have to do that. They occupy only a modest amount of the old NUMMI plant that Toyota used in California, pumping out 6000 cars A WEEK there.

     

    As demand increases, TSLA will just expand the production capabilities of the facility. Its all been figured out by Elon. Very smart guy.
    23 Aug 2013, 09:22 AM Reply Like
  • MtSmalls
    , contributor
    Comments (25) | Send Message
     
    Since CY 2016 would include only Model S and X (I believe Gen III is 2017, or possibly late 2016), I think you could reasonably assume margins around the 18-20% range (ex Credits). Product mix would be key since the X will be slightly lower sales prices than S (as currently planned), but you could see an AWD version of the S (at a 10-15% premium) as well. 100K cars at avg price betw $60- $70k? $6B in revenue at the low end, at 15% margins is $900M in net revenue...

     

    Obviously LOTS of variables still in play. Mix of X vs. S, US vs. Non-US sales (and is there a wider margin for non-US sales?), do Non-US sales get helped or dinged by FX? but good food for thought.
    22 Aug 2013, 11:44 AM Reply Like
  • Joe Dirnfeld
    , contributor
    Comments (1128) | Send Message
     
    Doing it well once was a miracle. Replicating it 50 times is just a matter of money.

     

    Supply chain has to ramp up accordingly. This is a major factor.
    22 Aug 2013, 12:53 PM Reply Like
  • embryorambo
    , contributor
    Comments (265) | Send Message
     
    tesla makes a very safe 90k car, that sells 40k units per year, so therefore entire company is worth 17 billion? Where do they plan on getting the lithium to scale up to millions of units per year? The sad truth is there is not enough lithium to go around the world with everyone having an electric car. my suggestion to TSLA longs is to hope for new Aluminum oxide technology to arrive-TSLA is and in my opinion always remain a boutique player
    22 Aug 2013, 01:04 PM Reply Like
  • Joe Dirnfeld
    , contributor
    Comments (1128) | Send Message
     
    Elon said lithium is not even close to an issue, 2% of battery and no shortage whatsoever. Stop the misinformation.
    22 Aug 2013, 01:26 PM Reply Like
  • joeinslw
    , contributor
    Comments (84) | Send Message
     
    There are other new technology coming in the next few years, they are called High Voltage Capacitors which will hold much more power than batteries can now, and in doing so will also give future Model owners greater mileage.

     

    So hold your hats, Tesla is going into overdrive and higher speed in the future.
    Don't get discouraged, stay long and wait for better and better technology.
    22 Aug 2013, 03:19 PM Reply Like
  • Jack Rice
    , contributor
    Comments (961) | Send Message
     
    Hardly discouraged today. ;)
    22 Aug 2013, 03:58 PM Reply Like
  • carbonkev
    , contributor
    Comments (62) | Send Message
     
    We should be good on Lithium until 2050, even if EVs take off like nobody's business.
    http://1.usa.gov/1d6KnzR
    22 Aug 2013, 07:12 PM Reply Like
  • Joe Dirnfeld
    , contributor
    Comments (1128) | Send Message
     
    Elon is a shorts nightmare, the guy is humble enough to give credit to his team mostly , and secondly thanks investors for the generous valuation of the firm based on future execution.
    22 Aug 2013, 04:41 PM Reply Like
  • embryorambo
    , contributor
    Comments (265) | Send Message
     
    Joe i think Tesla is a great company, i just do not think the stock price reflects the discounted future cash flows of the company discounted back to todays price-period-I would stay away long or short TSLA stock becuase it is in the hands of the wall street elite at this point
    22 Aug 2013, 04:47 PM Reply Like
  • Michael Bryant
    , contributor
    Comments (5795) | Send Message
     
    If you blur out numbers, how about showing how you expect to achieve it. In ten years, we will produce 50 starships with warp drive.
    22 Aug 2013, 04:56 PM Reply Like
  • jsijimmy
    , contributor
    Comments (443) | Send Message
     
    Regardless of anyone's position on TSLA, the safety features Elon Musk has pioneered will be appearing in other manufacturer's cars in the coming years.
    22 Aug 2013, 05:33 PM Reply Like
  • embryorambo
    , contributor
    Comments (265) | Send Message
     
    Agreed, Elon Musk is like the Japanese in the 80s. He is coming fast and furious and making a lot of companies look light years behind the 8 ball. His team he has assembled has made a huge stride towards the worldwide adoption of the electric vehicle and future safety benchmarks. With that being said i believe the shares are extremely ahead of themselves, as everyone knows who TSLA is and will be know what they eating for breakfast every morning.
    22 Aug 2013, 10:26 PM Reply Like
  • Tales From The Future
    , contributor
    Comments (5789) | Send Message
     
    One important area about production bottlenecks will be battery supply beyond the current Model S and X.

     

    In case you didn't believe me when I mentioned this earlier: CEO Elon Musk now talked about this himself:

     

    http://cnb.cx/153Vvu5

     

    Even Samsung and Panasonic combined will have issues as suppliers at today's production levels.

     

    In the past some people didn't believe me when I noted this fact alone could postpone the Gen III car to 2017-2018 (TSLAs target was 2016).
    22 Aug 2013, 10:39 PM Reply Like
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