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Tesla RHD Model 3 Update

|About: Tesla, Inc. (TSLA)

RHD Model 3 is not yet available.

Relatively small market means Tesla will not address this until it has gone through the rest of the world backlog.

RHD timing therefore gives a clue as to when Tesla expects LHD demand to fall below production capacity.

So long as the Fremont factory is going flat out to produce Model 3 for Tesla's (TSLA) customers in left hand drive countries, there seems little point in going through the changes to the line required to produce right hand drive vehicles - particularly given that Tesla's constant demonstrations of manufacturing incompetence suggest that the changes will be much harder than they should be.  

However, once the backlog of demand in the left hand drive countries has been worked through (and in North America it seems that this time has already passed for all but those customers really determined to hold out for the SR vehicle), Tesla will have to match their production to steady-state demand.  If demand in the LHD countries is, as seems likely, below production capacity at Fremont and (eventually) Shanghai, it will make sense to start to produce RHD Model 3s.  When will this be?

As usual, my first recourse when considering such questions is to ask Tesla.  But not management, who seem to have a veracity problem.  Instead, I went to Hong Kong (specifically the Pacific Place mall in Admiralty), where Tesla held a sales event in early March.  Hong Kong used to be one of Tesla's best markets for Model S & X, but demand collapsed when tax credits were withdrawn despite heroic sales efforts, and shows little chance of returning

According to Tesla HK staff, they expect to receive the first RHD Model 3s in early to mid August.  Allowing for shipping, that suggests the vehicles  will leave Fremont in early-mid July.  Allowing for manufacturing and retooling, we can estimate a date somewhere in June for RHD production preparation to start.  Expect this to negatively impact Q2 production.

Disclosure: I/we have no positions in any stocks mentioned, but may initiate a short position in TSLA over the next 72 hours.

Additional disclosure: Retired. No boss for Elon to call.