Leaked Tesla email says Model 3 will go to 24/7 production

Tesla is about to ramp up production of the Model 3 sedan according to an email obtained by Jalopnik. The company shut down the sedan’s production line this week, but this email says the line will shortly run away and a third shift will be added, permitting the sedan to be built around the clock. Tesla is aiming to produce 6,000 Model 3 sedans per week by June.

The email, reportedly penned by Elon Musk, details a wide-range of topics, including Model 3 production, fiscal expenditures, manufacturing tolerances, Tesla’s lack of fiscal profit and how meetings can kill a company.

According to this note, the Model 3 line will be down for three to five days” to do a comprehensive package of upgrades .” It states that this will allow Tesla to ramp up production to 3,000 to 4,000 Model 3 sedans by next month. Then, the company plans to implement another set of upgrades to allow for 6,000 by the end of June. Last week, according to this email, Tesla completed its third consecutive week of building more than 2,000 Model 3s.

It’s a tall order to expect production to triple in two months.

To help meet this expectation, Tesla is adding another shifting to official records of the general assembly, body and paint at its Fremont facility. Between Fremont and its Gigafactory, Tesla is looking to 400 additional employees to help meet the production schedule.

This news about increasing production arrives amid questions about safety and work conditions in Tesla’s facility. Though Tesla fiercely pushes back against the news, the issues to will likely continue as employees fight to satisfy Musk’s lofty production expectation.

Musk is apparently looking to rein in expenditures, too , noting that anything costing more than a million dollars requires his direct acceptance. Maybe he will accept that couch fans raised money for.

Jalopnik published the email in its entirety, and the bit at the end about sessions is worth reading. This is just part of it:” Excessive meetings are the blight of big companies and almost always get worse over time. Please get of all big meetings, unless you’re certain they are providing value to the whole audience, in which suit keep them very short .”

Tesla has yet to respond with a comment.

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Tesla earnings show record revenues with record losses

Tesla reported its Q1 2018 earnings today, posting adjusted losses of $3.35 per share with revenues on $3.4 billion. This is technically a beat, as analysts expected Tesla to report a loss of $3.48 a share with revenues of $3.22 billion, up from $2.7 billion a year ago.

Tesla also ended Q1 with $2.7 billion in money, down from $3.4 billion in money at the beginning of the year.

This quarter, Tesla’s net losses were a record $784.6 million ($ 4.19 per share ). So, while it’s revenue was higher than ever before, it also reported record losses.

In September 2017, Tesla stock hit a record high of $389.61 a share. At marketplace close today, Tesla was trading at $301.15. In after-hours, Tesla is trading around $287.

In its letter to investors, Tesla some updates to its Model 3 production , noting it made 2,270 autoes produced in week for three straight weeks in April.

” Even at this stage of the ramp, Model 3 is already on the cusp of becoming the best-selling mid-sized premium sedan in the US, and our deliveries continue to increase ,” Tesla CEO Elon Musk and CFO Deepak Ahuja wrote in a letter to investors.” Consumers have clearly shown that electric vehicles are simply more desirable when priced on par with their internal combustion engine challengers while offering better technology, performance and user experience .”

Model 3 production updates

Just as Tesla did in Q1, it plans to take planned downtime as part of its Model 3 production process. Prior to the downtime in April, Tesla said it had reached a record of producing 4,750 Model 3 vehicles in two weeks.

Once Tesla reaches its ideal production rate of 5, 000 Model 3 vehicles per week, which the company was expected to do within about two months, the plan is to increase that goal to 10, 000 Model 3 automobiles produced per week.

” In the end, this is all about having mills that are rendering the world’s highest quality vehicles as quickly and as cost-effectively as is practicable, and with as close to zero injuries as we can possibly get ,” the investor letter states.” Our automation strategy is key to this and we are as committed to it as ever .”

However, Musk have already been told that Tesla over-relied on automation for the production of Model 3 cars. That’s something he still stands by, telling Tesla mistakenly added” too much automation too quickly” early in the process.

Musk and Ahuja added 😛 TAGEND

In those select areas where we have had challenges ramping fully automated procedures, such as portions of the battery module line, part of the material flow system, and two steps of general assembly, we have temporarily dialed back automation and introduced certain semi-automated or manual process while we work to eventually have full automation take back over.

Model S and Model X demand is “very strong”

Tesla Model

Although much attention has been paid to the Model 3, Tesla said demand for the Model S and Model X is still quite strong. In Q1, Tesla had its highest order number ever, with demand exceeding supplying. Tesla said it rendered 24,728 Model S cars and X vehicles, while delivering a total of 21,815 of them.

” Short-term operational and logistical issues led to an increase in the number of Model S and Model X vehicles in transit to customers at the end of Q1 ,” the letter states.

Looking forward into Q2, Tesla expects Model S and X deliveries to be similar to the ones in Q1. But Tesla said that number will increase in Q3 in order for Tesla to hit its goal of 100,000 deliveries for 2018.

Tesla expects to be profitable in Q3

Assuming Tesla hits its 5,000 Model 3 vehicles produced in week objective, Tesla expects to be profitable in Q3 and Q4, omitting non-cash, stock-based compensation. Tesla also expects to achieve full GAAP profitability in Q3 and Q4 as well.

Analysts, regulators and customers alike have been paying close attention to Tesla over the past few months. In March, a Tesla owner died following a automobile crash that involved the Model X’s Autopilot mode. In April, after cooperating with the National Transportation Safety Board for the investigation, the NTSB removed Tesla as a party. That’s because the NTSB was unhappy with the way Tesla released information pertaining to the accident to the public.

“The NTSB took this action because Tesla transgressed the party agreement by releasing investigative datum before it was vetted and confirmed by the NTSB, ” the NTSB wrote in a press release. “Such releases of incomplete information often lead to speculation and incorrect assumptions about the probable cause of a accident, which does a disservice to the investigative process and the traveling public.”

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Tesla posts record $710m net loss as it struggles to produce Model 3 cars

Elon Musk get testy with analysts amid concerns over companys future, after it burned through $745.3 m in money during important quarter

Tesla posted a record $709.6 m net loss in the first quarter and burned through $745.3 m in money while struggling to crank out large numbers of its Model 3 mass-market electric car.

The loss and cash burn announced Wednesday raised questions about the company’s future and whether it would be able to pay all of its bills by early next year without more borrowing or the other round of stock sales.

During a sometimes-testy conference call with analysts, Tesla’s CEO, Elon Musk, conceded that criticism was valid but said it was ” quite likely” the company would make money and have positive cash flow in the third quarter.

” It’s high time we became profitable ,” told Musk, who also promised restructuring this month to attain earning goals.” The truth is you’re not a real company until you are, frankly. That’s our focus right now .”

But Tesla investors dedicated a rare rebuke to Musk after he cut off analysts asking about future gain potential, sending shares down 5% despite promises that production of the troubled Model 3 electric car was on track.

Tesla stock was little changed after the earnings announcement but fell during a conference call with analysts, when Musk began cutting analysts’ topics short, expensing Tesla over$ 2bn in market capitalization.

” These questions are so dry. They’re killing me ,” Musk told after an analyst asked what percentage of Tesla 3 reservation holders have started to configure options for their vehicles, an indicator of how much gain Tesla will be able to wring from the vehicles. Another analyst asked about a capital requirement before being cut off.

He then took several questions in a row about plans for a self-driving vehicle network and other long-term projects from the host of a YouTube channel focused on investing, praising the questions as not boring.

Tesla said its net loss amounted to $4.19 per share. Excluding one-time expenditures such as stock-based compensation, the company lost $3.35 per share. Revenue grew by 26% from a year ago to $3.4 bn.

The giant loss in a critical quarter for the 15 -year-old company fell short of Wall Street estimates. Analysts polled by FactSet expected an adjusted loss of $3.54 per share. Revenue, however, exceeded estimates of $3.28 bn.

In April, Tesla said it would not need to return to marketplaces for more capital because it expected to generate cash from sales of the Model 3. But it has had trouble getting them out the door to several hundred thousand people who put down $1,000 deposits to order one.

Moody’s Investor Service downgraded Tesla’s debt into junk province back in March, alerting at the time that Tesla didn’t have money to covering $3.7 bn for normal operations, capital expenses and debt that come due early next year. At the end of last year the company had a total of $9.5 bn in long-term debt.

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A Tesla Model 3 at an auto show in China. Photograph: Roman Pilipey/ EPA

” The negative outlook reflects the likelihood that Tesla will have to undertake a large, near-term capital raise in order to refund ripening obligations and avoid a liquidity shortfall ,” Moody’s wrote in a note to investors.

Tesla has had only two profitable quarterss in its virtually eight years as a public company.

The key to raising money to cover-up expenses is production of the Model 3 mass-market electric car, which starts at $35,000 but can easily top $50,000 with options.

Musk said the restructuring would involve getting rid of third-party contractors that have grown out of control.” We’re going to scrub barnacles on that front ,” he said.
He admitted that Tesla made a mistake by adding too much automation too quickly at the factory.

The plant has missed Musk’s forecasts by a wide mark. When production started last summer he promised to build 20,000 Model 3s during the course of its month of December. Instead, Tesla induced merely 2,425 during the course of its entire fourth quarter.

Then Tesla forecast 10,000 Model 3s per month at the end of the first one-quarter. As it turned out, only under 9,800 were assembled from January through March, Tesla said in April. The Fremont, California factory was shut down for four or five days last month to clear production bottlenecks, Tesla said.

The company, which also makes solar panel, predicted in April that production would climb rapidly through the second one-quarter and reach about 5,000 vehicles per week- which would return Tesla to its originally promised 20,000 per month rate- around the end of June. It predicted high marketings and strong cash flow in the third one-quarter.” As a outcome Tesla does not require an equity or indebtednes create this year, apart from standard credit lines ,” the company said.

The Model 3 is the most important piece of Tesla’s plan to become a mainstream automaker. At one point it had more than 500,000 potential purchasers on a waiting list. But in April the company conceded that some had canceled, although women refused to give numbers. Tesla said reservations “remained stable” through the first quarter.

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Tesla shareholder wants to remove Elon Musk from chairman position

Ahead of Tesla’s annual stockholder meeting in June, stockholder Jing Zhao has submitted a proposal to replace the board’s chairwoman, Elon Musk, with an independent director. Musk, the chief executive officer at Tesla, has been chairman of the board since 2004.

” Although the present leadership structure, in which the positions of Chairman and CEO are held by one person, could provide an effective leadership for Tesla at the early stage , now in this much more highly competitive and rapidly changing technology industry, it is more and more difficult to oversee Tesla’s business and senior management( especially to minimize any potential conflicts) that may result from combining the positions of CEO and Chairman ,” Zhao wrote in his proposal.

Zhao, who holds 12 shares of the company’s common stock, also noted Musk’s stances at SolarCity and SpaceX, and how Musk’s involvement could lead to conflicts down the road. But the likelihood of this happening is slim to none.

And the board has already expressed its opposition, recommending a vote against this proposal. In its statement, the board says Tesla’s success would not have been possible without Musk at the helm of both the board and the company itself.

” In lighting of the considerable future a chance for growth and the careful execution needed for the Company to achieve it, the Board believes that the Company is still best served by Mr. Musk continuing to serve as Chairman ,” the board stated.” Furthermore, the role of the Lead Independent Director protects the Company against any potential governance issues arising from a non-independent director serving as Chairman. This position is vested with broad authority to lead the actions of the independent directors and communicate regularly with the Chief Executive Officer. Additionally, the Company now has seven independent directors following the addition of two additional independent directors in July 2017.”

I reached out to Tesla for remark and the company directed me to the board’s response. Here it is in full 😛 TAGEND

The Board believes that the Company’s success to date would not have been possible if the Board was led by another director lacking Elon Musk’s day-to-day exposure to the Company’s business. In sunlight of the significant future a chance for growth and the careful execution needed in order for the Company to achieve it, the Board believes that the Company is still best served by Mr. Musk continuing to serve as Chairman.

Moreover, the role of the Lead Independent Director protects the Company against any possible governance issues arising from a non-independent director serving as Chairman. This position is vested with broad authority to lead the actions of the independent directors and communicate regularly with the Chief executive officer. Additionally, the Company now has seven independent directors following the addition of two additional independent directors in July 2017. The Board believes that the broad authority of the Lead Independent Director and the presence of six other independent directors ensures that the Board acts independently. This current Board structure also is consistent with majority practice at large public companies: according to the 2017 Spencer Stuart Board Index, 72% of companies in the S& P 500 do not have an independent board chairman.

The proponent acknowledges that a combined Chief Executive Officer and Chairman is an effective kind of leadership for an early-stage company, until it faces increased competition and rapid technological changes. The Board believes that it is precisely during times when a company must speedily adapt to constant change and outside pressures that Board leadership needs to be lockstep with the Company’s operations. Our accomplishments to date notwithstanding, the Company is still at a phase in its development where we must execute well in order to realize our long-term goals, and separating the roles of Chief executive officer and Chairman at this time would not serve the best interests of the Company or its stockholders.

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Elon Musk says humans are underrated, calls Teslas excessive automation a mistake

In a rare mea culpa for the mercurial billionaire, Tesla CEO Elon Musk acknowledged that the company has been too reliant on robots for production.

” Excessive automation at Tesla was a mistake ,” Musk wrote, responding to a Wall Street Journal reporter’s tweet.” Human are underrated .” He also talked about this with CBS News’ Gayle King, adding” we had this crazy, complex network of conveyor belts….And it was not working, so we got rid of that whole thing .”

Tesla has faced mounting public pressure amid a production slowdown for its Model 3, its lower-priced car. The company lately revealed that it missed its target to produce 2,500 cars a week, disappointing investors.

The uncertainty has resulted in a volatile stock. A month ago shares were trading at $340 and then slid to $252. Things have started to recover now that Musk says the company will be profitable and cash flow positive in the third quarter .

This was also revealed in a tweet that Musk wrote to The Economist on Friday.

There’s ” no need to raise money ,” he added. Shares closed Friday at $300.34.

The company has a market cap of $50.7 billion. By comparing, Ford Motors has a market cap of $45 billion.

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Tesla voluntarily recalls 123,000 Model S vehicles

If you own a Model S constructed before April 2016, you’re probably going to want to swing by a trader and get onto checked out…

Tesla has just issued a voluntary recall for 123,000 Model S vehicles, having found that the power steering bolts in some were displaying” excessive corrosion .” Model X and Model 3 vehicles aren’t affected here , nor are Model S constructed after April 2016.

The company says that the corrosion is principally being carried out in autoes driven in particularly cold climates, but isn’t limiting the recall to those cars( because, well, who knows where you’ll be driving it a few years from now ).

In an email outlining the recall to affected proprietors, Tesla notes that swapping out the bolts will” take around an hour ,” and that no accidents or injuries are believed to have been caused by this issue.

This isn’t the first time Tesla has issued a remember, but it’s their biggest recall to date. It recalled around 53,000 Model S and Model X vehicles in April of last year due to parking brakes who are likely get stuck in the “on” position; a few months later, it remembered 11,000 Model X because of a faulty cable in the second-row seating.

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Elon Musk just took charge of Model 3 production, saying its his most critical job right now

You can probably argue over whether it’s a good or a bad sign, but Tesla CEO Elon Musk confirmed on Twitter today a report in The Information that he has taken over direct control of the division that’s making Tesla’s Model 3 electric sedan after the company failed to meet the delivery objectives it had set.

Specifically, Tesla had intended to produce 500 Model 3 vehicles per day, or 2,500 per week, by the end of last month. But according to a company-wide email to employees that was sent today and obtained by Jalopnik, Musk said Tesla has been building closer to 2, 000 of the cars per week.( Musk calculated last July that Tesla would be stimulating 20,000 of the cars per month by December .)

In his email — fired off at 3 am. PDT — Musk added that if” things go as planned today, we will comfortably exceed that number over a seven day period! ”

Musk may have been referring in part to the reorganization. But while The Information reported that Musk had seemingly” pushed aside the company’s senior vice president of engineering, Doug Field, who had been overseeing manufacturing in recent months ,” Musk quickly took issue with that characterization of events.

He complained on Twitter to Information reporter Amir Efrati,” Can’t believe you’re even writing about this. My undertaking as CEO is to focus on what’s most critical, which is currently Model 3 production. Doug, who I regard as one of the world’s most talented engineering exec, is focused on vehicle engineering .”

Musk continued, tweeting:” About a year ago, I asked Doug to manage both engineering& production. He agreed that Tesla required[ engineering and production to be] better aligned, so we don’t design autoes that are crazy hard to build. Right now, tho, better to divide& subdue, so I’m back to sleeping at factory. Car biz is hell …”

That Musk is feeling sensitive to press reports right now won’t come as a surprise to anyone who follows the company, given the string of negative advertising that Tesla has received in recent weeks.

In addition to a voluntary remember of 123, 000 Model S vehicles that owes to a problem with the power-steer component of some of the cars, the National Highway Traffic Safety Administration last week launched an investigation into the role of Tesla’s Autopilot in a fatal crash.

In fact, in a series of separate tweets today, Musk responded to the National Transportation Safety Board, a security bureau that said it was ” unhappy” with Tesla’s decision on Friday to publish a blog post about the accident, given that investigations are ongoing.

In that post, Tesla said the driver, since identified as an Apple engineer,” had received several visual and one audible hands-on alerting earlier in the drive and the driver’s hands were not detected on the wheel for six seconds prior to the collision .” The company also noted that a highway security roadblock that might have mitigated the impact of the collision had been” crushed in a prior collision without being replaced .”

The suggestion was plainly that Tesla can’t be blamed, at the least not entirely, for the fatality.

In response to the NTSB’s newly public frustration over the release of these details by Tesla, Musk wrote on Twitter today,” Lot of respect for NTSB, but NHTSA governs automobiles , not NTSB, which is an advisory body. Tesla releases critical accident data affecting public safety instantly& always will. To do otherwise would be unsafe .”

Tesla closed down 5.1 percentage at $252.48 in trading today.

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Tesla says fatal crash involved Autopilot

Tesla has provided another update to last week’s fatal crash. As it turns out, Tesla said the driver had Autopilot on with the adaptive cruise control follow-distance set to minimum. However, it seems the driver dismissed the vehicle’s warnings to take back control.

” The driver had received several visual and one audible hands-on warning earlier in the drive and the driver’s hands were not seen on the wheel for six seconds prior to the collision ,” Tesla wrote in a blog post.” The driver had about five seconds and 150 meters of unobstructed view of the concrete divider with the crushed accident attenuator, but the vehicle logs show that no action was taken .”

The promise of Tesla’s Autopilot system to further reduce car collisions. In the company’s blog post, Tesla notes Autopilot reduces crash rates by 40 percent, according to an independent review by the U.S. government. Of course, that does not mean the technology is perfect in preventing all accidents.

As Tesla previously noted, the accident was so severe because the middle divider on the freeway had been damaged in an earlier accident. Tesla also cautioned that Autopilot does not prevent all accidents, but it does make them less likely to occur.

No one knows about the accidents that didn’t happen, only the ones that did. The the effects of the public not utilizing Autopilot, because of an inaccurate notion that it is less safe, would be extremely severe. There are about 1.25 million automotive demises worldwide. If the present safety level of a Tesla vehicle were to be applied, it would entail about 900,000 lives saved per year. We expect the safety level of autonomous autoes to be 10 times safer than non-autonomous cars.

In the past, when we have brought up statistical security points, we have been criticized for doing so, implying that we lack empathy for the misfortune that merely passed. Nothing could be further from the truth. We care deeply for and feel indebted to those who chose to set their trust in us. However, we must also care about people now and in the future whose lives may be saved if they know that Autopilot improves security. None of this changes how devastating an event like this is or how much we feel for our customer’s family and friends. We are incredibly sorry for their loss.

This development, of course, comes in light of a fatal accident involving one of Uber’s self-driving cars in Tempe, Arizona.

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Tesla car that crashed and killed driver was running on Autopilot, firm says

Company says driver took no action despite systems warns in latest collision involving self-driving technology

Tesla has said a auto that crashed in California last week, killing its driver, was operating on Autopilot.

The 23 March crash on highway 101 in Mountain View is the latest accident to involve self-driving technology. Earlier this month, a self-driving Volvo SUV that was being tested by the ride-hailing service Uber struck and killed a pedestrian in Arizona.

Federal examiners are looking into the California crash, as well a accident in January of a Tesla Model S that may have been operating under the Autopilot system.

In a blogpost, Tesla said the driver of the sport-utility Model X that crashed in Mountain View, 38 -year-old Apple software engineer Wei Huang,” had received several visual and one audible hands-on warning earlier in the drive and the driver’s hands were not detected on the wheel for six seconds prior to the collision.

” The driver had about five seconds and 150 meters of unobstructed view of the concrete divider … but the vehicle logs show that no action was taken .”

Tesla also said the concrete freeway divider had previously been damaged, increasing its impact on the car. The vehicle also caught fire, though Tesla said no one was in the vehicle when that happened.

The company said its Autopilot feature can keep velocity, change lanes and self-park but necessitates drivers to keep their eyes on the road and hands on the wheel, in order to be able to take control and avoid accidents.

Autopilot does not prevent all accidents, Tesla said, but it does construct them less likely.

” No one knows about the accidents that didn’t happen ,” Tesla said,” merely the ones that did. The the effects of the public not using Autopilot, because of an inaccurate faith that it is less safe, would be extremely severe.

” There are about 1.25 million automotive demises worldwide. If the current safety level of a Tesla vehicle were to be applied, it would mean about 900,000 lives saved per year .”

The company added that it” care[ s] deep for and feel[ s] indebted to those who chose to put their trust in us. However, we must also care about people now and in the future whose lives may be saved if they know that Autopilot improves security.

” None of this changes how devastating an event like this is or how much we feel for our customer’s family and friends. We are incredibly sorry for their loss .”

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Tesla Semi does its first production cargo run with batteries on board

Tesla is putting its new electric Semi to work, with its first operate as a “production” vehicle — for a familiar client. Tesla itself is the customer, as the trucks were equipped with trailers loaded up with battery packs fresh from the Gigafactory assembly line, heading to the Tesla Fremont car factory in California.

Elon Musk shared an image of the trucks at work, with both the matte black version and the silver one with the aero hood, which presumably are the same they depicted off at the official unveil( they’re the same colour, at the least ). The trucks had full-size trailers attached, which is not what they’ve been equipped with during previous sightings.

The trip from the Gigafactory to the Fremont factory is around a four-and-a-half hour journey, encompassing around 260 to 270 miles. It’s not exactly a long haul, but it could be something that’s still very useful to a large number of customers, and it’s a journey that Tesla itself has to induce regularly with its own transport fleet for this very purpose.

Tesla calls this a “production” run, but its target for actually rendering these still seems to be 2019, with a likely delivery time frame more like 2020. Still, this cargo operate should provide valuable info to the company as it moves ahead, especially now that it has a sizable backlog of client pre-orders to deal with.

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