All Financial Wisdom

The Tesla numbers of 2017 are not good, while the competition gets the batteries

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Lost in the shuffle of all this cryptomania (admittedly, we get caught up in the hype and are late on the importance of this story) is Tesla. Tesla recently published the sales and delivery of vehicles in 2017 and their numbers are not good, despite the image they want to sell. They tried to say that Tesla has improved a lot in the manufacture of the Model 3 and that it is close to achieving its goals.

Actually, not so much. It is true that Tesla has managed to accelerate the manufacturing of its economic model, the Model 3. It is true that it is finally beginning to build this car at a decent pace, but still, Tesla again failed to meet its objectives in the manufacture of the Model 3, for the second time in a car that was going to start delivering in the third quarter of 2017.

Deliveries of Tesla 2017, it’s not gold that glitters

During the fourth quarter of 201,7 Tesla was only able to deliver 1550 Model 3. Although no one expected Tesla to deliver the 5000 vehicles per week by the end of 2017, the average among the experts consulted by Bloomberg was 2,917. Also in the third quarter of 2017 1,500 were expected to be delivered, but only 222 Model 3s were delivered.

By the way, some customers are not very happy with the Model 3s they are delivering to them. Tesla claims to have delivered more vehicles in 2017 than in 2016, specifically 33% for a total of 101,312 Model S and Model X. But as Zero Hedge points out, in the fourth quarter of 2017, they delivered 24,565 vehicles (models S, X and 3 ), while in the 2016 period it delivered 24,882. That is, their deliveries of this last quarter have been 1% lower.

Tesla says that in the last week of 2017 reached some Model 3 numbers very similar to the target, more than 1,000 a week. Due to the drop in the total production mentioned above, one wonders if in the manufacturing line they are diverting resources from the production of the Model S and the Model X to the manufacture of these Model 3s, with the aim of accelerating the production of the Model 3. I do not blame them, to begin with, because with the Model S and the Model X they are losing money.

In fact, according to Bloomberg, Tesla burns around 8,0000 dollars a minute, or 480,000 dollars an hour. This amounts to 16 million a day, and in the quarter of 1.4 billion dollars, let’s keep this figure because we will use it later in our analysis.

In addition Tesla has a problem, other manufacturers are stepping and have a lot of experience making cars, unlike Tesla who prefers to do things its way.

Are the other manufacturers taking the electrical lead?

So far Tesla has been considered the manufacturer that is leading the electric change, the manufacturer that will electrify the garages of middle and upper-middle class families. It’s possible? The truth is that when we go to review it, it is not so clear.

To begin with, there is already an economic vehicle that sells more units than the Model 3, the Chevrolet (Chevy) Bolt. If Tesla has managed to deliver 2,500 Model 3, Chevrolet with a vehicle of similar characteristics is getting better numbers. Only in December, the Chevrolet Volt sold more units than Tesla Model 3 throughout its history. 3,227 Bolts versus 1,060 the Model 3 were sold.

It is true that Tesla has hundreds of thousands of Model 3 pre-reserved, but it is also true that these consumers may get tired of waiting, recover the 10,00 dollars that they have lent to Tesla and leave to the dealer of all life, for a different Chevy from the rest. Since they began delivering the first Model 3, they have sold more than 15,000 Bolts.

But is Tesla still the top-selling electric premium manufacturer? The truth is that it depends how you look at it. In 2017, BMW sold more than 100,000 electrified vehicles, (electric and plug-in hybrids). It is true that it is not exactly the same and that BMW is not as successful with its i3 as Tesla, but it is also true that the sales of these vehicles last year were 60,000, that is, has achieved a growth of 60% compared to 33% that Tesla has achieved. In addition, the German brand aims to sell more than 500,000 annually for 2020.

What does Elon Musk do while the other manufacturers eat his lunch?

While Elon Musk is not exclusively dedicated to Tesla, but also makes space rockets in Space X, the fact is that Elon Musk seems to be increasingly dispersed with his other projects. Let’s start with The Boring Company, through which you want to dig tunnels in Los Angeles that save the travel times created by traffic jams on highways or HyperLoop.

The truth is that Tesla, in addition to not producing the Model 3 at the expected pace, does not stop presenting new projects and models. Let’s start with the trucks you have presented or the new Tesla roadster, whose sports version should get accelerated from 0 to 100 in just 1.9 seconds. It is not wrong to present new products and at least get the attention of the media, but it is also true that at some point you have to make a car, change it to the customer for money, and repeat this action thousands of times a week.

Meanwhile, Tesla will not start manufacturing the Model 3 at a rate of 5,000 units per week until mid-2018. That means that at the current rate, Tesla will have spent $2.8 billion more to start being profitable, although according to Bloomberg, by then Tesla will have run out of cash

Even so, it is a more realistic goal, although it remains to be seen if they will be able to achieve it. Although it does not matter if you produce cars so quickly that 90% of them do not pass your quality controls and have to be fixed before being delivered to the customers.

So Tesla’s future does not look good. A boss very dispersed with several projects (it seems that he is bored with making cars), a production line that doesn’t really work. Will investors continue holding this pace? What will happen if Tesla requires more cash because it is delayed again in its production objectives? Time will tell.


  1. Panda

    April 17, 2018 at 12:27 pm

    The biggest advantage that Tesla has over its competitors is it’s Supercharger network. Big Auto is clueless about how to respond to Superchargers.

    Their initial response by installing DCQC at dealerships that are “available during regular business hours, and closed on holidays and weekends” is pathetic. Not to mention frequent breakdowns which are rarely repaired, religiously blocked by dealers themselves, powered off from inside dealerships, and even locked with pad locks.

    Anyone opting for Big Auto’s EVs, instead of a Tesla (in the same price range/segment) are going to disappointed, especially if they require long distance travel and don’t own another fossil fuel burning car.

    • ADMIN2

      April 17, 2018 at 8:06 pm

      Sad, but true. Tesla is nowhere near becoming a mass market company. They are for the elite.

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