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Most auto final assembly lines build about a car a minute. Running two shifts, 5,000 cars a week is about normal. If the line is running much below a car a minute, or is stopping much, something is very wrong.

It's not a fundamental problem. It's Musk trying to put an assembly line into service too fast. An assembly line is a custom-built machine about a thousand feet long. They take time to debug, and people who've done it before. Usually, most of the debugging takes place off-line in supplier factories before the final line is assembled in place. Tesla skipped that step to save time.

Doing it that way is insanely expensive. The operating costs are roughly constant regardless of the number of cars that come out, so debugging while producing means a huge cost per car.




Likely it was his only option. Delaying shipping the car by 6 or 12 months (arbitrarily-chosen numbers) was simply a non-starter for, I'm sure, cashflow reasons.

Even if this means it takes 2-3x as long to get up to full production rate, from an investor standpoint, this was likely a necessary evil.


Tesla only shipped 260 Model 3’s in Q3. Now they’re approaching 1000 cars a week.

http://h4labs.org/tesla-is-approaching-1000-model-3s-a-week/


Cars produced in the last seven days of the quarter is a somewhat gamable metric. They may or may not be sustaining production at that rate.


The good numbers come from DMV registrations. There are industry sources which collect that data weekly.[1]

[1] https://hedgescompany.com/automotive-market-research-statist...


While you are correct this is a very gamable metric, its nonetheless a good sign of considering the number of cars they were previously producing.


> It's Musk trying to put an assembly line into service too fast.

He doesn't have much choice. The company is over leveraged 7 to 1. With Feds slowly increasing the interest rates, Tesla's interest obligations will start to balloon as well. So they need to start selling more and more cars. That requires a big assembly line.


It's only insanely expensive relative to the financing cost structure of traditional companies. If you view Tesla as a high growth tech startup, with an insanely cheap way to raise capital, you can say they are spending very little money to generate such high revenue growth rates, especially compared to say Uber.


Insanely cheap? They had to borrow money (as opposed to selling shares) at 5.3% interest last year. Those bonds currently trade at about 5.9% interest (https://www.bondsupermart.com/main/bond-info/bond-factsheet/...)

If they need more money, they would either need a very good story, or pay more interest (“Production pushed back again” is not “a very good story”)

Tesla is a stock that may bring big profits, but that is not without risk.




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