Capital efficiency. It should not be surprising that a greenfield factory built in China based on a spec you iterated on in Fremont, CA results in a much higher $/Cars/Day, a.k.a capital efficiency. Iterating on a live line in Fremont, CA is significantly more costly. It's like $/sq ft. for renovating your house versus buying new.
Also, look at the flow diagrams they've published on the floor layout and the path through a factory a car takes to go from start to finish in Fremont vs. GF3. This is also why they're moving to Austin.
> By the way, what's a "delivery"? I don't think I've ever seen them define it.
Of course they define it. In their Annual Report, under a section titled "Critical Accounting Policies and Estimates", under a sub-section titled "Automotive Segment - Automotive Sales Revenue";
We recognize revenue on automotive sales upon delivery to the customer, which is when the control of a vehicle transfers. Payments are typically received at the point control transfers or in accordance with payment terms customary to the business.
It appears to be the same process. Reading junk on the internet the main process innovation they appear to have made appears is large scale die casting to produce entire chassis frames in a single aluminium part. This - like most "innovations" - is less an innovation and more adopting a known process with different tradeoffs, increasing initial capital outlay to obtain enhanced production speed and a simplified production process.
Capital efficiency. It should not be surprising that a greenfield factory built in China based on a spec you iterated on in Fremont, CA results in a much higher $/Cars/Day, a.k.a capital efficiency. Iterating on a live line in Fremont, CA is significantly more costly. It's like $/sq ft. for renovating your house versus buying new.
Also, look at the flow diagrams they've published on the floor layout and the path through a factory a car takes to go from start to finish in Fremont vs. GF3. This is also why they're moving to Austin.
> By the way, what's a "delivery"? I don't think I've ever seen them define it.
Of course they define it. In their Annual Report, under a section titled "Critical Accounting Policies and Estimates", under a sub-section titled "Automotive Segment - Automotive Sales Revenue";
We recognize revenue on automotive sales upon delivery to the customer, which is when the control of a vehicle transfers. Payments are typically received at the point control transfers or in accordance with payment terms customary to the business.
> and yet they build inventory. Very opaque.
I'm not sure what you're asking here.