Guest post by David Middleton
In a stunning setback to Stark Industries’ Tesla Motors’ effort to save the world from Hydra Gorebal Warming, hundreds of workers were fired in an effort to speed up production of the Iron Legion Model 3…
Tesla has reportedly fired hundreds of employees amid signs that the company is off to a slow start in manufacturing its crucial Model 3 electric car.
[…]
But the firings reportedly included engineers, managers, salespeople and factory employees.
The move comes as Tesla is aiming to rapidly expand production of its new mass-market Model 3. CEO Elon Musk had said the company would be making 5,000 cars per week by the end of the year, but that goal appears to be in jeopardy amid early stumbles.
[…]
Musk acknowledged on Oct. 6 that the company was facing “bottlenecks” in Model 3 production. He said Tesla was “diverting resources” to clear up the Model 3 production challenges, which was one factor in the company’s decision to delay its reveal of an electric semi-truck by about three weeks.
The company said in a Securities and Exchange Commission filing on Oct. 2 that “a handful” of its “manufacturing subsystems” have “taken longer to activate than expected.”
When a CEO issues production guidance that he knows to be false…
The Truth Is Catching Up With Tesla
CEO Elon Musk is a visionary, but there is a fine line between setting aggressive goals and misleading shareholders
Charley Grant
Oct. 7, 2017 2:02 p.m. ET
New revelations about Tesla Inc.’s production of the highly anticipated Model 3 sedan should shock, but not surprise, investors.
The Wall Street Journal reported Friday that Tesla has recently been building major portions of the Model 3 by hand. This comes less than a week after Tesla announced it fell short of its third-quarter production guidance of 1,500 cars by more than 80%.
[…]
The WSJ article goes on to say:
“There is a fine line, however, between setting aggressive goals and misleading shareholders.
Tesla is inching closer to that line. Tesla was making three Model 3s on an average day in the third quarter. Mr. Musk should have known in August, when production guidance was reiterated, that the company wasn’t going to produce 1,500 Model 3s by the end of September.”
When a CEO routinely issues production guidance that he knows to be false…
Leaving aside the technical issues that beset electric cars, electric cars will never go mainstream until two fundamentals are addressed. First, their high price. Second, their low resale value. The subsidies given to buyers does not adequately make up for this inherent problem.
Most people do not have the cash to buy a new car. Hence this purchase requires financing. However, financing is not an attractive option for the finance houses, since the resale value of the car is so low. It has little equity, once the purchaser drives the car off the forecourt.
Many finance deals lend money on the basis that the car will have a significant value in say 3 years time after purchase, but this is not so with electric cars. Most electric cars lose about 80% of their value within 3 years of purchase, and this is a major stumbling block to encouraging people to buy electric cars. In fact, some models depreciate by about 84% in just 3 years. Who in their right mind would buy a new electric when there are such high levels of depreciation?
Richard,
Thanks for that information which I was not aware of. Wonder why this issue is not more widely reported and known.
Of course the problem of a viable battery still remains elusive which provides significant range, despite considerable resources including manpower and $$$ having been thrown at its development for an auto. I often wonder if a better battery may never happen given all the failed efforts to date.
The battery may be one of the reasons the resale is so low.
Err no. It’s widely known
The issue is this:
if you buy a car for 30K and get a 7.5K tax credit, the cost is actually 22.5. So you can’t really compare the depreciation against the aquistion price you have to do it against the aquistion cost.
but even then they are tanking.
multiple reasons, battery, as you note, and others
https://blog.caranddriver.com/tesla-aside-resale-values-for-electric-cars-are-still-tanking/
When’s sombody gonna bring out one of these? The free piston linear generator (FPLG) looks like the answer to all the electric cars woes!
https://judithcurry.com/2016/11/02/vehicular-decarbonisation-two-new-technologies-to-watch/
I don’t understand the enmity toward Musk on this site. Unlike 99% of the commenters here, I’ve actually worked with him, way back in 2002 long before the first flight of the Falcon 1. He, Tom Mueller, and Tim Buzza spent a lot of time in Mojave working on the first tests of the gas generator for the Merlin engine, which were run on the XCOR 5K stand. We produced some prodigious clouds of black smoke…
SpaceX was a demanding but honest and fair customer, requiring us to provide reasonable documentation of the man hours and materials expended on the project. We moved forward quickly over several months. Elon didn’t ask anyone else to qork any harder than he did- but he did work long hard hours. In the years since more than a few of my proteges went on the work at SpaceX, and most are still there.
SpaceX is challenging all other launch providers with a superior product at a lower price point, and while they have contracts with NASA and the USAF, these were awarded competitively, not as earmarks from Congress. When the government of China complains to the UN about your company’s aggressively growing market share, I dare say you’re doing something right. When you’re taking flak, I guess you know you’re over the target…
Elon Musk will eventually run out of OPM and the corporate welfare checks will soon be a thing of the past. Tesla’s Federal tax credits will begin to phase out after they deliver they 200,000th PEV. Based on current forecasts, that will occur in Q3 2018.
There’s neither a rocket science nor a greenschist exemption to the effects of increasingly negative cash flow.
The hostility to Elon Musk is mostly due to his subsidy mining operations, and serious doubts about the technical viability of his product. His space enterprises seem rather more technically viable, but his financing is still dodgy.
Bell Labs did a great deal of science and engineering work that was exemplary, but that did not make ATT any less of a regulated monopoly providing mediocre service at a high price and acting as a cash cow for several layers of government, and “safe” investments to its owners.
Here is why he us not appreciated…
Tesla model S; a car driven by rich folk, paid for by middle class folk, driven for FREE on roads paid for by middle class and poor folk, often recharged on the backs of the middle class. ( see your local government building with the “free” charging station)
The incorrect facts on subjects from batteries, (production/availability), Electric cars in usage, recharging times, cost to run, resale values, (without checking the facts) and so on in here is astounding.
C’mon guys, shape up!
Personally I don’t give a monkeys cuss what the fuel is. As long as the car is like a Mercedes inside to drive & doesn’t end up with a high price per mileage (inc. depr’tn) with the end of its tenure with me.
I drive a Nissan Leaf. I don’t care how fast it recharges in town or at home. Cars are normally only driven a couple of percent of their whole lives, no matter what anyone says.. Rapid charging is on motorways where having a coffee snack and a pee takers half an hour. Doctors orders.
This car per mile equates to 142 (UK) mpg. Servicing is rolling gear, no engine. Very few consumables. (liquids & cabin filter every two years).
It cost me the same as an equivalently specc’ed ICE car. Had it 4 years, Mileage depreciation is 13%.
Have no plans to sell it. My daughter is expecting it as her first car when she passes her test. So I’ll update with the new 150+ mile Nissan Leaf or such.
Sure I’ve driven ICE cars since. I simply do not like vehicles with all that indefinable internal racket and driving effort any more.
‘Will Tesla Be A Zero This Month?’
https://seekingalpha.com/article/4114125-will-tesla-zero-month