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Home / Business / Tesla continues to focus on financial stability and production throughput in the second quarter

Tesla continues to focus on financial stability and production throughput in the second quarter



Batteries

Published on 4 June 201

9 |
by Kyle Field

4. June 2019 by Kyle Field


Elon Musk, CEO of Tesla, went on to podcast Ride The Lightning with Tesla enthusiasts and IGN editor-in-chief Ryan McCaffrey for a one-hour interview. The topics ranged from the Tesla pickup to the Model Y and even dealt with the possibility of a future Tesla app store.

In his conversation with McCaffrey, Musk highlighted key priorities for Tesla over the next few months. Commenting on the exciting new projects the company is working on, he spoke of a renewed push within the company to stabilize the throughput of its automotive lines. Stable production throughput and stable production reliability are the basic requirements that every manufacturing company seeks. This applies in two ways to a market-leading company such as Tesla, which generates the largest share of its sales with automobile sales.

1 – Tax Responsibility

Tesla is in good financial shape, "said Musk. The admission that financial stability is a top priority for Tesla can be attributed to Musk's bold statements from last year that the company would achieve sustainable quarterly profitability starting in the third quarter of 2018. Although it was profitable for the third quarter and again for the fourth quarter, it lost the delivery of the automobiles for the shipment of the Model 3 to Europe and China in the same quarter, in which the repayment of a bond in the amount of 920 million US dollars due was, the company at the time of the ID card has driven back into the red.

At the beginning of the second quarter, the company sought and found a fresh wind with a capital increase of $ 2.3 billion. After the raise, Musk sent an e-mail to the staff who later leaked out, warning employees to maintain their financial vigilance following the new cash injection. The letter was misinterpreted by the mass media as a statement of the inevitability of bankruptcy, but was in fact just a reminder to Tesla's employees about the fundamentals of doing business. Our own Zachary Shahan summarized the meme lord's email as follows:

" Hey, folks from Tesla, I know that you've seen that we've only raised a few billion dollars, but have not become complacent That does not mean you can throw money around carelessly, we still have to be on the lookout for ways to cut costs and become a more efficient business. "

There was no vocabulary in Elon's e-mail read, but somehow the mass media succeeded in rendering it inaccurate and exposing their evils in the direction of Tesla.Zach's interpretation of the e-mails was confirmed shortly after publication by a tweet by Elon, who, as you can see, was one of his shortest

2 – Stable production

The stabilization of production is sometimes an afterthought in a company focused on continuous production Improvement ng, but it came as a top priority for Musk. Why? Because the Tesla Model 3 production lines are proverbial aircraft that are built during the flight. Tesla made every effort to get the Model 3 production running in 2017-2018 and reunited the troops to increase production to a rate of 5,000 vehicles per week. (Tesla President of Automotive Jerome Guillen spoke with CleanTechnica about this in March of this year.)

Today, production is consistently over 5,000 vehicles per week, but the rapid pace of the last 2 years is over little time to think about.

Musk and Team Tesla take a break and take a deep breath as they stabilize production lines in Fremont before ramping up Model 3 production at Gigafactory 3 in Shanghai, China. later this year. Immediately thereafter, the team will do it all again by ramping up production lines for Model Y at the Fremont plant or at Gigafactory 1 (more later) and Gigafactory 3.

Fremont's More Polished and Optimized Model 3 The production lines run better before Gigafactory 3 puts its equipment into operation. This applies in two ways to the Model Y. Any improvement that can now be made saves three times the pain in the whole line. In business, that means cash. It is cheaper to fix the problem now than it will be to fix 4 times if a problem occurs next year. It's just a good deal to take a break to trim rough edges, and that's what Musk and his team do.

3 – Delivering an Experience

As difficult as it may have been, it was not a stable throughput, and Tesla's performance lowered its claim to profitability in the first quarter. The conversion of all these vehicles into cash happens only when the cars get into the hands of the customers. Musk told McCaffrey that Tesla intends to iron out the kinks in his delivery process to go beyond such challenges.

This is clearly a statement about Tesla's recent bridgehead markets in the EU and Asia. Setting up and improving the delivery process will continue to be a focus of the company, as the company regularly transfers the Model 3 distribution to new countries. Tesla had set up a good delivery process for its S and X models around the world, but the Model 3 is another beast altogether. On the one hand, in the EU, the model 3 is delivered fully assembled to the continent, which is not the case with the S & X. Equally effective, Model 3 is the first of Tesla's few mass-produced vehicles, and this has posed new challenges for the North American delivery teams last year as they tackled the growing problems of delivery hell.

( Editor's note: Tesla is not the only company involved.) I spoke to someone today who owns a vehicle delivery company in the US, and he found that the cost of shipping one California cars have risen by about 50% as Tesla has devoured vehicle delivery capacity and even some vehicle delivery companies. )

4 – Increasing production efficiency

Tesla has a continuous improvement in the blood. This was the incentive for the team to build an electric car that is not only as good as combustion vehicles, but also an improvement. This desire to constantly improve the product, cheaper, better for the customer, more efficient, more comfortable or faster to implement in vehicles without real model years.

On the manufacturing efficiency side, Tesla is pushing ahead with the envelope. Musk has given a dramatic example of the model 3's rear frame. For the rear frame of the model 3, a mixture of 70 aluminum and steel parts must be put together at the moment. Tesla replaces all these parts with parts for a casting from a small casting machine, with which the company can initially only produce 4 parts. Tesla is already looking for a larger casting machine with which it would be possible to consolidate them into just one part. This not only simplifies the number of parts in the car and the number of defective locations can occur, but drastically simplifies the manufacturing process. The need to assemble, move, and eliminate about 70 parts means eliminating a small army of robots from Tesla's workshop. Less robots mean less investment for installing a new production line (I see you, Gigafactory 3). Each of these robots also requires a team of maintenance personnel, downtime, etc. This is a tremendous improvement and one of many that Tesla is undertaking to improve the efficiency of its production lines.

The plan for Model Y is to use as much of the Model 3 as possible. Early figures said model Y shares 76% of its parts with model 3. Elon told Ryan in the podcast: "We tried to make the car as similar as possible except to the extent that a change is necessary to achieve SUV functionality. "This shared DNA also means that Tesla can rethink its manufacturing process for the Y and take advantage of the fact that improvements to the Model 3 lines can be tested and used.

5 – Success in Shanghai

The construction of Tesla's Gigafactory 3 in Shanghai, China, continues to astound the global audience. The power of Chinese industry is presented on the global stage. The factory has evolved from a muddy plot to a fully constructed building and plans to produce cars in less than 12 months from the start of construction. GF3 will be Tesla's first factory outside of North America, using Chinese-made batteries for the first time. Musk told McCaffrey that "sticking to the Shanghai Gigafactory" is one of Tesla's top priorities in the near future.

Achieving the early goals for Gigafactory 3 is further proof of the world and to investors who can scale Tesla and make Tesla competitive in manufacturing and distribution in the largest private vehicle market in the world can. Gigafactory 3 will use the findings of Tesla from the ramp-up of the Model 3 to improve its production there.

Tesla enters unknown waters with Gigafactory 3, China's first wholly owned foreign car factory. It will not have the support of a company in a few hours or an army of 10,000 employees in Fremont, so the challenge is very real, but the advantage if Tesla can do it. The construction of cars in China could make it possible to use Chinese government incentives for plug-in vehicles, which may decrease.

6 – Model Y

Beyond the stabilization of manufacturing, delivery and new markets for the Model 3, we have the Y. The Model Y is expected to have a larger market than the Model 3 and Elon and his team are preparing for the launch next year. Musk told McCaffrey that the longest lead times for the Model Y are the dies for the outer body panels. These were the highest priority items that should be nailed down.

McCaffrey leaned towards Musk, where the Model Y is manufactured, and Musk said that either the Tesla Fremont car factory or the Gigafactory 1 in Sparks, Nevada, would work well. Fremont has the advantage of having all existing vehicle equipment on-site, and allows Tesla to share Model 3 joint production lines to some extent. At Gigafactory, Tesla would avoid shipping batteries, chargers and propulsion units from Nevada to California. Tesla has plenty of land to expand on and Nevada has a lower cost of living. With all that said, Musk said his team had convinced him that Fremont, despite his capacity shortages, was probably the most meaningful and the current standard plan.

For more details from the Ride The Lightning podcast, in which Ryan McCaffrey interviewed Elon Musk, check out the following video version or view it in your favorite podcast app. [19455940]


    
    

Tags: China, Elon Musk, IGN, Ride The Lightning, Ryan McCaffrey, Shanghai, Tesla, Tesla Factories, Tesla Finance, Tesla Fremont Factory, Tesla Gigafactory 3, Tesla Model 3, Tesla Model Y


About the Author

Kyle Field I'm a techie who is passionate about finding viable ways to reduce the negative impact of my life on the planet, save money, and reduce stress. Live intentionally, make conscious decisions, love more, act responsibly, play. The more you know, the less you need. TSLA investor.




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