Agree….risk is totally there. No legacy manufacturer was willing to sink the dollars nor able to since shareholders wouldn’t tolerate such a venture. Just like amazon was able to stake the new frontier, Tesla has grabbed with it’s giga factory. That is the main play of the entire scheme to profitability and sustainable production of an ‘affordable’ mass market car.
Nummi has the capabilities to produce 400,000+ vehicles so the production site isn’t the issue. It’s ironic that the main issue to the rampup was TOO much automation on the battery pack production. The second production line is coming online in June so that’s going to allow the assembly line to push past the
20,000 per month goals.
Tesla has been able to sell all those Zev credits and probably will have even more market as Cali cranks up the percentage beyond 2.5% and the legacies can’t count hybrids anymore and even the phev is reduced unless it has a significant battery….hence the Toyota Prius. prime introduction and just cutting it for credit. The market is there for carb zev and that’ll help the bottom line.
Does Tesla have a financial challenge? Absolutely. It also had a product that folk are willing to but and pay a premium and working out (slowly and painfully) the manufacturing kinks. I doubt Tesla will have troubles fund raising.
As folk have pointed out the tesla s is a bit dated, yet sales have remained stable despite a 8 year bodyframe. What vehicle has done that? The refresh will come when they get Tesla 3 batterypack rampup completed as the new Tesla s will use that new battery form too. The largest capital expansion is behind them now (gigafactory built) and build out costs will be significantly lower. It’s about cranking up production now….devil in the details…..but this is the guy who lands rockets on moving floating barges
Amazons debt was always low/stable, but recently increased (as has their cash flow, etc...), so not comparable really. The giga factory was a mistake from a manufacturing and longevity process, not bad for a cash grab.
Everyone figured out how to build cars in the 80s/90s. Its ironic that Tesla is in the Nummi factory where lean manufacturing was brought to this country by Toyota. Toyota learned about too much automation being trouble in the 80s. Tesla is a tiny fraction as productive as GM with their first go at Nummi, and will likely never get to where they ended up in a couple years.
Likewise I dont see them retooling the factory for a newer version of their cars when thats incredibly expensive and they just cant afford it. Every issue Tesla has had, was easily and rightly predicted by anyone with knowledge of the car industry. The only thing they couldnt know was how great a financier Musk was.
Today, Tesla is having the same frustrating experience. Tesla is manufacturing its cars at a plant in Fremont, California, that was formerly a famous GM/Toyota joint factory called NUMMI. According to Automotive News, NUMMI had 2,470 employees in 1985, its first year in operation, and produced 64,764 cars. By 1997, it had 4,844 workers and produced 357,809 vehicles.
By contrast, Automotive news estimates that Tesla has somewhere between 6,000 and 10,000 workers in 2016 (the San Jose Mercury News said it was "about 10,000" last year) and manufactured just 83,922 vehicles. That means Tesla's plant in 2016 was less than half as productive, on a per-worker basis, as it was during the first year of GM management—and less than one fifth as productive as it was during NUMMI's heyday in the 1990s.
I wish Tesla was a better company, the cars are very cool and the idea is great. The company is awful however, theres just no getting around it.
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