Interesting read:

http://www.businessinsider.fr/us/tesla-model-3-scrap-waste-high-gigafactory-2018-5

Tesla, the electric-car company helmed by the billionaire Elon Musk, is generating an incredible amount of waste in an effort to manufacture parts for the Model 3 at its Gigafactory in Nevada.
Documents reviewed by Business Insider show that scrap at the Gigafactory may have cost the company at least $150 million.
Tesla told Business Insider that $150 million was an overstatement.
The company's attempt to ramp up Model 3 production has also led it to cut key parts of production, like ensuring that car parts are traceable.

I think the autopilot problems are just a small part of Tesla's problems....

Business Insider is clickbait extreme. I don't doubt that there are glitches, but AFIK Musk has enough financial resources to ride these problems out.

salttee wrote:

Business Insider is clickbait extreme. I don't doubt that there are glitches, but AFIK Musk has enough taxpayer funded government subsidies financial resources to ride these problems out.

I fixed that sentence for you.

If he keeps dating Grimes we might end up with a 2018 version of the Delorean.

You know, because of the cocaine.

Olddog wrote:

Interesting read:

http://www.businessinsider.fr/us/tesla-model-3-scrap-waste-high-gigafactory-2018-5

Tesla, the electric-car company helmed by the billionaire Elon Musk, is generating an incredible amount of waste in an effort to manufacture parts for the Model 3 at its Gigafactory in Nevada.
Documents reviewed by Business Insider show that scrap at the Gigafactory may have cost the company at least $150 million.
Tesla told Business Insider that $150 million was an overstatement.
The company's attempt to ramp up Model 3 production has also led it to cut key parts of production, like ensuring that car parts are traceable.

I think the autopilot problems are just a small part of Tesla's problems....

Probably is some waste happening, those are the things that get ironed out over time.

Business Insider also happens to be a German venture, often teetering on the edge of NewsLite/FakeNews with clear bias.

Brick wrote:

Business Insider is clickbait extreme. I don't doubt that there are glitches, but AFIK Musk has enough taxpayer funded government subsidies financial resources to ride these problems out..

What taxpayer funded government subsidies are those? Space?

mham001 wrote:

What taxpayer funded government subsidies are those? Space?

All of Musk's companies have received a total of 4.9 billion dollars in taxpayer funded government subsidies according to a study done by the LA Times back in 2015.

Regarding electric cars, the Federal government kicks in $7500 toward each Tesla sold. This is in addition to up to $2500 per unit that is kicked in by certain states.

Brick wrote:

mham001 wrote:

What taxpayer funded government subsidies are those? Space?

All of Musk's companies have received a total of 4.9 billion dollars in taxpayer funded government subsidies according to a study done by the LA Times back in 2015.

Regarding electric cars, the Federal government kicks in $7500 toward each Tesla sold. This is in addition to up to $2500 per unit that is kicked in by certain states.

I don't think any of that $4.9 is going to get transferred to Tesla, but you are correct, Musk does indeed probably have his own money to prop it up.

Nor does Tesla receive the $7,500/2,500, that is returned directly back to the taxpaying car buyer - of any electric.

I wonder though, how much money will he eventually save taxpayers with Space X, and how much of that would have ultimately gone to other contractors anyway? The national security benefits are significant.

I am not a huge fan of Tesla, but they have broken into a well established industry and its taken a huge amount of money to do it. They aren't all the way there yet, but they could be insight of being major player in the industry if they don't run out of money first.

Building a car is expensive and building one from the ground up is really expensive and Tesla had to buy the talent along with the material. Companies like Ford, BMW, GM, VW, and Toyota all grew up together and and grew into worldwide firms. They have the infrastructure and talent to come up with a clean sheet design while spreading that cost over a full line of vehicles. There was a time when those companies didn't have the size of product like they have now. Tesla had to do a clean sheet design and didn't have the full product line to spread that cost. That was going to cost money. I think they have done the best they could for their situation. They began by selling high dollar vehicles, even though those vehicles had to subsidized somewhat they weren't as subsidized as they would have to be of they were making a less expensive car.

Several years ago I was at a Chrylser training class in Auburn Hills, Michigan. They had an electric Fiat 500 there and said that the car actually should cost $80,000, but they took a massive loss to sell it at $35,000, so they could move some product in California. 35K was even pushing it for a small economy car. Chrysler could subsidize it because they could then sell full size trucks and make huge profits to make up the difference.

I think they may eventually make money if they can become a mass market car company. If they become mass market they will have to change some things regarding service. The model of service coming to you works ok on the high end, but when they sell to the mass market that just won't cut it. As a professional mechanic I can tell you that many people are VERY hard on their cars and treat them very poorly. Today's Tesla buyer is rather well off and probably the kind of person who takes care of their car but when they hit the lower price ranges the abuse will come. The conditions I see 40K cars that are only a few years old range from like new to I've seen better cars in the junkyard. Tesla will need good parts and service distribution which is a big deal (why Renault had a hard time in the USA) the major car builders have spent decades building their network. Tesla will have to match the service and parts network to survive because that is what the mass market has come to expect.

I have to say I'm a fan of Musk's but I'm still on the fence about Tesla. I wouldn't buy one myself unless it was a lottery sideshow in the new garage, still too costly and for a Model S price I want MB-level build quality. But you do have to respect the man for his achievements, turning the payments industry on its head, then the auto industry and now the space industry. It's simply remarkable and all of it is run from a state that critics say is all but dead, complete rubbish of course. What I find fascinating is that his biggest challenge is the least expensive and simplest car or rocket he's making.

Anyway, I think 20-30 thousand Model 3s from now we'll have a very tight little vehicle and if Tesla can get it to Model S levels of quality topping out at $50-60K BMW and the likes will be very worried. Worried enough that someone out there may just buy the whole operation and hand Musk another $10B fortune so he can retire on Mars. I think that's his ultimate goal, all roads lead to Mars.

falstaff wrote:

Several years ago I was at a Chrylser training class in Auburn Hills, Michigan. They had an electric Fiat 500 there and said that the car actually should cost $80,000, but they took a massive loss to sell it at $35,000, so they could move some product in California..

That was Marchionne bullshit. The cost of materials is readily available and the Fiat 500e is hardly game-changing technology. I have read he said he loses $10/k per car, probably because of all the time it spends on the tow truck.

Marchionne has been poo-pooing electrics for years, in fact, hybrids too, it wasn't in their best interests. They discontinued r&d of hybrid/electrics a few years ago, expecting to be bought and not wanting to spend money on the future. This is the reason they suddenly find themselves changing face, announcing a major electric push last week.

Fiat Chrysler bets on electrification for Alfa, Jeep and Maserati
2018-6-1
Fiat Chrysler's plans to offer electrified versions across its entire Alfa Romeo, Maserati and Jeep lineups is a significant shift for a company that is a latecomer to the technology.



http://www.autonews.com/article/2018060 ... ati-5-year

mham001 wrote:

Nor does Tesla receive the $7,500/2,500, that is returned directly back to the taxpaying car buyer - of any electric.

True, government rebates do go direct to the final purchaser, but Tesla still benefits from it. Any time the government offers rebates on anything on a large scale, the purchase price for that item goes up.

If the government announced today that for whatever reason you'll get $100 rebate toward the purchase of domestic plane ticket, all of the airlines would raise their domestic fares across the board by $100. I also seem to remember during the cash for clunkers scheme from a while ago, pretty much all of the car manufacturers hiked the prices up on their smaller vehicles by the same exact amount that the voucher was good for.

mham001 wrote:

Brick wrote:

mham001 wrote:

What taxpayer funded government subsidies are those? Space?

All of Musk's companies have received a total of 4.9 billion dollars in taxpayer funded government subsidies according to a study done by the LA Times back in 2015.

Regarding electric cars, the Federal government kicks in $7500 toward each Tesla sold. This is in addition to up to $2500 per unit that is kicked in by certain states.

I don't think any of that $4.9 is going to get transferred to Tesla, but you are correct, Musk does indeed probably have his own money to prop it up.

Nor does Tesla receive the $7,500/2,500, that is returned directly back to the taxpaying car buyer - of any electric.

I wonder though, how much money will he eventually save taxpayers with Space X, and how much of that would have ultimately gone to other contractors anyway? The national security benefits are significant.

Tesla did receive ~$3.5B subsidies from states like Nevada and $465 loan guarantees from feds directly, not counting car buyer incentives.

mham001 wrote:

falstaff wrote:

Several years ago I was at a Chrylser training class in Auburn Hills, Michigan. They had an electric Fiat 500 there and said that the car actually should cost $80,000, but they took a massive loss to sell it at $35,000, so they could move some product in California..

That was Marchionne bullshit. The cost of materials is readily available and the Fiat 500e is hardly game-changing technology. I have read he said he loses $10/k per car, probably because of all the time it spends on the tow truck.

Marchionne has been poo-pooing electrics for years, in fact, hybrids too, it wasn't in their best interests. They discontinued r&d of hybrid/electrics a few years ago, expecting to be bought and not wanting to spend money on the future. This is the reason they suddenly find themselves changing face, announcing a major electric push last week.

Fiat Chrysler bets on electrification for Alfa, Jeep and Maserati
2018-6-1
Fiat Chrysler's plans to offer electrified versions across its entire Alfa Romeo, Maserati and Jeep lineups is a significant shift for a company that is a latecomer to the technology.

Only a year or two ago I was at a presentation by Jeep's UK MD, where the carbon credentials of the brand were talked up. His spin was that electric didn't sit with the ethos of their customers, who wanted off grid, off road experiences. I figured this dead end strategy was an excuse, so its no surprise to see them try and get into the electric game now.

40% scrap rate on manufacturing lithium batteries one of the largest pollutants in the universe. Damn
So instead of decreasing pollutants he is producing more pollutants than the hydrocarbons he proposes to replace it appears.
I guess Elon will leave that super fund site to "someone else" to clean up.
Just when Nevada was worried about burying nuclear waste.
Let us hope he picks up after himself before he goes Tango Uniform.


********

Interesting that every time he brings on new upper corporate management they only last about 60-90 days before they move on after they have a chance to see the financial end of his operation.
Wish him luck but there is a profound difference between imagination and sustainable business practices.


Okie

PlymSpotter wrote:

I figured this dead end strategy was an excuse, so its no surprise to see them try and get into the electric game now.

For sure it was, where there is gas, there is electricity and you can place plenty of PV on your roof to set up on your campsite just as well as spare gas tanks.

And aside of it.... the low RPM, high torque characteristics of electrical motors should be fairly good at the off road game.

best regards
Thomas

dtw2hyd wrote:

Tesla did receive ~$3.5B subsidies from states like Nevada and $465 loan guarantees from feds directly, not counting car buyer incentives.

There is that. But raising the state subsidy issue is only going to embarrass a lot of people around here whose favorite company receives the same types of relief for creating jobs. The Tesla loan guarantees never cost taxpayers anything and that matter would also embarrass fans of other domestic manufacturers..

Okie wrote:

40% scrap rate on manufacturing lithium batteries one of the largest pollutants in the universe. Damn
So instead of decreasing pollutants he is producing more pollutants than the hydrocarbons he proposes to replace it appears.
I guess Elon will leave that super fund site to "someone else" to clean up.
Just when Nevada was worried about burying nuclear waste.
Let us hope he picks up after himself before he goes Tango Uniform.


********

Interesting that every time he brings on new upper corporate management they only last about 60-90 days before they move on after they have a chance to see the financial end of his operation.
Wish him luck but there is a profound difference between imagination and sustainable business practices.


Okie

You should stop, you are only making a fool of yourself. Virtually none of that is true. Do you even know what lithium is?

mham001 wrote:

You should stop, you are only making a fool of yourself. Virtually none of that is true. Do you even know what lithium is?

https://www.weforum.org/agenda/2017/11/ ... er-energy/

Maybe you should try facts.

40% scrap rate on manufacturing throws the project out of the ball park on the carbon foot print it proposes to replace.

Okie

Okie wrote:

mham001 wrote:

You should stop, you are only making a fool of yourself. Virtually none of that is true. Do you even know what lithium is?

https://www.weforum.org/agenda/2017/11/ ... er-energy/

Maybe you should try facts.

40% scrap rate on manufacturing throws the project out of the ball park on the carbon foot print it proposes to replace.

Okie

Thanks, I started to read all that and immediately discovered the first disqualification - it does not measure the costs of securing oil lines around the world to stabilize prices. I am sure you are aware of our own involvement and costs of that. When a study finally includes that minor tidbit, we'll finally have an accurate analysis.

Additionally, rereading the article you say claims 40% battery waste, (or something) it doesn't say that at all. I recommend you reread the original article, you look even more foolish now.

mham001 wrote:

Additionally, rereading the article you say claims 40% battery waste, (or something) it doesn't say that at all. I recommend you reread the original article, you look even more foolish now.

Internal documents reviewed by Business Insider show that the company expects that as much as 40% of the raw materials used to produce batteries and driving units manufactured at Tesla's Gigafactory in Nevada need to be scrapped or reworked


Copied direct from article.
Continue digging.


Okie

Okie wrote:

Internal documents reviewed by Business Insider show that the company expects that as much as 40% of the raw materials used to produce batteries and driving units manufactured at Tesla's Gigafactory in Nevada need to be scrapped or reworked


Copied direct from article.
Continue digging.


Okie

I was hoping you would see that sentence and realize this article is vague fluff and we wouldn't have to go through this. My bad. What part of 'reworked" didn't you understand? But just look at that one statement. It highlights the sophomoric content of Business Insider. (note that BI states: "Linette (Lopez) is the senior finance correspondent at Business Insider, writing a combination of opinions and analysis.").

"the company expects", so they aren't sure? ...."as much as", that says they don't actually know....."or reworked" oh, not "scrapped" but fixed and used again - what was the percentage of that?..."40% of the raw materials" - what the hell does that mean? How exactly is that measured?....batteries and driving units, so its not just the batteries but the motors, gears, and electronics too...

From that, you extrapolated this:"40% scrap rate on manufacturing lithium batteries one of the largest pollutants in the universe. Damn". Hyperventilate much?

So lets say, (this actually happened, Senior Financial Correspondent Linette said so), that 1000 plastic battery covers were once punctured by an evil robot during the assembly process. Many, maybe most of the packs were found to be undamaged internally but there is a huge cost accounted as "scrap" that will simply be reworked with a new cover. But in Okie's world, it is apparently a testiment to the superior health and environmental benefits of oil. You go girls!

At what point will we kick this man off the government boobies?

Brick wrote:

salttee wrote:

Business Insider is clickbait extreme. I don't doubt that there are glitches, but AFIK Musk has enough taxpayer funded government subsidies financial resources to ride these problems out.

I fixed that sentence for you.

Those are private ventures from my understanding

He got a big rebate from the state of Nevada for locating a factory there.
That's no big deal. It certainly doesn't constitute a taxpayer funded government subsidy.

salttee wrote:

He got a big rebate from the state of Nevada for locating a factory there..

Well... apparently Tesla really needs the money...

https://www.wsj.com/articles/tesla-asks ... 1532301091

WSJ wrote:

Tesla Inc. has asked some suppliers to refund a portion of what the electric-car company has spent previously

They only time i ever had a customer call with such a notion was a couple of weeks before they filed for insolvency.

best regards
Thomas

I'm sorry but may I ask a maybe stupid question.
Electric cars should be environmentally friendly, that's how they're advertised.
You do not pollute, you save the Pandas, reserve a special place in Heaven for yourself, and so on.
But Lithium processing, manufacturing and waste disposal is a traditional heavy industry job, the kind of industries you will put in the far right under corner in simcity.
So it is the manufacturing of many of the car's pieces - tires to metal parts, the copper in the electric motors, all the heavy metals in the electronics, etc.
Plus, much of the electricity to charge the batteries is provided by nuclear or carbon or oil power plants - so not very friendly.
So what's all this thing around electric cars?

tommy1808 wrote:

salttee wrote:

He got a big rebate from the state of Nevada for locating a factory there..

Well... apparently Tesla really needs the money...

https://www.wsj.com/articles/tesla-asks ... 1532301091

WSJ wrote:

Tesla Inc. has asked some suppliers to refund a portion of what the electric-car company has spent previously

They only time i ever had a customer call with such a notion was a couple of weeks before they filed for insolvency.

best regards
Thomas

That's a new low for the auto industry. NET45 and 3% reduction every 3 years seem so reasonable now.

On the other side.....

an external audit by a company not related to Tesla (done for the markets apparently) is estimating that Must is now pulling in the high twenties per cent profit on the Model 3.

That's the game changer. If he can generate over 25% profit per car it all starts to look different. The Model 3 is his first play in the volume car market and if things keep going like this, next year's Model Y crossover should also be a winner as it's on the same platform.

Channex757 wrote:

On the other side.....an external audit by a company not related to Tesla (done for the markets apparently) is estimating that Must is now pulling in the high twenties per cent profit on the Model 3.That's the game changer. If he can generate over 25% profit per car it all starts to look different. The Model 3 is his first play in the volume car market and if things keep going like this, next year's Model Y crossover should also be a winner as it's on the same platform.

I can not answer about a report I have never seen but what is public knowledge is he is only delivering the high end model with a mark up that would be in line with any automotive manufacturer's top of the line mark up of 25%. We have no idea if he is actually meeting that nor is it a game changer.
Otherwise apparently there is years of production on the books of the low end model yet to be produced with small profit per unit.
I suspect your "external audit" is not based in reality but speculation.

********

tommy1808 wrote:

They only time i ever had a customer call with such a notion was a couple of weeks before they filed for insolvency.

Got pretty good piles of AR's that follow that senerio.

********
Musk was claiming to start delivery of 100,000 electric trucks per year by 2019.
220 work day year would be 454 trucks per day.
We are at mid 2018 and I do not think they have produced but a few proto types and some small test runs.
Hard to see 454 per day at this point.

Okie

Okie wrote:

Channex757 wrote:

On the other side.....an external audit by a company not related to Tesla (done for the markets apparently) is estimating that Must is now pulling in the high twenties per cent profit on the Model 3.That's the game changer. If he can generate over 25% profit per car it all starts to look different. The Model 3 is his first play in the volume car market and if things keep going like this, next year's Model Y crossover should also be a winner as it's on the same platform.

I can not answer about a report I have never seen but what is public knowledge is he is only delivering the high end model with a mark up that would be in line with any automotive manufacturer's top of the line mark up of 25%. We have no idea if he is actually meeting that nor is it a game changer.
Otherwise apparently there is years of production on the books of the low end model yet to be produced with small profit per unit.
I suspect your "external audit" is not based in reality but speculation.

There are quite a few similar reports doing the rounds. This one is from Berenberg, who also rated the stock as a Buy in May.

https://www.cnbc.com/2018/05/21/tesla-s ... alyst.html

From what can be seen in the way Tesla is pushing out the 3, they need a strong sales stream of the 3 and Y models to allow for budget models in any kind of volume. European sales are also starting to be unlocked; especially in Norway which is EV Heaven.

All this does mean cash burning as ramp-up keeps going and production methods get streamlined.

Channex757 wrote:

There are quite a few similar reports doing the rounds. This one is from Berenberg, who also rated the stock as a Buy in May.

Maybe you should try like some pertinent information as well as present day that was previously referred.

Musk is asking for rebates from suppliers for previous business so he can show a profit for 3rd quarter.
The stock price is falling just 3% today and probably maybe 15% since the first of the year.

25% of his orders have been cancelled.

Channex757 wrote:

European sales are also starting to be unlocked; especially in Norway which is EV Heaven.

Not sure Norway can consume 25% of the production. You would have to show me that.

Okie

Channex757 wrote:

...
That's the game changer. If he can generate over 25% profit per car it all starts to look different. The Model 3 is his first play in the volume car market and if things keep going like this, next year's Model Y crossover should also be a winner as it's on the same platform.

That assumption (or) fact is not going help with current situation though. No supplier is going to take a haircut if the customer boasts 25% profit, real or fake.

AFAIK, no supplier has refunded money already paid.

Tesla's future depends on cult members putting in deposits for 3 or Y or Semi. For that Musk has to be active on Twitter without saying any wrong thing or get into a social media brawl.