‘Time is ticking’: Tesla’s Elon Musk in ‘eighth hell’

There will be no new model 3 Teslas in 2017.
Nanjing Night Net

The electric carmaker updated its website for customer reservations on Wednesday, including a table that shows the base $US35,000 ($44,000) Model 3 won’t be available until some time next year.

That follows a painful earnings call for chief executive officer Elon Musk, who described the company as being in the “eighth level of hell” (there are nine, in case you’re counting).

The stock price fell 8.9 per cent on Thursday, the most in more than 16 months.

The electric-car maker won’t build 5,000 units per week of its Model 3 sedan until sometime in March, three months later than planned.

“I have to tell you I was really depressed about three or four weeks ago,” Musk said on the call after Tesla reported a record quarterly loss and cash burn.

He downplayed the long-term implications of the delays. “In the grand scheme of things,” Musk said, “this is a relatively small shift.”

But the setbacks lengthen the wait for hundreds of thousands of customers waiting for their Model 3 and extend the payoff period for the billions of dollars the company has spent to expand. The manufacturing snags will embolden skeptics who’ve doubted the company’s ability to quickly reach mass production, a feat the youngest US carmaker is trying to pull off for the first time with a car that starts at $US35,000.

“We left the call frustrated with the lack of transparency from Tesla management,” Jeffrey Osborne, a Cowen & Co. analyst who recommends selling the shares, wrote in a note to clients.

“Elon Musk needs to stop over promising and under delivering and the board should rein in a CEO who publicly shares his aspirational goals that have rarely been hit.”

Tesla burned $US1.42 billion in cash in the third quarter. The carmaker is spending heavily on both its auto assembly plant and at its battery gigafactory, contributing to an adjusted lost per share of $US2.92 per share, worse than analysts estimated. Bottlenecks

People from key teams at Tesla are now focussed on fixing bottlenecks that have hobbled production, said Musk, who held his earnings call at the Nevada battery factory where he and co-founder J.B. Straubel are spending their days and nights, even camping on the roof . Btw, just want to express a word of appreciation for the hard work of the Tesla Gigafactory team. Reason I camped on the roof was because it was less time than driving to a hotel room in Reno. Production hell, ~8th circle ?????? Elon Musk (@elonmusk) October 26, 2017 Source: Tesla

The “$US35,000 electric car” has been Tesla’s top goal and marketing calling card for years. It’s an important price point, competing with entry level luxury petrol-powered cars like the BMW 3 Series and the Mercedes C Class.

When you include a $US7,500 US tax credit, the price is cheaper than the average new US car and more in line with a well-optioned Toyota Camry.

But on Wednesday’s call with analysts, Tesla pushed back its timelines for the Model 3 by three months. And perhaps the biggest warning flag: Musk would no longer give a timeline on when Tesla would reach a production rate of 10,000 a week.

Last quarter he was unequivocal on that point: “What people should absolutely have zero concern about – and I mean zero – is that Tesla will achieve a 10,000 unit production week by the end of next year.” 2. The solar roof

One of the first completed installations of a Tesla Solar Roof. Source: Tesla

A year ago this week, Tesla unveiled its remarkable solar shingles with much fanfare in Hollywood on an old set of “Desperate Housewives.” It began taking deposits in May.

There’s still little indication of when the product might roll out. Tesla said things will move slowly in the coming quarter while it gets its new factory in Buffalo, New York, up and running.

Then, the company said, the product will ramp up “in 2018.” That’s a wide window for customers trying to plan a roofing project.

Perhaps a better indication of where things stand is this: Tesla’s website currently shows job postings for 24 “lead roofer” positions – all in California. Each position, according to the descriptions, would be second-in-command of a small roofing team.

Meanwhile, the amount of standard solar installations being done have dropped 42 per cent compared with the same quarter last year, just before Tesla bought SolarCity. 3. Autopilot

No hands. Photo: Christopher Goodney/Bloomberg

A year after Tesla started charging $US8,000 for a feature called Full Self Driving, there’s still no sign of a rollout of such features, and Musk hinted that a more powerful supercomputer may be needed to achieve its goal.

On Wednesday, he said the current hardware can reach “approximately human-level autonomy.”

Musk concedes that the system will probably need to be significantly safer than the average human driver in order to achieve regulatory approval, so a hardware upgrade may be necessary.

“We’ll have more to say on the hardware front soon, we’re just not ready to say anything now,” said Musk. As a consolation, anyone who has already paid for the option will get a free computer swap.

Tesla said new features will be coming for its less-ambitious $US5,000 Enhanced Autopilot package in the next few months. Musk said the other hardware for autonomous driving-8 cameras, a radar and 12 ultrasonic sensors-will be sufficient.

Other companies pursuing autonomous driving are also including expensive lidar kits. Musk was undeterred: “We are certain that our hardware strategy is better than any other option, by a lot.” 4. Tesla semi

Tesla was set to unveil its first all-electric long-range semi truck back in September. Then it was moved to October.

Then it was pushed until November 16, explicitly so that resources could be diverted to deal with Model 3 problems. Tesla Semi unveil now Nov 16. Diverting resources to fix Model 3 bottlenecks & increase battery production for Puerto Rico & other affected areas.??? Elon Musk (@elonmusk) October 6, 2017 Photo: supplied

Tesla is working on a system that will allow owners to rent out their cars using what they’ve dubbed the Tesla Network. Once fully autonomous driving is achieved, the idea is that fleets of privately owned Teslas will function like a driverless Uber or Lyft, picking up and delivering passengers for a fee that will be split between Tesla and the individual car owners.

In the shorter-term, the Tesla Network could function more like Zipcar. An owner could switch a setting online and open their car for someone to rent. The Model 3 uses key cards and Tesla’s smartphone app instead of a key, so in theory anyone could be granted access through an automated system.

The Tesla Network, which accounts for billions of dollars in long-term revenue in many analyst models, is supposed to be unveiled this year.

With all of the bigger delays drawing the attention, it didn’t even get a mention on Wednesday.


This story Administrator ready to work first appeared on Nanjing Night Net.