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"Burst Week" was quickly imposed as a highlight of the Tesla calendar. It's like Thanksgiving, except that it happens once every three months and everyone works twice as hard.
Tesla Inc. announced Monday morning the figure that everyone expected: During the last seven days of June, Model 3s, finally delivering a target ( very reduced) for this critical car. The action climbed well up to 6.4% (although it dropped 1.7%)
On the one hand, it is understandable that Tesla bulls are fanned. The difficulty of the company in increasing the production of model 3 was the darkest cloud that prevailed, which resulted in a strong liquidation of the stock this spring. It was essential to reach 5,000 a week to prevent another.
On the other hand, the fact that a company that has not made regular profits is suddenly valued at $ 60 billion because it has managed to achieve a goal of single production.
The other side of the week is that the rest of the weeks in the quarter are less impressive:
Going All Out
Tesla's average weekly production of Model 3s is much larger. lower than last week's bursts
Source: The company
The story is limited, since the production of model 3 began only last summer. Note, however, that averages for each quarter tended to be the same as for the last week of the previous quarter. There are two implications. The first is that the ramp of Model 3 is not built like most ramps.
The other, more promising, is that Tesla can now maintain this average of 5,000 a week in the third quarter. Indeed, the company announced Monday that it could be even faster than this:
We believe that GA3 [the assembly line inside its Fremont, California facility] will soon be able to reach a production rate of 5,000 Model 3s per week soon.
Still to be said, the statements of Tesla's expectations should be taken with a fairly large portion of salt. What this statement also highlights, however, is the other part of Tesla's second quarter story: the tent.
The additional structure set up outside the main facility of Fremont – "GA4" to give it its official title. his goal of 5,000 per week. The company said that about 1,000 vehicles were collected during the last week of the quarter.
This is an interesting figure. Because if the tent was running 24 hours a day, this week, a model 3 was rolling on that line at an average rate of 1 every 10 minutes, much slower than in traditional car factories.
. Despite this number of production, Tesla has missed close to 12,000, or 39%, the consensus forecast for model 3 shipments for the entire quarter (this could also reflect a strategy to limit shipments to extend federal grants).
For Tesla to realize the benefits and positive cash flows it claims to be imminent, it must produce vehicles of consistent volume and quality and with high productivity. Letting go for a week looks more like a gadget for stock market consumption than a measured path to self-financing. The tent may have got Tesla on the arbitrary line of 5,000 for a week, but at what price? We will see in a month when the results will be published.
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
To contact the editor responsible for this story:
Mark Gongloff ] at [email protected]
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