Tesla Reached 7,000 Cars Per Week In 3rd Quarter & Nobody Noticed
Credit to Author: Maarten Vinkhuyzen| Date: Tue, 08 Oct 2019 06:36:13 +0000
Published on October 8th, 2019 | by Maarten Vinkhuyzen
October 8th, 2019 by Maarten Vinkhuyzen
From the start of Tesla Model 3 production until about a year ago, the most important, nearly daily, Tesla news was about the weekly production numbers. We visited the Bloomberg tracker regularly to stay abreast of the news, and the FUD. And then Tesla started producing over 4,000 vehicles per week regularly and the interest disappeared. Tesla finished the marathon many doubted it could endure for more than a mile, two at the most.
Those were fun times. Tesla reaching 100, 200, 500, and even 1,000/week was an exciting progression of events. Elon Musk teased production numbers on Twitter that were one-time events and some claimed that they could “never” be sustained at a steady production level. The monthly sales number guesstimates on InsideEVs and Tesla’s quarterly delivery disclosures were preceded and followed by heated speculation.
As a somewhat more detailed reminder of what happened, Tesla designed a futuristic 5,000 unit/week production line, only to discover that humans were greatly undervalued and that line had to be redesigned while slowly ramping the production numbers. There was the plan to build a second 5,000 unit/week line when more vehicles were needed.
However, when redesigning the line, optimizing and tuning all the steps, Tesla realized that it would be less costly to enhance the line to higher throughput numbers than to build a second line. To be precise, upgrading to 7,000 units/week would be possible with small enhancements and a little capex. Upgrading to 10,000 units/week would require serious investments. The 7,000 unit/week option was really a no-brainer. The 10,000 unit/week option was a possibility that probably never reached the status of plan, let alone stimulating any actual planning.
When building Gigafactory 3 (GF3) in Shanghai became reality, all talks of 10,000 units/week in Fremont were forgotten (except by some foolhardy trolls).
In those days, Musk and some other figures with a grasp of production tried to explain what 41.6 cars/hour or 1,000 cars/day or 7,000 cars/week represents. Many did simple arrhythmic and proclaimed production of 360,000 or even 365,000 per year.
While 24 x 41.67 indeed equals 1,000, there is never a day when there is no slowing down or stopping of the line. To get to 1,000 cars/day, you have to get to a steady 47/hour. There are always bathroom, coffee, breakage, accident, repair, and other interruptions. For the same reason, you need 1,100 to 1,150 cars/day to reach a 7,000 cars/week. Or, at least, something like that. Jerome Guillen, Tesla’s president of automotive, knows the exact number.
That coveted 7,000 cars/week will not result in 91,000 vehicles/quarter. That is 80,000 at the most. A rule of thumb of 11½ weeks per quarter is often used in planning.
In a production environment, there are always production disturbances, accidents, needed repairs, maintenance, upgrades, alterations, etc., besides the holidays and other valid reasons to close the factory for a day or so longer.
Such issues happened a lot in the disastrous first quarter of this year. They happened at a normal rate in the third quarter, and they will happen in each quarter in the future.
But with a total of 79,837 Tesla Model 3 vehicles produced in the last quarter, we now know that the steady 7,000 unit/week total for a whole quarter has been reached. The most remarkable thing about this achievement is that it was not noted by all those people who were so focused on this number a year ago. It was a non-event, as it should be with a normal carmaker.
Maarten Vinkhuyzen Grumpy old man. The best thing I did with my life was raising two kids. Only finished primary education, but when you don’t go to school, you have lots of time to read. I switched from accounting to software development and ended my career as system integrator and architect. My 2007 boss got two electric Lotus Elise cars to show policymakers the future direction of energy and transportation. And I have been looking to replace my diesel cars with electric vehicles ever since. And putting my money where my mouth is, I have bought Tesla shares. Intend to keep them until I can trade them for a Tesla car.