The car
Published on November 15, 2020 |
By Zachary Shahn
November 15, 2020 By Zachary Shahn
I’ve been lucky enough to chat a lot with Tesla CEO Elon Musk over the last few years. Surprisingly, what he said in private chat is mostly what he says in public on a regular basis (included on Twitter). In fact, some of his regular messages in private and public were the same as many years ago. But we also have some solid updates on some of these things that put muscles and bones on concepts.
I’ve been covering Tesla since 2012, and one thing I and many close followers have noticed is that Tesola has closely followed the long-term plans that Elon laid out many years ago – so there is no longer a need for key messages. Edit Honestly, I think that’s a very surprising thing about Tesla – it’s unusual for a company to follow the path predicted so many years ago, especially when you consider that there are a lot of goals along the way. “Industry experts and armchair Tesla Impossible by ” Critics Haters.
There’s a line that has been in use for many years, at least since the early days of the first Gigafactory, I think it’s really starting its real-world momentum. It refers to “the machine that makes the machine.” From my experience, he’s been talking more about this part of last year’s business. In fact, the title of an article I wrote after a few conversations with Elon was as follows: Elon Musk: “Tesla’s long-term competitive advantage will be productive.” At a recent Tesla conference call, he elaborated:
“Tesla is absurdly more vertically integrated than any other auto toe company or basically any company. We have a huge amount of internal manufacturing technology that we have created ourselves. … It’s like this, well, what things do we want to make? Design a machine that will make that thing, then we’ll make the machine. So it’s very difficult to copy Tesla – because you can’t do catalog engineering. You just can’t say I will select the supplier catalog, I will get one of them. We are building a crazy amount of machinery internally. If we are trying to make progress and no one has found the machines we want, we have made it. So we do. “
However, this is just an introduction to the excitement of this article. It is a reference around two other key statements of the Q3 Tesla shareholder call.
The first statement that catches my attention is logical and nothing special for Tesla, but it will add important context to the complex mass production – and the challenges of increasing product production such as cars. Elon noted that the factory production ramp is meant to enhance approximately 10,000 unique parts or processes, “each at its own turn.” It’s amazing to think about. For a car to go into mass production, 10,000 or so individual parts and processes need to flow through a small-scale mass production. You can’t miss 10 parts or even one part. When you keep that in mind, Tesla’s ability to increase production of the Model 3 in recent years and the production of the Model Y this year has been surprising and inspiring. It’s wild, to put it simply. Tesla basically had to learn how to mass produce in a few short years. And it is.
But the real biggie for me was this one: Tesla’s automotive gross margin improved from 18.7% to 23.7% in the third quarter (Q3). It’s a surprising improvement in a wild, aut tomative gross margin – nothing to be ashamed of. 18.7% is also a great gross margin in the tomato industry. This improvement is a promise for Tesla to become more efficient, to focus more on what can be done better at home work, to consolidate costs, reduce costs, and increase production speed. He is also a fundamentally influential person. A 23.7% gross margin – and potentially still an improvement – still leaves Tesla with a lot of residue to bring down prices or make cash bottles grow faster.
In my conversation with Elon a few months ago, he said, “Tesla’s long-term competitive advantage will come in production.” He has said something like this in the last year. Historically, if Elon regularly says something about the company’s long-term path, that would be the case. Therefore, it is hard to believe against the idea that Tesla’s biggest long-term benefit is centered around the company’s production skills. We’ll see what brings surprises or surprises in the fourth quarter.
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About the author
Zachari Shah is striving to help society one word at a time. He spends most of his time here Clintenica As its director, editor-in-chief and CEO. Zach is known globally as an expert in electric vehicle, solar energy and storage. He has presented about Cleantech in conferences including India, UAE, Ukraine, Poland, Germany, Netherlands, USA, Canada and Qurao. Zach has long-term investments in NIOs [NIO], Tesla [TSLA], And exping [XPEV]. But it does not provide any kind of investment advice (explicitly or implicitly).
