Tesla Giga Shanghai’s Model 3 production run-rate already hitting 91% of ambitious 2021 targets


Today we're going to go through a detailed forecasts for q four delivery and production numbers for tesla. The reason we're doing this today is because we finally have critical piece of information that can help inform this forecast and that is gigafactory shanghai production numbers from the china passenger car association so earlier this week we had talked about the model three sales numbers in china for october. But we didn't yet have the production numbers those have now been released by the a and they are very strong. I think even better than the most bullish forecast that. I have seen so october production out of your factory. Shanghai was reported to be twenty two thousand nine hundred and twenty nine model threes so put the context around just how strong that number is. Let's hop into my forecasting spreadsheet. If you haven't this yet just orientate you. Each row is a different period of time and then in each group of columns here. I have production numbers so i have total production fremont production shanghai production and then i break that down to a weekly level and level those production rates on a weekly and daily level are incredibly important. Because sometimes tesla has known downtime. So looking at monthly or quarterly production doesn't really give us the full picture that weekly daily dust and then on the color scheme here gray numbers are known those have been reported by tesla or figured out by us. With high high competence. Orange numbers are also high competence but are based off of reports out of china. Blue numbers are estimates kind of fill in the between the two and then yellow. Our future forecasts are at so getting back to the shanghai numbers. Then if we look tober that twenty two thousand nine hundred twenty nine production number divided over the four point. Four weeks in october yields a weekly production rate of five thousand one hundred seventy eight model threes per week from shanghai. This is much greater than the twenty eight hundred and fifty produced each week over the course of q. Three however if we flip back to september actually got a bit of a hint. That numbers like this. Were on the way from tesla. So total september dessel only produced about twelve thousand two hundred vehicles that was actually down slightly from august and july. But what people may have missed. Is that tesla. Actually had shutdown gigafactory shanghai from september twentieth. To september thirtieth. So if you take those days out tesla actually produced about forty five hundred model threes per week in september over the two point seven production weeks where they weren't shut down so it looked like tesla's kind of leveling off production at about twelve thousand per month but actually took a huge step forward in september in terms of the production rate. We see that then continue into october and even accelerate while the monthly production takes a massive step forward from twelve thousand all the way up to almost twenty three thousand because there was no downtime in october so this production rate almost fifty two hundred per week. October has huge implications for the balance of q four if we even just extrapolate that rate tesla's at now that ends up being sixty eight thousand model threes produced from shanghai in q four their few reasons. We've seen this massive jump in production rate from shanghai first off. They've obviously just ramped up their production rate. One of the ways. They've been able to do that though is by adding another shift to shanghai. Depending on what estimate you're looking at that seems to have added about thirty to fifty percent of production hours from employees so that's filled out the production capacity and then we've also seen tesla star utilizing. The lithium iron phosphate batteries from cat l. And if they were battery constrained before this seems to have done a lot to alleviate that at this level so as far as i know there is not going to be any significant downtime in q. Four but definitely if you have any information on that let me know if there is not and we continue this rate at sixty thousand but tesla has been ramping up production from september through october. So there's no certainty that this production rate is going to hold through the rest of the quarter rather than continuing to increase. We also have a report from tasmanian today. Which has heard from a source that quote the current model three production has now surpassed fifty seven hundred units per week and quote. We've also been talking now for quite a while about how you four could be. The start of production for the shanghai made model. Y the latest. We've heard on that. Is that might actually happen in november so we could even see some production model y contributing to these keefer numbers so if we flip back to the forecasting sheet here and we look at my forecast. I'm gonna actually forecast even a little bit lower than that rumored production rate from tasmanian. I'm gonna project about a three four percent increase for the next couple of months here in shanghai. I think this is relatively conservative. But this could change. If there are periods of downtime or if the model y ramp for some reason impacts the model three production rate but i do think this is pretty reasonable and again hopefully a little bit conservative for shanghai so for november production weekly. I'm at about fifty three hundred and fifty and then for december a couple hundred more about fifty five hundred and fifty. That gets me to you again. About twenty three thousand four november and about twenty four thousand five hundred four december for total q for production out of shanghai at about seventy thousand five hundred vehicles. Now obviously that's pretty high that would be higher than tesla stated production capacity and accused three report which they listed at two hundred and fifty thousand. But we've already seen them beat that production rate throughout the entire month of october if the numbers are accurate that october production rate already analyzes to about two hundred and seventy thousand vehicles so they've already demonstrated rate above that listed capacity for what it's worth if tesla can bump that production capacity up to fifty seven hundred for november and december. That would add another couple thousand to this forecast so these numbers for shanghai have big implications for q four and for next year. But let's stick with four. Let's rounded out by looking at fremont production so that we can work into the total for kiefer and for the year in q. Three tesla produced about one hundred and forty five thousand vehicles in total. About thirty seven thousand. Five hundred of those came from shanghai so that we as a little over one hundred seven thousand two had to have come from fremont if we divide that by the thirteen point one weeks on the quarter. That's about eighty two hundred per week beyond that. We know that tessa produced just under seventeen thousand as an ex. Those obviously came from fremont that we've just over ninety thousand model y model three from fremont produced and q. Three as we get more granular. It became more speculative but based on vins and other information out there. I have estimated that cute to model production was about eleven thousand vehicles out of fremont and the q. Three was about thirty three thousand leaving the balance then for model three so q four based on the prior ramp up that we had seen from the model three. I'm estimating that tests. I can bump that model wipe production up to about fifty three thousand in q. Four so about twenty thousand more vehicles. Which if my q two and q three breakdowns are close. It'd be similar to increase that. We saw quarter to quarter there. If we look back at how the model three ramp progressed. The should be doable and q. Two twenty eighteen tessa produced about twenty eight thousand mile threes and then in q three two thousand eighteen about fifty three thousand so actually showing even a less sharp increase for model y than what we previously seen for the model three despite tesla having a lot more experience now and the model being a similar vehicle to the model three so again i think this is pretty reasonable and hopefully even bit conservative as for model three we have tended to see that production rate fall and then sort of flat line as model. Why has ramped up. I think one of the questions. There is okay that a demand thing less demand for the model three the model y ramps or is that a battery supply constraint where the model three production is held back due to batteries being shifted and being used for the monowai. I assume it's a battery supply constraint. But if it's demand i think tesla has pulled the levers here with the refresh plus q four is always seasonally stronger and as somebody that has ordered a model three this quarter and has having to wait significantly longer than i would prefer. There certainly doesn't seem to be any demand shortage. So i think the only constraint here is likely to be batteries for that reason and because we're already forecasting growth for the model y. I'm not gonna forecast much of an increase in production for the model three here. Only about one percent to about fifty eight thousand from fremont key four that puts our combined fremont model y and fremont model three at about one hundred eleven thousand for the quarter to me. That feels pretty good because again in q. Three that number was about ninety thousand but if we look back to tussled q three earnings report specifically about fremont they said quote production should reach fo capacity toward the end of this year or beginning of next year end quote. The production capacity for model three and model y out of fremont is five hundred thousand per year. So that's one hundred twenty five thousand per quarter if they didn't ninety thousand in q. Three and they're trying to target one hundred twenty five thousand production rate at the end of q. Four well if we just assume a linear ramp up throughout the quarter we can just use the midpoint of those numbers and that would give us a hundred and twelve thousand five hundred for four now on one hand. They said they hoped to reach that production rate by the end of the quarter or early in q. One but on the other hand the ninety thousand production number that we used from q. Three is the total key. Three production rate. It was probably higher towards the end of the quarter. So with all that. Said i think one hundred and eleven thousand is right in the ballpark of where tesla could end up for fremont for a wyan model. Three in q four. Oh we have left. Then as s and x tesla's the fremont capacity at ninety thousand there. That's twenty two thousand five hundred per quarter. We've also seen updates this quarter the model s. price declines the range in the model x. has been increased so even though tesla has been for the last few quarters running at about fifteen thousand per quarter for s and x and peaking at about eighteen thousand last four. I'm expecting a decent jump here from an xm. Forecasting nineteen thousand. But i do think there's potential that it could be even a bit higher. Let's just take a quick look here and then see how this all looks visually. And then we'll wrap up with the final numbers so here we have our weekly production rates. Each quarter for in blue fremont an orange shanghai and in both cases these are excluding known shutdown that we've had from corona virus or factory retooling. Whatever the case may be so for q. Three shanghai ended up excluding that final ten days at about thirty two hundred per week and here for four. We haven't projected to jump up about fifty three hundred per week but it fits pretty nicely with the linear uptrend that we have seen and again in september already tussles producing at about forty five hundred per week so it seems extremely reasonable and it's not unprecedented in the past we have seen in fremont tesla increased their production rate quarter over quarter by almost two thousand vehicles per week thousand one. We talked about before with the model three ramp up so similar thing here. Then for fremont we're going from about eighty two hundred per week in q. Three up to about ninety nine hundred per week in q four about seventeen hundred more per week but again definitely not unprecedented looking back at tesla's history are at so with all that context. We'll hop back into our spreadsheet here and all these numbers combined give me a cue for production total fremont and shanghai both of two hundred thousand five hundred and seventy eight vehicles. I know that might sound like a lot. But again tesla lists their production capacity at eight hundred and forty thousand in the q three earnings report and while the production rate doesn't necessarily equal and sawed capacity we've actually seen them exceed that installed capacity listing in shanghai in october. So if we add that two hundred thousand to what tesla's already produced so far this year that would get them to five hundred and thirty thousand vehicles produce for twenty twenty as for deliveries and whether tessa will deliver more vehicles than they produce in q four. I think there's a couple of factors there. We have really low days of inventory. So tesla's not working with a lot of stock but on the other hand that they are increasing the localization of their production which helps lower the required amount of stock. Because you just have less shipping time. So i'll have to spend a little bit more time thinking about that. I think it'll be relatively close to production and with what tesla has delivered so far year to date. They need a little over one. Hundred and eighty thousand vehicles delivered in q four to meet five hundred thousand for the year. And i think they'll exceed that by a pretty significant margin so i'll spend more time thinking about how deliveries might vary from production. But i guess for how you can put me down for two hundred thousand deliveries for key for

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