Quoted from AAAV8R:I don’t think you are realizing what is going on here.
I’m sure you are aware that Elon had been under extreme pressure to hit the production targets that he has forecast in the last several conference calls and earnings reports. Now, normally, setbacks wouldn’t be such a big deal if there were light at the end of the tunnel. But we are looking at a company that has been burning through roughly $16 million a day, and is running out of - if not RAN out of - options to raise additional capital.
Elon promised a state of the art, fully automated facility that was so advanced, the average person could not even fathom the levels of complexity and advancement. We all know of the myriad of unforeseen problems that the line ran into. Furthermore, attempts at stationing workers on the line were mostly a failure since the idle robotic equipment did not allow the space needed. So the primary line is functioning, but barely, albeit at a trickle.
The news I was waiting to see was how long it would take to get the primary line functioning as it was originally intended. I assumed that this was something line software issues etc. Elon’s earnings calls early this year even made it sound like this was another glitch that would be overcome shortly, and the line would be cranking out cars. But a mere couple of months later, Elon made a stunning announcement that they had ripped the entire parts conveyance system out of the factory. As of today, there has been no announcement as to a Plan B to re-tool the facility.
So Elon announced this “second assembly line” as a means to not only to hit the production targets, but more importantly, stop the (cash flow) bleeding. So this second assembly line has been under a microscope by virtually every institutional investment firm to car enthusiasts.
The line only got its permit a couple of weeks ago. Right away, all of the aforementioned parties were asking questions on how many cars the line was producing, and what the production targets were. Not only were no numbers offered, but the company refused to even confirm whether or not the line was operational. To make sure nobody saw what was going on at the tent, Elon had semi trailers ring part of the facility to block the view. Looking at the video where the drone rises above the trailers, the answer is pretty clear - virtually nothing.
There are also some other very alarming takeaways from the video. The line is clearly not completed. Components and parts kits are scattered around the outside of the facility. No cars are rolling off. There are no robots - assembly is all manual. Observers (like the drone operator) that have been watching the tent facility have reported that the frames are being forklifted from way over at the paint facility, and manually loaded onto the conveyor belt.
Obviously, these reports and observations have been getting back to investors and analysts that everything was not on the up and up with this new facility. So they started asking questions. Just days ago Elon told everyone that the new assembly line was not only functioning (not true) and that the quality of the cars coming off the line had “slightly higher quality” than the primary line.
Here is a brief summary of what I see:
The company is still hemorrhaging money, and is running out of options for raising additional capital. Getting Model 3 production up to target levels was critical to mitigating cash flow losses. The second assembly line is clearly not functional, and Elon is obviously lying about it. Furthermore, even IF the second assembly line becomes operational, it will be crawling along using manual assembly.
Tesla is in big, big trouble.
I have no stake in Tesla...Dallied with purchasing a Model S a year ago, but decided to go elsewhere due to some of these very concerns. I didn't read any hyperbole, wild conjectures, falsehoods, etc, yet 3 downvotes?? Seemed a very plausible post to me.