Report: Model Y to Be Built in Fremont, Model S Refresh Coming in September – Tesla Motors Club

Report: Model Y to Be Built in Fremont, Model S Refresh Coming in September - Tesla Motors Club
Tesla Model S Refresh With Minimalist Interior and Model 3 Motors Coming This Year: Report
Tesla is rejiggering its car factory in Fremont, California, to make way for production of the Model Y crossover SUV, as well as a refresh of the Model S with a more minimalist interior design and longer-range battery, according to several current and former employees.

These initiatives could raise costs again for Tesla, just as CEO Elon Musk has vowed to review every 10th page of outgoing expenses, personally. But starting up production of the Model Y in 2019 allows Tesla to tap into the growing SUV segment sooner rather than later, while a Model S refresh would help it maintain or grow its share within the declining market for luxury sedans.

Tesla shares are currently at multi-year lows, but investors can still lose big if the company does not get demand levels to where they need to be. Right now, it seems as if the general consensus is in the mid 70k range for deliveries in Q2, which would be much lower than official guidance but support the “74k” number cited in the CleanTechnica article. Thats an annual run rate of just 300,000 vehicles, not only below guidance, but likely not enough to get to sustainable profits and cash flow. Tesla has a few demand levers left it can pull for the Model 3, like right wheel drive markets and expanding leasing, but this was a company that was supposed to be at half a million vehicles of production in 2018. With guidance like that continually being missed, its not a surprise that investors are finally starting to lose faith in the company, and thus the stock and bonds are being hit hard.

The company has barely begun to place orders for new equipment to manufacture the Model Y, employees said. And while Musk has suggested that Tesla would probably make the crossover SUV in Fremont, Tesla hasn't officially announced that preparations in the factory had begun.

What is Musk replying “Yup” to? I would guess that hes talking about CleanTechnicas point that everyone overreacted to the leaked e-mails from recent weeks. However, lets not forget that weve seen before, like in Q1 where orders were supposedly so high that Teslas system crashed, yet there was a big miss when they actually announced the numbers. If Tesla were to miss, it brings up the question of how truthful management was when reiterating guidance to sell the latest capital raise. In the next week, well get a variety of estimates for Tesla deliveries in the US/Europe in May, which will make it a bit more clearer on what Tesla may announce in early July.

Tesla to build Model Y in Fremont, Model S refresh September – report

Making way for Model Y production in Fremont will require Tesla to combine Model S and Model X production into one line, according to the insiders. These lines at the car plant take up a significant amount of floor space today, at least partly because the S and X are each made with a lot of parts. The Model X is particularly complicated to build — its features include falcon wing doors that open up, rather than out — leading Musk to liken it to a "Faberge egg. "

In addition to the Model Y, Tesla is planning on a full refresh of the Model S, which employees say will likely include an interior with the minimalist look and feel of the newer Model 3, the same drive units and seats used in the higher-end Model 3, and a battery that delivers 400 miles of range on a full charge.

Musk has gotten in trouble with the SEC over his Twitter usage, and this latest reply on the site probably wasnt a good idea. While he most likely was not referring to a delivery estimate that would be a major guidance miss, he shouldnt leave his tweets so open to interpretation. That obviously did not work well a few months ago with his “500k production” tweet. In the end, investors should be concerned, not only because of the potential of Tesla to miss guidance, but because Musk still has not been reigned in on Twitter, which remains a major risk factor for shareholders.

Tesla has recently been canceling factory tours because of "upgrades" being made to the factory, according to Musk, who didn't say exactly what those upgrades entailed.

The man, of course, is Eike Batista, who once famously told Mexicos Carlos Slim to watch out because, he said, he was poised to surpass him as the worlds wealthiest person. Slim has since faded to ninth on the list, Batista to oblivion. Now, hes staging a comeback. Or trying to, at least. Hes also got lots of ideas for a man on the hot seat right now that he sees as something of a kindred spirit, Tesla CEO Elon Musk, and hes quick to spew criticism at those he feels did in his empire.

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Meanwhile, production has already slowed on the current S and X models. In the first quarter of 2019, Tesla laid off a portion of its Model S and X production staff and cut hours for those who remained, as CNBC previously reported. Today, Tesla only manufactures the S and X on day shifts during the week in Fremont. There is no weekend or nighttime production of those cars today, according to the current and former employees.

Last week, Tesla cut prices on its Model S by $3,000 and Model X by $2,000, and rolled out a free supercharging incentive to entice customers, causing some analysts to question whether demand is softening for these older, higher-priced models. This follows a set of upgrades in April that improved the driving range and charging speed for both cars.

On investor calls recently, Tesla reiterated guidance that it would deliver 90,000 to 100,000 cars in the second quarter of 2019, and at least 360,000 in 2019. It has not said how many of these would be Model S, X and Model 3 vehicles or, eventually, Model Ys.

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Tesla shares fell more than 10% last week on investors' concerns over demand, profitability and the impact of U.S.-China trade clashes on the company. They recovered slightly after an email leaked in which Musk promised that Tesla was on target to meet its second-quarter goals.

Referring to the Tesla founders tussle with the SEC over the use of his Twitter, Cuban reflected on his own battle with the regulator in 2008 and said that while Musk was under a different microscope, he just had to try to bite your tongue no matter how hard it is, because they dont care.

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Cuban stressed that the SEC was only in it for skin on the wall, because theyre — like, in my matter, there were people who left the SEC before the conclusion when I kicked their ass in the trial I had.

CNBC reports the Model S refresh will be modeled after the Model 3 in many ways, with a new minimalist interior like the one that received a lot of attention on the smaller car, premium seats from the Long Range and Performance Model 3, and the new drive units from the Model 3, including different motors, inverter and gearbox.

Correction: This article previously stated the max range was 345 miles, which is only for the Performance trim of the Model S.

Like Cuban, Musk also ran afoul of the SEC, but for a very different reason: Last August, Musk he tweeted that he had funding secured to take Tesla private, which sent shares surging.

The CNBC report also goes into some alleged details on the Fremont factorys preparations for producing the Tesla Model Y, though Tesla has yet to announce any significant details of its plan for production. Heres more on that from CNBC:

Its impressive, no question, but it still requires driver input to confirm the driver is alert and paying attention, it still requires hands on the wheel, and it still requires the person behind the wheel to be ready to take over in an instant. Its not suitable to drive in dense cities with complex and chaotic patterns of traffic and pedestrians, and, in actual usage, it was found to make some pretty questionable and occasionally illegal driving decisions, at least according to tests conducted by Consumer Reports.

These initiatives could raise costs again for Tesla, just as CEO Elon Musk has vowed to review every 10th page of outgoing expenses, personally. But starting up production of the Model Y in 2019 allows Tesla to tap into the growing SUV segment sooner rather than later, while a Model S refresh would help it maintain or grow its share within the declining market for luxury sedans.

Consumer Group Says Tesla's Autopilot Is 'Deceptive,' Calls For InvestigationTesla's Navigate Is Worse Than Human Driving: Consumer ReportsAll the Big Claims Elon Musk Made About Tesla's Autonomous Driving PlansAbout the authorJason TorchinskyJason TorchinskySenior Editor, Jalopnik • Running: 1973 VW Beetle, 2006 Scion xB, 1990 Nissan Pao, 1991 Yugo GV Plus • Not-so-running: 1973 Reliant Scimitar, 1977 Dodge Tioga RV (also, buy my book!)

The company has barely begun to place orders for new equipment to manufacture the Model Y, employees said. And while Musk has suggested that Tesla would probably make the crossover SUV in Fremont, Tesla hasnt officially announced that preparations in the factory had begun.

The currently enabled features require active driver supervision and do not make the vehicle autonomous. The activation and use of these features are dependent on achieving reliability far in excess of human drivers as demonstrated by billions of miles of experience, as well as regulatory approval, which may take longer in some jurisdictions. As these self-driving features evolve, your car will be continuously upgraded through over-the-air software updates.

Making way for Model Y production in Fremont will require Tesla to combine Model S and Model X production into one line, according to the insiders. These lines at the car plant take up a significant amount of floor space today, at least partly because the S and X are each made with a lot of parts.

Teslas Autopilot is currently a Level 2 semi-autonomous system. It is absolutely not full self-driving in any way. The system requires constant attention from the person in the drivers seat, and that person must have hands on the steering wheel and be ready to take over at a moments notice, which means the person behind the wheel needs to be engaged and paying attention to what the car is doing, at all times, just like if you were driving.

I think what CNBC means by the rather obvious statement that the S and X are each made with a lot of parts is that theyre each made with a lot of different parts. This makes combining the existing production lines difficult, though it shouldnt be impossible. Streamlining everything could save Tesla a lot of money.

Well likely hear more about Teslas plans for the Model Y and its Fremont plant from Elon Musk during the second quarter earnings call later this summer.

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