Tesla’s latest quarterly earnings call was quite interesting. Chief executive Elon Musk’s bizarre tantrums during the call caused an 8% decline in the company’s stock price. Though the EV maker posted its highest quarterly loss ever, Musk was happy that Tesla was able to beat the Wall Street expectations. He also indicated that the Tesla Model Y launch date was still a couple of years away. Given the company’s track record, we wouldn’t be surprised if the Tesla Model Y launch date is pushed back further.
Musk told investors during the earnings call that Model Y production wouldn’t start until “early 2020” at the earliest. The SUV crossover will likely be produced at a new factory that would be announced towards the end of this year. He added that the Model Y production would start a “manufacturing revolution,” without elaborating on what kind of revolution it would be. That’s quite interesting given the company is still facing difficulties with the Model 3 production.
It’s worth pointing out that the EV maker was originally aiming for a 2019 Tesla Model Y launch date. But then it pushed the release to 2020, saying the vehicle would be built on an entirely new platform. Later Tesla scrapped the plan to build a new platform for Model Y. Instead, the new vehicle would be based on the Model 3 architecture. However, it will have many internal changes to simplify the manufacturing process.
For instance, the Model Y will ditch the 12V battery architecture that is used on other Tesla vehicles. It would significantly reduce the overall electric wiring. Less wiring means more automation. Musk has said that he would introduce more robots in the company’s production line. A “vast majority” of the company’s manufacturing process is already automated, but Musk seems to be planning to take it to a whole new level.
Tesla’s Fremont facility is “jammed to the grills,” so the Model Y needs to be produced at a new location. He promised the Model Y is going to be “incredible from a manufacturing standpoint.” The Tesla CEO also told investors that the company was spending some money on early Model Y designs, but hasn’t yet spent any capital expenditures on the upcoming vehicle.
The California company is still struggling to ramp up the Model 3 production, for which it has received nearly 500,000 pre-orders. It was able to produce only 2,270 vehicles per week in April, falling far short of its 5,000 units per week goal. Tesla told shareholders that it expects to achieve the original goal of 5,000 units per week in a couple of months.
Last month, sources familiar with the matter told Reuters that the Model Y could enter production in November 2019 and go on sale in early 2020. Tesla has reportedly sent out a Request for Information (RFI) about Model Y parts to component suppliers. Suppliers expect the EV maker to produce 500,000 Model Y units per year in the US. Tesla is also setting up a factory in China to meet the local demand and export to neighboring countries.
The China plant won’t be able to roll out the first Model Y until 2021 or later. Sources told Reuters that the Chinese factory would make cars in smaller quantities, likely tens of thousands of units. Tesla’s RFI to potential suppliers does not reveal much about the Model Y. The company has told suppliers that the SUV would be built at the Fremont facility. The EV maker claims it doesn’t need to raise more funds for capital expenditures. But Moody’s estimates that Tesla could raise at least $2 billion as it continues to burn cash.
Folks at Autocar predict that the Model Y would launch with fully autonomous driving capabilities. The vehicle is said to be equipped with eight cameras, 12 ultrasonic sensors, a forward-facing radar system, and a super computer capable of processing data 40x faster than previously. The Tesla Model Y launch date is still a couple of years away, but the vehicle could significantly boost Tesla’s revenues. Crossover and SUV sales in the US have been growing much faster than sedans.
When RBC Capital Markets analyst Joseph Spak asked Musk about Model 3 reservations, the Tesla CEO responded, “These questions are so dry. They’re killing me.” He also threw tantrums at Bernstein & Co analyst Antonio Sacconaghi, who asked: And so where specifically will you be in terms of capital requirements? Musk fired, “Excuse me. Next. Boring, bone-head questions are not cool.” The analysts were not happy, and it was reflected in Tesla’s stock price.
Tesla posted a net loss of $710 million on $3.41 billion in revenue for the January-March quarter. The company had incurred a loss of $675 million with $3.3 billion in revenues during the fourth quarter of 2017.