, 6 tweets, 2 min read Read on Twitter
1) Here's why $TSLA will continue to bleed red ink every quarter until it goes into Intensive Care: Together w/ Panasonic, $TSLA invested $8bn ($TSLA's $6bn & Pana's $2bn) to build 500K of Model 3 annual capacity. YTD the Model 3's capacity utilization has been only 56%.
2) But let's not forget "The Tent", or GA4 as $TSLA calls its last-minute, additional production line in Fremont's parking lot ($TSLA couldn't use its expensive automated lines inside Fremont, so they built The Tent, which they still use today).

3) Thanks to @lorakolodny's great article on GA4, we now know that The Tent can produce 30K Model 3s/quarter. So actual capacity is 155K/quarter or 620K/year. Based on this, Model 3 capacity utilization YTD has been 45%. In auto world, anything under 80% is seen as inefficient.
4) $TSLA's annual Model 3 output target for this year is said to be 250K. This would only amount to 50% capacity utilization (ex-Tent) or 40% if The Tent is included. The 500K/year level of output for the Model 3 was supposed to have been reached last year (ask Panasonic).
5) What about the 2H of 2018's profitable quarters? Well, the avg price of the Model 3 was over $60K back then & let's not forget that the S/X were contributing ~55% of total gross profit at the time, as their prices were 25% higher at the time.
6) Given the confirmed demand cliff in the US--which will hit the EU & China in Q1'20--just think how bad the losses will be at $TSLA from here on. Adding Shanghai GF3 will only add to Fremont's excess M3 capacity from Q1'20. And don't forget the S/X: YTD capute of 58%.
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