$4b in CapEx alone for <500k units/year manufacturing capacity for a single model is the worst program-level capital efficiency I've ever heard of... in an industry that is infamously capital inefficient. And that's just what Tesla spent in 2017!
https://twitter.com/john_beans/status/1305187700404756480
Some of that 2017 spend may have gone toward opening new sales/service locations and Superchargers to support the higher-volumes planned for Model 3. Then again, a good deal of 2016's $1.44b and 2018's $2.32b probably went into Model 3 manufacturing as well.
It's also super-important to recognize what all these billions bought: not a competitive flexible/scalable manufacturing system, but labor-intensive low-to-no-automation general assembly in a freaking tent. This makes M3 a capital efficiency failure of epic-historic proportions.
The worst part: Tesla could have totally avoided this fiasco by listening to manufacturing experts who predicted the "Alien Dreadnought" would end up in utter failure. Instead it was "Elon lands rockets on ships, bro" and "you're just trying to drive down the stock." 🤦♂️🤦♂️🤦♂️🤦♂️🤦♂️
That's the really scary part of this: the response from investors has been to throw more capital at Tesla, drive up the valuation, and angrily reject good advice as jealousy, insecurity and/or an effort to hurt Tesla. Talk about a recipe for not learning obvious lessons!
• • •
Missing some Tweet in this thread? You can try to
force a refresh
