Exhibit 99.1

  

     Tesla Third Quarter 2017 Update

 

Surpassed 250,000 vehicles delivered since inception

Record Model S and Model X net orders and deliveries in Q3 2017

About 100,000 Model S and X deliveries projected for 2017

Model 3 production steadily increasing

Cash balance of $3.5B entering Q4 2017

 

 

In Q3, we delivered the 250,000th Tesla.  This is a significant milestone as the Tesla fleet is now about 100 times larger than it was five years ago, just before the launch of Model S.

 

During Q3, we received record net orders for Model S and Model X, setting the stage for what should be an all-time record for deliveries of these vehicles in Q4.  With the addition of Model 3 as a compelling, high-performance and long-range electric vehicle that is also affordable, the Tesla fleet should grow even faster in the years ahead.

 

Shifting road transportation from internal combustion engines to electric powertrains is only half the Tesla story.  We are also experiencing growing demand for our Powerwall and Powerpack energy storage products for residential and commercial applications, and we are increasing production of these products.  Energy generation with Solar Roof will become a bigger portion of our business next year as we ramp production at Gigafactory 2 in Buffalo.  Sustainable energy generation and storage is a critical part of Tesla’s mission and will drive long‑term revenue growth and profits.

 

ADVANCING SUSTAINABLE TRANSPORT

The initial phase of manufacturing any new vehicle is always challenging, and the Model 3 production ramp is no exception – particularly given our focus on highly automated manufacturing processes that will ultimately result in higher volumes at significantly lower costs.  Model 3 has been designed for manufacturability, so the car itself is not difficult to build.  That said, the Model 3 production process will be vastly more automated than the production process of Model S, Model X or almost any other car on the market today, and bringing this level of automation online is simply challenging in the early stages of the ramp.  We continue to make progress resolving early bottlenecks related to these issues, and there remain no fundamental problems with our supply chain or any of our production processes.

 

Several manufacturing lines, such as drive unit, seat assembly, paint shop and stamping, have demonstrated a manufacturing ability in excess of 1,000 units per week during burst builds of short duration.  Other lines, such as battery pack assembly, body shop welding and final vehicle assembly, have demonstrated burst builds of about 500 units per week and are ramping up quickly.  Likewise, cell production at Gigafactory 1 continues to ramp, and current cell production makes it one of the largest battery cell manufacturing facilities in the world.

 

Model 3 Body Shop Welding

(Video Embedded)

 

 

Model 3 Final Vehicle Assembly
(Video Embedded)

 

To date, our primary production constraint has been in the battery module assembly line at Gigafactory 1, where cells are packaged into modules.  Four modules are packaged into an aluminum case to form a Model 3 battery pack.  The combined complexity of module design and its automated manufacturing process has taken this line longer to ramp than expected. The biggest challenge is that the first two zones of a four zone process, key elements of which were done by manufacturing systems suppliers, had to be taken over and significantly redesigned by Tesla. We have redirected our best engineering talent to fine-tune the automated processes and related robotic programming, and we are confident that throughput will increase substantially in upcoming weeks and ultimately be capable of production rates significantly greater than the original specification.  

 

While we continue to make significant progress each week in fixing Model 3 bottlenecks, the nature of manufacturing challenges during a ramp such as this makes it difficult to predict exactly how long it will take for all bottlenecks to be cleared or when new ones will appear.  Based on what we know now, we currently expect to achieve a production rate of 5,000 Model 3 vehicles per week by late Q1 2018, recognizing that our production growth rate is like a stepped exponential, so there can be large forward jumps from one week to the next.  We will provide an update when we announce Q4 production and delivery numbers in the first few days of January.  With respect to the timing for producing 10,000 units per week, it has always been our intention to implement that capacity addition after we have achieved a 5,000 per week run rate.  That will enable us to make the next generation of automation even better while making our capex spend significantly more efficient.

 


The following information was filed by Tesla, Inc. (TSLA) on Wednesday, November 1, 2017 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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