The nice thing about Tesla’s Q1 volume miss is that, like all quarterly data, by the time we receive the news, the conveyor belt of time has already moved it into the past. Since investing is about the future, Tesla’s Q1 miss should nag us only if it portends future problems. Does it?
It’s hard to see how. Model X production is a problem solved. It’s down the conveyor belt. And Model ☰ production is a potential problem recognized and dissected years before it arrives on that conveyor belt. The company has talked about this very subject for over a year already. Of course, the deluge of orders is bound to put additional pressure on the company. Pressure isn’t good, although it’s a way of life for Tesla. Here’s a direct Musk quote from the 2014 Q4 conference call, about Tesla’s preparedness for Model ☰:
“We don’t want the delays that affected the X to affect the Model III. We’re really being quite conscientious about this. There are things we could do with the Model III platform that are really adventurous but would put the schedule at risk. So what we’re going to do is have something that’s going to be an amazing car but it won’t be the most adventurous version the Model III to begin with. But we will then have the more different version of the Model III, on the Model III platform, following the initial version.”
The more adventurous version might be Model Y. Or maybe it’s just a super-duper ☰. Either way, Tesla has long recognized “it” as a potential repeat of Model X and has pushed “it” up the conveyor belt instead of trying to assemble maximum Shock/Awe right away. A good decision, since mild-mannered Model ☰ is proving to have more than enough S/A.
Glancing today’s headlines, reporters are having fun with a new vocab word: “hubris.” They apparently missed the 2015 Q4 conference call, during which Musk said exactly what he said yesterday:
“We put too many new features and technology — too many great things at once — into a product. In retrospect, it would have been a better decision to do fewer things with the first version of X, and then roll in the capabilities and features and new technologies over time . . . there was some hubris there. The net result, however, is that the Model X is an amazing car.”