Editor's Welcome 

Tesla reported Q2 2016 earnings this past week and the big takeaway, at least for me personally, was Tesla showing fiscal discipline. Tesla's capital expenditures came in much lower than expected and Tesla is also keeping their operating expenses in check as well. One of the biggest reasons for this can be attributed to Tesla's "do more with what we have" attitude that was emphasized even greater with the new CFO, Jason Wheeler. Prior to the new CFO, Tesla was leasing/buying buildings (ie., Fremont, Lathrop, etc) aggressively in preparation for Model 3. But since Wheeler took his position, Tesla is now touting their new physics "first principle" approach to manufacturing and volumetric density of factories. In other words, rather than needing new buildings, Tesla has found a way to design their current factories to handle a much larger production load (ie., create more floors and use all the vertical space in the factory). As a result, Tesla is able to save hundreds of millions of dollars and is in a much stronger fiscal position entering Model 3 production.

Last weekend I was able to visit the Gigafactory and take a tour. I was allowed to record the entire tour (45 minutes) and here's a link to the YouTube video.

The Gigafactory is massive in size and it's a clear demonstration of Tesla and Elon's mega-vision to change the world and "move the needle" in transitioning the world to sustainable energy. The Gigafactory is Tesla's secret sauce to make the Model 3 affordable. Other car companies take a $20k car, make it electric and charge $35k-40k. But with the Model 3, Tesla is taking a $45k car (in terms of performance, handle, features) and charging $35k. This is why there are already 400k(?) reservations for the car and will be the most significant car in history, next to the Model T.

I was surprised to find out that the Gigafactory architectural and design team is very small, 10-15 people, and very young (most seemed to be in their 20s). One shared that he works super long days but he loves the excitement and challenge of his job.

First cell production is slated to start at the end of the year. And it seems like there were be separate sections in the Gigafactory for stationary storage cell production and auto cell production. Once stationary storage cell production starts ramping next year, we'll likely to see the ramping of the Powerpack and Powerball products.

Lastly, I wanted to thank those that used my referral link http://ts.la/david7556 to order a new Model S/X. Because of you, I was able to receive a Gigafactory invite. A new referral program has started and I need 9 more referrals by Oct 15 in order to receive an invite to Tesla's next event.

Update: If you're interested in hearing more of my thoughts on Tesla's Gigafactory, I recorded a video you can find here.

DaveT, Editor (subscriber count: 1841)

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