10 True Facts From Tesla’s Model 3 CAEATFA Application

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When we get our hands on an exclusive document here at the Daily Kanban, we tend to write long and in-depth analyses. It’s just what we do. But because our latest document haul contains some cool facts that didn’t make it into our story and because we’re eager to show off our fun-loving, light-hearted sides we thought we would put together a listicle. Yes, like Buzzfeed. Just a good, old-fashioned list of things you might not have known, presented in a way that won’t take long to read and will hopefully make you smile. Because here at the Daily Kanban, learning can be fun!

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Documents Show Tesla Expanding Annual Production To About Half Of 500K Goal

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The Daily Kanban has obtained Tesla’s application [PDF here] to the California Alternative Energy and Advanced Transportation Financing Authority (CAEATFA) for about $100m worth of Sales and Use Tax Exclusion (STE) on its purchase of about $1.2 billion worth of production equipment to be used to produce its affordable Model 3. An analysis of key unredacted portions of this CAEATFA application shows that this massive investment –along with CAEATFA documents related to Tesla’s expansion of Model S and Model X vehicle production— will only increase the electric automaker’s annual production to between 230,000 and 300,000 units per year, well short of the firm’s 500,000 unit per year goal for 2018.

Though Tesla could reach its much-discussed half-million per year production goal through other means, these CAEATFA documents appear to validate Daily Kanban‘s analysis of air quality permits at Tesla’s Fremont plant which indicates a current production limit of about 230,000 units per year.  Tesla has yet to publicize any plans to apply for the new permits or make the new investments required to bring its production rate beyond these limits and towards its planned 2018 rate of 500,000 units per year.

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Tesla Plans Long-Term Expansion Of Model S & Model X Capacity

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Throughout its history, Tesla has always been a company that is looking ahead. Even when the company was hand-assembling tiny volumes of Roadsters, CEO Elon Musk’s “Top Secret Master Plan pointed the way towards lower prices and higher volume. Now, with two vehicles on the market and annual production volumes moving towards the six-figure mark, Musk told analysts on Tesla’s most recent earnings call that lower-cost, higher-volume Model 3 is “overwhelmingly our focus.” As for the Model S and Model X, Tesla’s so-called “Gen 2 vehicles,” Musk says “things feel really quite stable.”

That doesn’t mean that Tesla is done investing in its current lineup, however. In fact, the electric automaker’s latest approved application for sales and use tax exclusion (STE) from the California Alternative Energy and Advanced Transportation Financing Authority (CAEATFA) [PDF of CAEATFA’s staff report here] reveals that it is actually spending nearly half a billion dollars in order to expand the production capacity of its Gen 2 vehicles to 195,000 units per year by approximately 2021.

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Elon Take The Wheel

tesla-elon-musk-picture courtesy Forbes

If Tesla Motors has a single greatest asset, it’s not a factory or battery chemistry but the immense public trust that its CEO Elon Musk inspires. Faith in Musk’s abilities and good intentions underlies Tesla’s, passionate fan base, perceived technology leadership and high-flying valuation, and excuses its multitude of shortcomings in quality and customer service. Nothing exemplifies the power of this faith like Tesla’s ability to convince the public to trust its Autopilot system to navigate them through a landscape that kills more than 30,000 Americans each year. So as the number of Autopilot-related crashes begins to pile up and Tesla belatedly reveals that one of its customers died while using the system, it’s not surprising that faith in Musk and Tesla is taking a hit.

In my latest post at The Daily Beast, I teamed up with Nick Lum to investigate why so many Tesla owners appear to believe that Autopilot is more capable than it actually is and our findings are deeply troubling. From the very first announcement Musk and Tesla have misrepresented Autopilot’s capabilities in hopes of maintaining Tesla’s image as Silicon Valley’s most high-tech auto play in the face of Google’s far more serious autonomous drive program. Now, even after the first fatal crash, they are trying to maintain misperceptions of Autopilot’s capabilities by touting junk statistics that purport to demonstrate an Autopilot safety record that is superior to the average human driver. As Nick and I discovered, the deeply disingenuous nature of Tesla’s representations erode Tesla and Musk’s credibility on a fundamental level: either they do not understand the auto safety data or they are intentionally misleading the public. Either way, they refuse to acknowledge that either incompetence or deception has created a situation that has put the public at risk and continue to stand by safety claims that don’t hold up to even the slightest critical analysis.

As it turns out, there’s almost no end to the ways in which Tesla and Musk’s claims about Autopilot safety fall apart under scrutiny. In addition to the analysis presented in The Daily Beast, here are a few more ways in which to think critically about Tesla’s Autopilot claims.

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The secret history of GM’s Chinese bailout

baojun-630-sedan-picture courtesy quartz.com

When US taxpayers footed a $50 billion bill for the bailout of General Motors in 2009, few could have guessed that the biggest of the Detroit “Big Three” (GM, Chrysler, Ford) would go on to import Chinese cars to the United States. Yet just seven years after its publicly-funded and highly-politicized rescue, GM says it will do exactly that: early next year the automaker will begin shipping Chinese-made Buick Envision crossovers across the Pacific for sale at its US dealerships, with a plug-in hybrid version of Cadillac’s CT6 flagship sedan to follow. Anyone who believed that GM’s bailout would create a bulwark against a long-feared flood of Chinese cars might be puzzled to find the very same automaker championing Chinese imports. In fact, this move is just the latest in a pattern that dates back to 2009, when GM received a secretive Chinese “bailout” that appears to have turned America’s largest automaker into a Trojan horse for its Chinese partner.

More in Quartz

Everyone’s A Bad Driver (Except Me And My Autonomous Car)

In the good old days we worried that other humans were amoral instead of worrying that robots are amoral...

In the good old days we worried that other humans were amoral instead of worrying that robots are amoral…

When news broke this week that autonomous cars operated by Google and Delphi have been involved in 12 crashes since they began testing, the reaction was predictably breathless. Ever since the technology was announced, commentators have been obsessed with the technical and ethical shortcomings of the robot chauffeurs that Silicon Valley insists are the solution to the some 33,000 road deaths that take place in the US each year.

As driverless technology continues to advance, these fears won’t simply go away; on a psychological level, humans seem wired to fear anything that diminishes our sense of control, even if that sense of control is an illusion. This psychological barrier, irrational though it may be, demonstrates a crucial reality of the transition from cars to autonocars: developing technology that improves on the dismal safety record of human drivers is far easier than re-organizing social and individual values that have evolved over the hundred-year history of the automobile.

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Is China Merging Its “First” and “Second” Auto Works Into A Car Kaiju?

Preparing for the storm?

Preparing for the storm?

Consolidation has been the law of the auto industry ever since Ford’s assembly lines unlocked the brutal logic of scale, but fears that the US and Chinese markets may be cooling have automakers even more anxious to grab quick growth by merging. Last week, Fiat Chrysler Automobiles CEO Sergio Marchionne gave voice to the industry’s building anxiety by all but apologizing for his industry’s low rate of return on capital and threatening to explore mergers with Silicon Valley firms if no automaker wanted to acquire it. Marchionne’s position may be more desperate than some of his better-established competitors, but his basic logic is resounding across the auto industry.
When trading in shares of the Chinese automakers First Auto Works and Dongfeng (known until 1992 as “Second Auto Works”) were halted this week, the market’s initial read was that a merger between two of China’s biggest automakers was in the works. Dongfeng issued a swift denial of any merger plans but the Chinese state council shook up leadership at the two state-owned automakers, replacing the chairman at each with a man who had previously served at the other. With its automakers outmatched even in their home market, China appears to be pushing two of its “big four” manufacturers closer in hopes of creating a national champion with the scale to take on the global majors.

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FCA Feels The Crunch

Stuck in neutral... (courtesy: Bernstein Research)

Stuck in neutral… (courtesy: Bernstein Research)

Ever since Sergio Marchionne offered the auto bailout team a home for a bailed-out Chrysler, his Italo-American hodgepodge has been held together with bootpolish, high hopes and strong demand for trucks and SUVs. Had the Jeep and Ram brands been spun off to any other automaker, the Fiat, Chrysler and Dodge brands would almost have certainly ended up in a bankruptcy sale. Instead the House of Chrysler’s two perennial profit centers have found themselves stuck propping up failing mass market brands, just as they were under Cerberus and Daimler-Chrysler management. In the meantime, Chrysler’s cross-town rivals have improved their cars enough to push their truck-powered profit margins towards the 10% level in North America.  But despite strong growth in sales growth, volume and mix, FCA’s North American margins are “bizarrely low” according to research by Bernstein. And their research shows that the bootpolish is really starting to wear thin…

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