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Tesla emerges from 'production hell' poised to ramp things up in second half of year

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Elon Musk has big plans. After reporting mixed second-quarter financial results, the Tesla CEO filled investors and analysts in on his expectations for the rest of 2016 and the next few years, according to Reuters and Electrek.  Topics included second-half production, projected release dates and numbers for upcoming models, hints about Autopilot, and the company’s readiness for Model 3 production.

In its financial performance report, Tesla noted that earnings fell short of Wall Street expectations during the quarter. It recorded a loss of $1.06 per share versus the expected $0.53. Revenue, however, at $1.6 billion as measured by the company, was better than the $1.533 billion that was forecast. Musk said orders are up 67 percent from the same time last year. Production issues, however, caused the company to miss goals for the second quarter in a row. In the first half of the year total production was about 30,000 vehicles.

“We were in production hell for the first six months of the year,” Musk told analysts, according to Reuters. “Man, it was hell. And we managed to climb out of hell partway through June, and now the production line is humming and our suppliers mostly have their shit together.”

Musk fully expects to produce 50,000 Model S and Xs during the rest of 2016, which would put the company at the lower end of the original 80,000  to 90,000 vehicle production goal for the year.

The Model 3 remains on schedule to start production July 1, 2017, said Musk. He also said he will replace suppliers who cannot be ready in time. The Model 3 aluminum-stamping and paint centers are already in place. After production starts in 2017, the company is focused on producing 500,000 vehicles a year by 2018.

In other announcements, Musk said the company plans to open “a new retail location every four days on average” for the rest of 2016.  Musk also referred to the next version of Autopilot, which will be SAE Level 4 autonomy — that means the car won’t operate without a driver, but will be able to totally drive itself at times without the driver paying attention.

Speaking of Autopilot, Musk said the hardware required already exists, but the software is still in development. Musk has said a major event, “maybe toward the end of the year,” will include an announcement that will be “really big news,” and that Tesla will do the “obvious thing” — which may be the announcement of Level 4 autonomy for the upcoming Model 3.

Speaking about other Tesla models in the works, Musk said the Tesla Minibus and Tesla Semi will be unveiled in 6 to 9 months and be in production in 2 to 3 years. He also confirmed that the minibus will be built on the Model X chassis. The minibus and truck production ramp-up, however, will not interfere with other models coming first.

Tesla remains primarily focused on getting the Model 3 up to full production level, which it expects by 2018. The Model 3 chassis will be used with the Model Y, the small crossover vehicle. Musk said: “To be clear, the priority vehicle development after the Model 3 would be the Model Y, the compact SUV, because that’s also a car that we expect to see demand in the 500,000 to 1 million unit per year level.”

So, just in case you lost your road map for Tesla models: the Model S and Model X are already in production. The Model 3 is next, followed by the Model Y. Those four will complete the Tesla original S-3-X-Y lineup. After that will come the Minibus and the Semi. And don’t be surprised to see a roadster in there somewhere, though none was mentioned in this week’s calls or investor letters.

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Digital Trends Contributing Editor Bruce Brown is a member of the Smart Homes and Commerce teams. Bruce uses smart devices…
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