Part 4/7:
He asserts that during this transitional phase, such as retooling factories, production inevitably suffers in the short term. Tesla's production strategy differs from that of traditional automotive manufacturers, leading to unique challenges that don’t readily translate to a snapshot of declining sales.
The Role of Manufacturing Cycles
Brian emphasizes that Tesla is not like conventional car manufacturers that can broadly maintain inventory levels while retooling. Instead, Tesla opted to minimize inventory to facilitate a rapid switch to the new model Y, thereby affecting the quarter's delivery numbers. He illustrates this point by providing estimates of how much production was lost due to factory shutdowns.