Waiting4M3
Active Member
If Tesla can't push it out to Q3, it won't be a big PR disaster I imagine. What's the worst Elon can say?
"Sorry guys we made too many cars, some of you are just gonna have to get your cars too soon."
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200,000th US Delivery
- Thread starter ValueAnalyst
- Start date
"Sorry guys we made too many cars, some of you are just gonna have to get your cars too soon."
They aren't totally stopping invites to US. They can continue to deliver in the US and get closer to the 200,000 number. It wouldn't make any sense to send invites to Canada at this late of a date in March unless they were trying to delay the 200,000 number until July. They won't hit it in the next few days so they will try to delay it another 3+ months until July 1st.
If they expected to hit it in the second quarter, they wouldn't be starting deliveries in Canada as that would lower the number of US deliveries that can take advantage of the full tax credit. The only logical explanation is that they will deliver a bunch to Canada in the 2nd quarter while slowing down (but still continuing with) US deliveries. They can continue to ramp up production and have a large number of cars ready for US delivery starting July 1st. By then, they could be producing 5000 Model 3s per week.
and now we have this
Fred says he’s had several times more people emailing him, tweeting him, etc, about the batch of Canadian invites that went out today vs any previous batch of invites
Tesla sends out massive batch of Model 3 invites to Canadian reservation holders
Fred says he’s had several times more people emailing him, tweeting him, etc, about the batch of Canadian invites that went out today vs any previous batch of invites
Tesla sends out massive batch of Model 3 invites to Canadian reservation holders
A while back I thought Tesla might start deliveries to Canada early to delay the 200K to the beginning of a quarter.
Don't forget he is based in Canada himself. We're probably seeing the effects of his local network in action rather than an unbiased sample of batch size. Maybe the spreadsheet is biased the other way around.
Assuming 20k deliveries in the US this year so far, we still have some 18k deliveries left. 10k for S/X (US estimated delivery is still June so they seem to be intent to stuff that channel) leaves 8k for Model 3. That's really not a lot. If Tesla really hits 2k/week by mid April and ramps from there we end up at over 30k Model 3s produced in Q2, let's call it 30k deliverable. Of those, 22k need to go to Canada. 50% defers, 50% orders. Needs 44k reservations in Canada. We don't have those. Remember that every first day reservation is already called upon to invite. That's mission impossible.
Basically : 200k to July only works if 1) Tesla is willing to warehouse in the order of 10 thousand cars or 2) Model 3 fails to ramp up in Q2 as well.
At this point, I think inviting Canadians is a hedge by Tesla should they fail to ramp in Q2.
This view makes sense to me. I'd be interested in reading @SteveG3 's response to this, because I can see both sides, which I think speaks to the "hedge by Tesla should they fail to ramp in Q2" clause.
Reciprocity
Active Member
Very unlikely that there are 44k Canadian reservations. If you assume 500,000 total and half are US and half our non US. Canada has about 10% the population of US so that would be around 25,000. The split has been more like 70% defer. So there are not nearly enough Canadian reservations to cover the excess. I think its more likely that Tesla has run out US reservations that want he first production cars and they are not ready for dual motor, though I expect it very soon because they will run out of people who want first production. A couple of caveats: The Canadian tax incentives are limited in time? That could draw more people to first production. Canada might be more like California in that a higher percentage of people could be holding reservations so the population extrapolation could be off. We could also assume that more North American reservations as a percent of the total. These factors could get you do the 50/50 split and maybe 40,000 total reservations with 20k willing to take the first production to get the incentives.
Self quoting:
Based on this and a 3k/w average for Q2, you would be more like 39,000, with 13,000 going to US, with 20,000 to Canada could work if they could redirect just 6,000 of those model S/X to all places outside the US. That is not as daunting as you might think with China and Norway probably buying that many already. Also, Tax incentives are back in Germany, which is growing fast and HK.
That is a lot of IFs and Buts and I am still of the mind that I will believe it when I see it. It will be interesting to see how S/X track vs the same months and quarters last year. They could have already started to divert cars in Q1. I recall a huge parking lot next to a huge boat with 2000 S/X from this quarter. The good news is that we will be able to see this in advance. Meaning, we will be able to see how many US S/X get delivered every month and we will be able to get an idea of how many 3s are making it into to Canada vs the US. If there really is a huge push to Canada, you MUST have dual motor soon. You will probably run out of reservation holders to soon without.
Sure,
1) I had actually considered the fact that Fred is from Canada, but, I strongly suspect the emails/tweets he receives are considerably more about Electrek's network, than the network of Fred's personal life. I'd agree Electrek itself might have some Canadian skew, but, not enough to where I'd noticed it in years of reading its comments section, so I very highly doubt explanatory for the bulk of a roughly 3-fold disparity
2) I agree with Schonelucht's rough numbers of how many 3s will be produced and needed to be sent to Canada for this strategy to work. Where I disagree is Schone's take rate of 50%. I see Tesla trying to get the dual motor version of the car ready to entice the bulk of Canadian reservationists. For now, they are working through the list finding those willing to take the initial configuration.
fwiw, even the SR version of the dual motor car is not off the table, though it is not necessarily needed to get enough Canadians to configure for this strategy to work. I write SR is not off the table as Tesla went from one ambiguous use of language to another on the timing of the dual motor SR version of the car (though I'd put odds of SR at under 50%).
3) Two other factors that Shone did not consider- Tesla can build up to roughly 5K Model 3s and stock pile them at the Fremont factory, their new California delivery centers, car carriers in transit, and service centers across the US (I've seen the modest sized one in Raleigh with up to about 30 cars awaiting delivery outside the building, more space inside... I got a glimpse inside a SC in DC, and it looked like they had tons of indoor space). Finally, there's the possibility that Tesla takes further pressure off hitting the 200K mark in the US, by building in March or early April a modest amount, say 2-3K combined of S and X, in a few popular configurations, shipping somewhere like the EU (possibly China, but, that would mean a longer shipping period), and looking to sell them as unused inventory cars within the time remaining in Q2 once the cars arrive in the EU.
4) new information - last night I saw that the Canadian "invited to configure" set of people now includes non-owners who reserved after the first day. This amid reading a couple of posts yesterday from members here at TMC who were under the impression that no one in the US in that category has been invited to configure. I don't explicitly know that the part about US reservationists is the case, perhaps someone else here does.
1) How would you explain then the radical different numbers the TMC spreadsheet is showing? (100 Canadian invites versus 1500+ US ones)
2) For both dual motors and short range time is ticking. It's still possible but realistically they need to come out by end of this month to make a significant impact. But is a take rate of nearly 100% plausible?
3) If Tesla is willing to warehouse, sure. Still the numbers are mindboggling. 5000 cars 'in transit' is already $300M missed revenue. And a direct hit to the cash flow. On the S/X front, if the scenario you paint were the case, delivery estimate would already be August at least. It's still June. Or S/X demand collapsed which is not quite credible.
4) It also signals that they are already through a very significant part of the Canadian reservation list.
How do you feel about the alternative explanation : it's all about the Ontario rebate.
2) For both dual motors and short range time is ticking. It's still possible but realistically they need to come out by end of this month to make a significant impact. But is a take rate of nearly 100% plausible?
3) If Tesla is willing to warehouse, sure. Still the numbers are mindboggling. 5000 cars 'in transit' is already $300M missed revenue. And a direct hit to the cash flow. On the S/X front, if the scenario you paint were the case, delivery estimate would already be August at least. It's still June. Or S/X demand collapsed which is not quite credible.
4) It also signals that they are already through a very significant part of the Canadian reservation list.
How do you feel about the alternative explanation : it's all about the Ontario rebate.
I thought the Ontario rebate was only good for orders that had already been placed by x date earlier this month. Wouldn't that make all Model 3 orders too late to qualify...or was the deadline earlier this month only for more expensive cars?
EDIT: Looks like it was ending for cars over $75000 MSRP for base model. With the election coming up, there is fear the rebate could be canceled for all cars.
BTW, currently Tesla isn't on the list of eligible cars: Eligible Electric Vehicles
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I won’t have time to give my reasoning until later today (and frankly I cannot devote anywhere near the time to changing your view on this as it took to convince you that the 200K scenario is plausible last month), but, quick preview: none of your responses look even modestly convincing to me. Perhaps you are simply playing devil’s advocate and you are no more convinced by what you wrote than I am. I’m posting this because if this is such a devil’s scenario, I’d really appreciate it if you just let me know that- I’m quite busy these days.
fwiw, I’d say, about 30% chance this is about concern incentives in Ontario will be lost after the next election, 70% about positioning to try to defer crossing 200K mark in the US.
This is certainly not devil's advocate. I was never anticipating the ramp to be this bad. Had it be even half of projected volumes by end of year, we would already be on the verge of 200k today. So yes, once the evidence of the ramp failure was impossible to ignore, I had to re-adjust. Today, I am still hoping that the ramp will at least be close to guidance in Q2. In that case there is no way they are going to delay the 200k. But, history being history, I must admit there is a real possibility that Q2 ramp is going to be underwhelming too. To me 200k is merely a matter of numbers. There are some ways Tesla can shift a number of US deliveries (either by warehousing or shipping to Canada). But those numbers are limited. 20k or so. Be it warehoused or be it Canada. You assume they can shift more. Fine, maybe 25k. Either way, that number plus 8k then becomes the max M3 they can produce this quarter. It's that simple. Name your number.
According to Inside EVs' numbers, as of the end of last month 169,431 US deliveries. We don't know how many deliveries they made this month, but it gives them 30K deliveries over 4 months to push the number out to July 1. That's 7500 cars a month, a little less than 2000 a week. Next week we'll know how many US sales they made in March which will give us a better idea where they are at the end of this quarter.
If M3 production is not that far up the ramp yet, they can push off the 200K by filling out as many Canadian reservations as possible in the next quarter. At the end of next quarter they can also move cars to delivery centers, but hold off delivery until July 1. It will cause a storage problem at the end of June, but its worth it down the line. They will take a hit in the 2nd quarter for lower delivery numbers, but the 3rd quarter will be huge. With the clock ticking on the incentive, that will spur sales the rest of 2018.
Kill two birds with one stone/Faire d'une pierre deux coups!
I think you meant feed two birds with one hand.
I really hope we can ramp ASAP and 200,000th US delivery thing becomes a blip in history. Isn’t the tax credit supposed to be expanded/extended anyway? Why take all the near-certain risk of a horrendous 2Q, with the warehousing and the shipping and all that Jazz, for some maybe-potential benefit in the future that may or may not happen?
Waiting4M3
Active Member
I think it's a prudent thing to do temper the pace of US delivery early in Q2, in order to leave all options open. They will have to deliver some cars in Canada anyway, no resources are wasted by doing deliveries in Apr/May. They can wait till June to see how close they are in the US to 200K before deciding to do those special maneuvers that you think are risky. Until then, it doesn't cost them anything to leave the options open IMO.
I think it comes down to how the model 3 ramp is progressing. Tesla will have to stay below 20,000 US deliveries or so in Q2 to get one more quarter of the tax credit. The following is of course pure speculation, with completely made up numbers.
They can delay S+X orders by reversing the usual procedure: instead of shipping to Asia in April, then to Europe, then the east coast and finally the west coast, they can simply ship more cars to Asia and Europe in June. Some of these can be inventory cars. They can also add to their US inventory in June. Maybe they can go as low as 8,000 S+X delivered in the US in Q2. That leaves 12,000 for model 3.
I’m not sure how many cars they can realistically send to Canada. Maybe 10,000, if they add some more options. Then they can add some model 3’s as demos/loaners, and finally they can stockpile.
I think this strategy works as long as model 3 production for Q2 stays below 25,000 or so. If it’s above 30,000 then it’s simply impossible.
This will of course cause the Q2 financials to look worse, but I think Wall Street can figure this one out and won’t punish Tesla for it. Then Tesla can use this as a clean break, and stop timing deliveries to the end of quarters.
They can delay S+X orders by reversing the usual procedure: instead of shipping to Asia in April, then to Europe, then the east coast and finally the west coast, they can simply ship more cars to Asia and Europe in June. Some of these can be inventory cars. They can also add to their US inventory in June. Maybe they can go as low as 8,000 S+X delivered in the US in Q2. That leaves 12,000 for model 3.
I’m not sure how many cars they can realistically send to Canada. Maybe 10,000, if they add some more options. Then they can add some model 3’s as demos/loaners, and finally they can stockpile.
I think this strategy works as long as model 3 production for Q2 stays below 25,000 or so. If it’s above 30,000 then it’s simply impossible.
This will of course cause the Q2 financials to look worse, but I think Wall Street can figure this one out and won’t punish Tesla for it. Then Tesla can use this as a clean break, and stop timing deliveries to the end of quarters.
Ulmo
Active Member
Would that mean an end to the fill-the-boat mentality of overseas shipments? Logistics is starting to be fun at Tesla! I hope they enjoy it, because the considerations are full on.
How much storage does Tesla have for Model 3? This is something they've considered for years, so whatever they have on the table would go into play. Livermore is probably already used up by Model 3 and Semi, so I'm thinking mostly the many Tesla Service Centers all around the world could be maxed out for inventory.
A small drop in the bucket, but maybe they can pull next year's order of 75 Xs forward to this year's 75:
Fleet of Tesla taxis completed over 64,000 trips in 6 months, saved ~60,000 gallons of fuel
Fleet of Tesla taxis completed over 64,000 trips in 6 months, saved ~60,000 gallons of fuel
