2Q 2013 Model S Deliveries Potential Surprise

[DonPedro]

I think there is strong indication that VINs are not produced sequentially anymore. EU VINs have been distributed seemingly randomly - single-digit EU Signature reservation holders haven't been assigned, while people that are #2000 or 3000 in line have got. My translation of Tesla's response to a question from someone who was concerned about being unfairly bypassed in the line:

Yes, it is correct that we have started the process of assigning VINs [to European customers]. We have changed the timing of assigning VINs, and the first step in that process is a mass update of our systems.
This is an automated process that will move slowly but surely, and there is nothing exceptional about it.
A VIN is a completely random number, and will be different from the reservation just before and just after you.

There is nothing to worry about, it has no impact on the delivery, and as signature holder you will be one of the very first to receive the car during the beginning of August.

(My emphasis).

My guess is that Tesla does not want people to be able to find out about production volumes outside quarterly reports and guidance, and that they are therefore now intentionally assigning VINs and producing cars quite out of sequence.

 

[v12 to 12v]

There is also a VIN in the 13000's according to their spreadsheet

Welcome to Google Docs

 

[brianman]

There is nothing to worry about, it has no impact on the delivery, and as signature holder you will be one of the very first to receive the car during the beginning of August.

An observation rather than a nitpick:
The underlined phrasing isn't polished yet. This likely means it's relatively new language (and/or paraphrased), rather than a practiced official response that has been pasted into the e-mail.

 

[DonPedro]

An observation rather than a nitpick:
The underlined phrasing isn't polished yet. This likely means it's relatively new language (and/or paraphrased), rather than a practiced official response that has been pasted into the e-mail.

Well, this was only a translation. Nevertheless, the awkward language is there in the Norwegian language email as well.

 

[Citizen-T]

So, there is chatter on the forums today that there are no loaner cars to be had, they've all been sold. Sounds like perhaps we should not be subtracting 80ish units from this quarter's production for loaners. Looks like those are sales too.

 

[blakegallagher]

That is awesome if the Loaners are sold out. Hope this becomes a predictable pattern.

 

[ShortSlaver]

So, there is chatter on the forums today that there are no loaner cars to be had, they've all been sold. Sounds like perhaps we should not be subtracting 80ish units from this quarter's production for loaners. Looks like those are sales too.

That's awesome. People still like to go and drive home in the new car.

 

[adiggs]

So, there is chatter on the forums today that there are no loaner cars to be had, they've all been sold. Sounds like perhaps we should not be subtracting 80ish units from this quarter's production for loaners. Looks like those are sales too.

That commentary is consistent with what I've been hearing in the Portland area. The problem isn't just service loaners - they're selling the floor cars and test drive cars so fast, they are sometimes scrambling just to keep a Model S in the showroom, much less a test drive and loaners.

Bad for me as I'm going to be without my car in a couple of weeks, and would have really liked a Model S loaner. Good for me as I also own a little slice of the company.

 

[ckessel]

That is awesome if the Loaners are sold out. Hope this becomes a predictable pattern.

In my mind, that's not awesome. Service has been and issue, enough that Tesla touted this whole thing with loaners and pickup/dropoff. But they're selling loaners like cars off a lot, consequently we have no loaners for service, which in turn keeps service in the "not awesome" category.

 

[blakegallagher]

In my mind, that's not awesome. Service has been and issue, enough that Tesla touted this whole thing with loaners and pickup/dropoff. But they're selling loaners like cars off a lot, consequently we have no loaners for service, which in turn keeps service in the "not awesome" category.

I understand that side of it but it is only growing pains in my opinion. They will produce more of these heavily optioned loaners as they sell more than they planned on selling. This will help shareholders for a long time to come. People will pay more to get the sooner which is great for the bottom line of the come. Since I see a wait-list for years to come this could be a nice medium term profit boost

 

[30seconds]

This is also a good sign of demand. Even if Q2 deliveries are at what tesla is guiding at, I think any uptick in demand or year end deliveries (22-23k?) along with plans to accelerate production capacity will be big news

 

[ckessel]

I understand that side of it but it is only growing pains in my opinion. They will produce more of these heavily optioned loaners as they sell more than they planned on selling. This will help shareholders for a long time to come. People will pay more to get the sooner which is great for the bottom line of the come. Since I see a wait-list for years to come this could be a nice medium term profit boost

Maybe. Seems like "eating the grain seed". Sell the showroom cars and loaners and you've got nothing to show people and a poor experience for existing customers. Tesla needs to take a 1-time hit and get these cars in service. They said they realized service wasn't great and were going to fix that. It looks to me like they're not fixing it and as long as there are enough people willing to take what's "on the lot" rather than build to order (which will be always), the service problem will remain unaddressed.

 

[brianman]

In my mind, that's not awesome. Service has been and issue, enough that Tesla touted this whole thing with loaners and pickup/dropoff. But they're selling loaners like cars off a lot, consequently we have no loaners for service, which in turn keeps service in the "not awesome" category.

I called this out previously in another thread. I figure which one.

In other related news, Bellevue SC has 4 loaners. I got one of them today. Perf +.

 

[blakegallagher]

Maybe. Seems like "eating the grain seed". Sell the showroom cars and loaners and you've got nothing to show people and a poor experience for existing customers. Tesla needs to take a 1-time hit and get these cars in service. They said they realized service wasn't great and were going to fix that. It looks to me like they're not fixing it and as long as there are enough people willing to take what's "on the lot" rather than build to order (which will be always), the service problem will remain unaddressed.

Im sure they will get this fixed and keep more on hand. On the other hand people are paying for configurations that are not ideal because the wait-list is 2-3 months. Seems like service can not be all that bad.

 

[jeff_adams]

I suspect much of this has to do with end of the quarter sales numbers. Elon said they would likely report a small loss. If they are close enough to make a profit, they should go for it. That makes a HUGE difference in stock value if they hit 2 quarters in a row of profit.

 

[ckessel]

That makes a HUGE difference in stock value if they hit 2 quarters in a row of profit.

Yea, but frankly, I really don't give a crap about how good this individual quarter looks to some external talking heads. Tesla already has the money from their offering and paid off their debt.

Tesla's view should, and Elon has said as much, be about the stock value in 5+ years. Any gyrations to make this quarter look good at the expense of showrooms or service is sacrificing the long term.

 

[Krugerrand]

Yea, but frankly, I really don't give a crap about how good this individual quarter looks to some external talking heads. Tesla already has the money from their offering and paid off their debt.

Tesla's view should, and Elon has said as much, be about the stock value in 5+ years. Any gyrations to make this quarter look good at the expense of showrooms or service is sacrificing the long term.

You're jumping to conclusions based on having virtually no data. Until you actually know what happened to those few loaner cars (you have no idea if it was 1 or 100, or who they went to), you might want to just take a little, itty, bitty breath.

 

[Darko]

You're jumping to conclusions based on having virtually no data. Until you actually know what happened to those few loaner cars (you have no idea if it was 1 or 100, or who they went to), you might want to just take a little, itty, bitty breath.

Um, I think ckessel was saying exactly that the short-term data doesn't matter, good or bad, which is taking a bit of breath....I think your beef is with the previous post.

 

[ckessel]

You're jumping to conclusions based on having virtually no data. Until you actually know what happened to those few loaner cars (you have no idea if it was 1 or 100, or who they went to), you might want to just take a little, itty, bitty breath.

One, I was refuting jeff's claims that a profitable quarter was a big deal (and thus worth selling out the show room and loaners to achieve). Whether the loaners were sold out or not is irrelevant in terms of debating jeff's point.

Second, Portland, OR is selling them out. Straight from the sales folks mouths in Portland. Further, they told me they're selling out the show room and loaners nation wide.

 

[jeff_adams]

Yea, but frankly, I really don't give a crap about how good this individual quarter looks to some external talking heads. Tesla already has the money from their offering and paid off their debt.

Tesla's view should, and Elon has said as much, be about the stock value in 5+ years. Any gyrations to make this quarter look good at the expense of showrooms or service is sacrificing the long term.

It's more than impressing the press, it's about strengthening the shareholder's confidence. Elon has several performance goals in his contract as CEO.

One of the big ones is a stock bonus once he hits 4 consecutive profitable quarters.

Tesla has been quite confident in a profitable 4th quarter for a while now. They also have built up some inventory that's getting shipped to Europe in Q3. If Elon believes they will be profitable in Q3 and Q4, you just KNOW he'll go for it near the end of Q2. We can certainly debate if it's the right thing to do, but I think most of us would make that call if we had confidence in a profitable 3rd and 4th quarter.

Doing this could speed up Model X and Genlll launches by 6 months.