3 changes Tesla could make to significantly improve ordering process

[MarkBrokeIt]

The way Tesla is handling M3 orders is entirely unacceptable. It is souring many people on both the experience & the brand.


Things Tesla should change ASAP:
#1 - Stop being so damn secretive about the reservation/delivery process

This isn't a top secret government project (though they are building parts of it in the desert in NV...). All we see right now is chaos & frustration from people waiting for their orders.

Let's set aside the prioritization for current owners - that should remain. For non-owners, the priority should be based off reservation date/time. It should be something similar to FIFO, though they'd probably want to do something different to normalize reservation times for day 1 folks. And most importantly, however they decide to process them they should be transparent with all of their current customers & communicate updates early & often.

I'm a day 1 reservation holder that has been waiting on a VIN for 3w, and I live in WA & hope to take delivery before the end of May & the expiration of a sales tax exemption. Based off the visible backlog, I realize that making this change would mean that my car doesn't get delivered by that date. That's fine with me, as long as there is some logical order to this process. (ok, it would still suck, but I'd understand it...)

#2 - Stop sending out configuration emails so far in advance

For the majority of people, arrival of this email has been false hope that their order will be here "soon". The reality is that it won't. There are production/delivery backlogs that they need to work through. They should stop sending these emails out until they've caught up on at least 75% of the backlog, to reduce the # of people waiting in this interim state. This will significantly reduce the # of complaints about the long wait times, and will overall improve the perception of the Tesla delivery process. This would also allow them to build a better process to track an order from configuration through delivery, so you know where your car is at every step of the way, yet another way they can show that they are changing the automotive industry in a positive way.

#3 - Stop requiring a large additional deposit at the time of configuration

There's absolutely zero reason to require this right now. There's what...ONE hardware choice (wheels) & then paint color? If someone backs out after config, the car can easily be reassigned (there are literally hundreds/thousands waiting on any given color/wheel combo). But I get it...they want us to have some additional skin in the game. Why not just say the process of configuring turns our $1k deposits into non-refundable deposits now? When there are more config options, then you can require a larger deposit. This change will significantly reduce the rage levels of people that have given Tesla a large sum of money in return for zero information about the arrival of their vehicle.

I eagerly await your constructive additions to this manifesto.

 

[jimmyjohn]

Mark, vote with your wallet.

STOP
STOP
STOP

Unhappy? Or - as you put it - ‘rage’

Just walk away.

It’s nice and sunny outside - especially in Seattle.

 

[amitmishra4]

Mark,

I don’t know the facts but I will throw this out there anyways for discussion (may be someone else can confirm it):

I heard that Tesla cannot “legally” and intentionally modify their production/delivery schedules to openly deliver the 200,000th car on the first day of a new quarter to maximize the tax rebate. That would be a manipulation of the system and therefore, they are trying to avoid any such claims by using these indirect discreet methods that make no sense to hundreds and thousands of reservation holders, because that is the very intent. Don’t be fooled into thinking this is poorly planned or mismanaged where, quite contrarily, this has been orchestrated to the delivery of the 200,000th car literally. Let that sink in for a minute and you will start to see it too.

And why would he not take our additional $2,500? He most definitely needs the funds at the rate Tesla is burning cash today to keep the factory churning until Q3, when he will start turning profits. Crowdfunding has been part of the foundation of the Model 3’s existence and it has been quite a successful campaign on that front as you can see. People are lined up waiting to part with their money with no light in sight. Moreover, he has already burned bridges on Wall Street and has claimed publicly that he does not need any external funding any longer, this is part of the equation.

Just my 2 cents. I am a day 1 reservation holder and have been waiting over 4w for a VIN already and am feeling the restlessness as well.

 

[TaoJones]

Not so sure I buy the opinion that Tesla can’t do everything it can to maximize the benefit of the federal tax credit for the benefit of its own tax credit-eligible customers.

Imagine - full bore production for a full half-year followed by the base model which itself will still qualify for the half credit ($3750) in Q1 2019.

I don’t even *want* a Model 3 (although I waited in line and have a reservation), and yet that opportunity ($35K-$3750) might make a case too compelling to pass up.

Except it won’t, because by then, AP1 CPOs will be under $40K and will include supercharging.

But for those who want the latest and greatest next January, a strippie Model 3 in Black for $35K-$3750 + $5000 EAP + $1200 doc fees + whatever sales tax is still a reasonably compelling proposition.

Aside from the $0.26/kW SC cost in CA at least. Don’t forget the 30%+ $ hit for short-range travel.

 

[kengchang]

I heard that Tesla cannot “legally” and intentionally modify their production/delivery schedules to openly deliver the 200,000th car on the first day of a new quarter to maximize the tax rebate. That would be a manipulation of the system and therefore, they are trying to avoid any such claims by using these indirect discreet methods that make no sense to hundreds and thousands of reservation holders, because that is the very intent. Don’t be fooled into thinking this is poorly planned or mismanaged where, quite contrarily, this has been orchestrated to the delivery of the 200,000th car literally. Let that sink in for a minute and you will start to see it too.

How is following the tax laws on delivering 200K on Q3 called manipulation? It clears say ls the phase out starts at 200K and nothing else

 

[ABC2D]

You go, @MarkBrokeIt ! Tell them how they should run their business

 

[octoad]

If their current ordering method helps the company, I say stick to what they're doing. I'm eagerly waiting for my VIN, but I can wait a bit longer if it helps them out.

 

[boaterva]

How is following the tax laws on delivering 200K on Q3 called manipulation? It clears say ls the phase out starts at 200K and nothing else

Indeed. The Supreme Court has even famously said that you are not made to pay more taxes than you legally have to. Arranging things so that the most people can take advantage of the tax credit could be construed as falling under this guideline. (IANAL and don’t even play one on the Internet)

 

[bgbolton]

Crowdfunding has been part of the foundation of the Model 3’s existence and it has been quite a successful campaign on that front as you can see.

There is no crowdfunding. That ended when they took $2500 nonrefundable payments with a delivery expectation and named it an order.

 

[amitmishra4]

How is following the tax laws on delivering 200K on Q3 called manipulation? It clears say ls the phase out starts at 200K and nothing else

Simply following the tax laws is not manipulating it obviously but modifying production/delivery output to maximize the benefit by intentionally delaying delivery when you have the ability was the intent I was trying to portray but I also stated that I was not sure it was a fact. I was told by a little bird and figured someone more knowledgeable would be able to chime in that knows the actual law .

 

[amitmishra4]

There is no crowdfunding. That ended when they took $2500 nonrefundable payments with a delivery expectation and named it an order.

Well, I hope you have received your VIN or better yet your car, but I have been waiting over 4 weeks with no assurance in sight. Call it what you may, I call it crowdfunding until I see the company’s profits paying for operations and the production line moving, not my dollars. Tomahto-Tomayto.

 

[jamnmon66]

Aside from the $0.26/kW SC cost in CA at least. Don’t forget the 30%+ $ hit for short-range travel.

That's rough! I pay $0.16 during peak hours and $0.06 during off-peak (Colorado). Everybody out there should have solar! At my rates, my solar will pay for itself in 8ish years. Then it's free after that. Yours would probably pay for itself in less than half of the time, especially when you throw in the extra demand from an EV.

 

[davedavedave]

How is following the tax laws on delivering 200K on Q3 called manipulation? It clears say ls the phase out starts at 200K and nothing else

200K Vehicles sold in the USA. Sending vehicles up to Canada or other countries is one lever that Tesla can use to maximize the number of USA customers that get the tax break.

Ideally, Tesla would sell their 200,000th EV in the States on the first day of any given quarter, as opposed to the last day of a quarter. In doing this, there's an extra 3 months of sales with the full tax break. Assuming they hit the 5K/week production target, that would be an extra $225,000,000 in tax breaks for Tesla customers - and that's a lot of sales incentive! It's possible that shipping a just a few cars up to Canada can help to "align the stars" with this scenario.

 

[TT97]

200K Vehicles sold in the USA. Sending vehicles up to Canada or other countries is one lever that Tesla can use to maximize the number of USA customers that get the tax break.

Ideally, Tesla would sell their 200,000th EV in the States on the first day of any given quarter, as opposed to the last day of a quarter. In doing this, there's an extra 3 months of sales with the full tax break. Assuming they hit the 5K/week production target, that would be an extra $225,000,000 in tax breaks for Tesla customers - and that's a lot of sales incentive! It's possible that shipping a just a few cars up to Canada can help to "align the stars" with this scenario.

How did you come up with $225M? My calc is $7,500 × 5,000/wk × 12 weeks = $450M. Of course, that assumes all the sales stay in the U.S. but also doesn't take into account sales for X & S.

 

[03DSG]

I’m OK with Tesla’s process. I want my config email ASAP for planning purposes. Order payment makes sense as it’s a custom order (only 2 options for now notwithstanding).
It’s still relatively early in the initial ramp for a new product. Set the rules for the game now.

 

[davedavedave]

How did you come up with $225M? My calc is $7,500 × 5,000/wk × 12 weeks = $450M. Of course, that assumes all the sales stay in the U.S. but also doesn't take into account sales for X & S.

Oh, because of how the credit is phased out, i.e., reduced from $7500 to $3750 in the quarter that follows the 200th car - effectively half. I forgot about your two points too - this is becoming non-linear real fast!

 

[TT97]

Oh, because of how the credit is phased out, i.e., reduced from $7500 to $3750 in the quarter that follows the 200th car - effectively half. I forgot about your two points too - this is becoming non-linear real fast!

I see, however, everything gets pushed back a quarter so by delaying to Q3, Q4'18 will be an extra $3,750, Q2'19 will be $3,750 instead of $1,875 and Q4'19 will be $1,875 instead of $0. So new math is $3,750 × 5,000/wk × 12 weeks (Q4) + $1,875 × 5,000/wk × 12 weeks (Q2'19) + $1,875 × 5,000/wk × 12 weeks (Q4'19) = $450M (again with the other caveats).