600.000 model 3 orders now ?

[SageBrush]

It's funny though. If the number were a lot higher, maybe 700,000, he would be touting it as a reason to possibly raise more capital.

I considered this but as reservations go further out the wait time lengthens and the likelihood of cancellations increases.

Tesla has to balance the good news of reservations with the relatively higher weighted future negative press.

 

[esk8mw]

Based on some corporate filings...

tsla-10q_20160930.htm
Page 4
Customer deposits, under liabilities:
690,364 (thousands)

They had $690 million in customer deposits as of September 30th, 2016. The most comparable figure, pre-Model 3 announcements, is $283 million as of December 31st, 2015. (The March filing could not be used, because I'm not sure if it already includes some Model 3 reservations or if those hit the following statement.)

So there has been a gain of about $400 million during this time in deposits, which isn't far off from the original reservation count of 373,000. In addition, given the increase in sales (from $1.2 Billion per quarter in Q4 2015 to $2.3 Billion Q3 2016), there is likely some increase just due to increased deposits from customers buying the Model S or the Model X. The challenging part is that inventory sales are becoming a larger percentage of their transactions versus custom orders and as far as I know, we don't know that percentage.

Keeping it simple, if we assume that the original figure of $283 million had grown at the same pace as sales, deposits for the S/X were anywhere from $283 million to $548 million by the end of Q3 2016. (I assume no change in the percentage of customers that place deposits down for simplicity)

This means that Model 3 reservations are anywhere between 142,000 and 407,000. I think it's on the higher end, but not by too much more than the initial announcement. I wouldn't be surprised if we get more reservations after the final reveal (with option pricing, etc.) and that some were lost as they bought a Model S instead. Based on my assessment, these reservations are largely held by people excited by the technology. Most others who are less interested will wait for cars to be available at a dealership with a smaller wait time. At the same time, there could be some people who defer their reservations and so it's not shooting up as fast as I had personally expected.

I don't think you are approaching the math correctly. The 12/31/15 number of $283 million contains substantially all of the X reservation money, including probably close to 2800 Sigs (maybe 3,000 total, less 206 delivered in 2015) that were reserved at 40,000 a pop. Sigs alone are $112 million off the $283 million number.

Then consider all the X reservations from past years. There were big reports of reservations but let's be super conservative and say just 12,000 existed at 2015 year end (15,000 total minus 3000 Sigs) at $5k a pop. That's another 60 million out of the $283 million number. I'd say most of the backlog (say 80%?) was completed by 9/30/16. All those older X deliveries didn't increase the $283 figure - they were already factored in. 48 million + 112 million = $160 million to be subtracted from the $283 figure due to old X reservations clearing out. Of course, these get replaced with some level of new X orders but it's pretty hard to quantify.

Same with S movements. I don't think you can just look at sales and assume deposits went up on account of S. S production in 15Q4 was 13,530, then 12,851 in 16Q1, 12,145 in 16Q2 and 14,735 in 16Q3. So, it's not as if there was massive production/deposit increases here, especially since they sought to deliver every car possible at end of Q3. Orders are rising, but they are also being fulfilled at a faster rate, which moves the deposit off the books.

One thing we know is that typical cars in transit at end of quarter has increased from 15Q4, from about 3k to 5k. So, 2k additional deposits * 2500 = 5 million, basically nothing.

690 million - 283 million = 407 million. Conservatively add back 160 million from old X res clearing the books (remember, even order cancellations after 12/31/15 would reduce the deposits figure) = 567 million. Lets say 10,000 people (seems high) have new X $2500 deposits in but no car as of 9/30/16: subtract 25 million = 542 million. There's no good data to suggest there's more people waiting on S with deposits in, but let's assume another 10,000 increase just for fun. Subtract another 25 million = 517 million from Model 3.

TL;DR: 517,000 Model 3 deposits as of 9/30/16 seems like a conservative estimate.

 

[JeffK]

TL;DR: 517,000 Model 3 deposits as of 9/30/16 seems like a conservative estimate.

With the exception that we know for a fact the reservations had decreased at one point. The official number of 373,000 was given again recently .... if it was much high they'd announce it. It was was lower and expected to rise then they'd keep it under wraps.

 

[Ovulation]

With the exception that we know for a fact the reservations had decreased at one point. The official number of 373,000 was given again recently ....

Did they ??? I don't think so

 

[JeffK]

Did they ??? I don't think so

It's on seeking alpha and in announcements made by both Elon and JB. At one point they were nearly at 400,000 and then the number magically became 373,000 and stayed there officially for months. You can listen to the financial calls too.

 

[SageBrush]

Tesla has to manage expectations.

If they say "we have more reservations than we can fill in a year," investors are quite rightly going to discount the reservations that cannot be filled in a kinda/sorta timely manner, so no substantial upside other than bragging rights.

OTOH, if only 1/3rd of those late fill reservation cancel it is still going to be negative news that the short positions will scream about any chance they get.

Information is asymmetric. So I don't know if Tesla has more than ~ 400k reservations but I can certainly understand them keeping it low key if they do. Good news gets dripped out by companies when the timing is best.

 

[Ovulation]

It's on seeking alpha and in announcements made by both Elon and JB. At one point they were nearly at 400,000 and then the number magically became 373,000 and stayed there officially for months. You can listen to the financial calls too.

I listen to the conference calls .... and if I remember correctly they don't really comment on that subject.

btw. The whole under 400.000 thing was IMO only a stunt by the shorts (SA^^) Elon put out some vague numbers and the shorts, of course, run with it

 

[esk8mw]

It's on seeking alpha and in announcements made by both Elon and JB. At one point they were nearly at 400,000 and then the number magically became 373,000 and stayed there officially for months. You can listen to the financial calls too.

Seeking Alpha is a horrific source for TSLA news, just so you know. The 373k is the official number since right after the unveiling. They have declined to update it. The 400k was never an official number.

If you listened to the Q3 ER call, you know that your reasoning above re: "if it was higher they'd tell us" is probably not right. They are anti-selling the Model 3 - they try to get people into an S/X when they get questions about the 3. Elon said there's no point in pushing orders of the 3 right now since 12 months of production are already sold out. They are downplaying the Model 3 at this point to every extent possible to sell available cars now. Publishing higher reservations (i) discourages future 3 reservations as the waiting list looks impossibly long and (ii) gives competitors valuable inside information. There's plenty of reasons to keep bigger numbers under wraps.

 

[JeffK]

Seeking Alpha is a horrific source for TSLA news, just so you know. The 373k is the official number since right after the unveiling. They have declined to update it. The 400k was never an official number.

If you listened to the Q3 ER call, you know that your reasoning above re: "if it was higher they'd tell us" is probably not right. They are anti-selling the Model 3 - they try to get people into an S/X when they get questions about the 3. Elon said there's no point in pushing orders of the 3 right now since 12 months of production are already sold out. They are downplaying the Model 3 at this point to every extent possible to sell available cars now. Publishing higher reservations (i) discourages future 3 reservations as the waiting list looks impossibly long and (ii) gives competitors valuable inside information. There's plenty of reasons to keep bigger numbers under wraps.

Tesla's J.B. Straubel Says Jeju Island's Carbon-Free Future Sets Example, Confirms 400,000 Model 3 Pre-Orders

 

[esk8mw]

Tesla's J.B. Straubel Says Jeju Island's Carbon-Free Future Sets Example, Confirms 400,000 Model 3 Pre-Orders

That's not proof of anything - in fact, it's a datapoint suggesting preorders are up, not down.

JB gave a subsequent unofficial update of 400k. No reason to think it's false, so there's some data suggesting reservations didn't stop at 373k. After that, when asked, Elon said they are going to stick with the last officially disclosed number (373k) and refuse to comment on it further, as a matter of policy.

All we know is that overall deposits have gone up every quarter in 2016, net of losing all those old Model X deposits as I previously mentioned. All data points we have point toward higher deposits, not lower. As I said, there's no benefit to showing a higher number.

 

[harry]

Don't forget -- those of us with more than 2 Model 3 reservations were cut back to that number. That's when the ~400K number went to 373K.

 

[esk8mw]

Don't forget -- those of us with more than 2 Model 3 reservations were cut back to that number. That's when the ~400K number went to 373K.

Once again, the subsequent 373k number given after JB informally mentioned 400k in a speech did not reflect actual reservation numbers at that time. Elon specifically said they were going to stick with the original official 373k number and no longer update it as a matter of policy. For all we know the real number was 450k when he said that.

Even without Elon's specific description of the 373k number and its reasoning-which is 100% dispositive here, there's no room to reasonably argue otherwise-do you really think the cutting of excess reservations coincidentally reduced the actual number of reservations back to exactly 373k, the official tally?

 

[eisbock]

What would Tesla do with more capital if it had it?

Accelerate the Model 3 launch?

There's a point where you need a certain amount of time to accomplish a task, but money can most certainly be used to make things move faster, regardless of whether it makes sense from a financial standpoint for what you'd gain.

 

[JeffK]

373,000 is the official number. Speculating up or down is just speculation...

 

[Topher]

Accelerate the Model 3 launch?

Exactly how? They can't make a new factory in that time. They can't hurry on their suppliers. They can't train new employees faster with money.

"Adding more people to a late software project makes it later." -_the mythical man-month_

Thank you kindly.

 

[Trips]

Based on some corporate filings...

tsla-10q_20160930.htm
Page 4
Customer deposits, under liabilities:
690,364 (thousands)

They had $690 million in customer deposits as of September 30th, 2016. The most comparable figure, pre-Model 3 announcements, is $283 million as of December 31st, 2015. (The March filing could not be used, because I'm not sure if it already includes some Model 3 reservations or if those hit the following statement.)

So there has been a gain of about $400 million during this time in deposits, which isn't far off from the original reservation count of 373,000. In addition, given the increase in sales (from $1.2 Billion per quarter in Q4 2015 to $2.3 Billion Q3 2016), there is likely some increase just due to increased deposits from customers buying the Model S or the Model X. The challenging part is that inventory sales are becoming a larger percentage of their transactions versus custom orders and as far as I know, we don't know that percentage.

Keeping it simple, if we assume that the original figure of $283 million had grown at the same pace as sales, deposits for the S/X were anywhere from $283 million to $548 million by the end of Q3 2016. (I assume no change in the percentage of customers that place deposits down for simplicity)

This means that Model 3 reservations are anywhere between 142,000 and 407,000....

This is bad math as some of the deposits were $40,000 for the X that have be cleared up.

There is no upside to releasing the number and that is why they have paid $$$ to individuals that figured it out and did not release it to the public.

Electrek did a nice article a couple weeks ago looking at the balance sheets. https://electrek.co/2016/10/27/tesla-model-3-700-million-customer-deposits/

 

[182RG]

but money can most certainly be used to make things move faster

Fallacy.

 

[Garlan Garner]

That questioned was asked of Musk and answered.

Paraphrased: The number is of no importance beyond showing that there is significant demand for an affordable EV. The Model 3 is sold out for its first year of production. We are in fact anti-selling the Model 3.

Anti-selling? What does that mean?

 

[BluestarE3]

Anti-selling? What does that mean?

Discouraging new Model 3 reservations by warning that the first year's production is already sold out and by steering people interested in getting a Tesla to a low-end Model S/X instead.

 

[Krugerrand]

It's funny though. If the number were a lot higher, maybe 700,000, he would be touting it as a reason to possibly raise more capital.

It's funny though. There's no evidence of any kind that that's what he would do.