Biggest Delivery Wave In Tesla History Is Underway, Says Musk

[TMC Staff]

Let’s all just ride this here wave. Tesla CEO Elon Musk emailed all Tesla employees to detail an unprecedented delivery push. The Tesla delivery wave is higher than ever and this is gonna be epic. Of course, it’s driven largely by the Tesla Model 3. The email, which went out today, states: “What has made...
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[Cloxxki]

They may have gone a bit late with the last ships going out, likely with the intent to get all cars delivered within May because everyone thinks that investors can read the second line of a quarterly earnings report.
It may also have left them with a lot to do last-minute in their home market.

Cars in transit may well go from 1,100 (which I still don't comprehend so low) to 10,000 or 15,000 unless this really works out great. That'll hurt sales and cashflow a good bit. Even profits.

 

[M3BlueGeorgia]

They may have gone a bit late with the last ships going out, likely with the intent to get all cars delivered within May because everyone thinks that investors can read the second line of a quarterly earnings report.
It may also have left them with a lot to do last-minute in their home market.

Cars in transit may well go from 1,100 (which I still don't comprehend so low) to 10,000 or 15,000 unless this really works out great. That'll hurt sales and cashflow a good bit. Even profits.

Now they aren't just delivering Model 3 to North America, perhaps it is time to let the in-transit inventory increase to allow for the extra shipping times to Europe and Asia. Having 3 weeks of in-transit inventory would be more healthy (averaging long and short shipping times) so that'd be between 15K and 20K cars.

 

[ThrillHouseMD]

Badges AND wings.

 

[Cloxxki]

Now they aren't just delivering Model 3 to North America, perhaps it is time to let the in-transit inventory increase to allow for the extra shipping times to Europe and Asia. Having 3 weeks of in-transit inventory would be more healthy (averaging long and short shipping times) so that'd be between 15K and 20K cars.

But it's unnecessary!
Just produce export cars in the first half of the quarter, deliver in the second half.
USA/CA cars to be built from halfway into the quarter starting with long distance from Fremont working in closer.
A different way of planning but I bet, if they aren't doing something to this extent already, the in-transit inventory at the end of the quarter can be vastly reduced. Basically to just a few cars here and there that got damaged.

 

[M3BlueGeorgia]

But it's unnecessary!
Just produce export cars in the first half of the quarter, deliver in the second half.
USA/CA cars to be built from halfway into the quarter starting with long distance from Fremont working in closer.
A different way of planning but I bet, if they aren't doing something to this extent already, the in-transit inventory at the end of the quarter can be vastly reduced. Basically to just a few cars here and there that got damaged.

That's what they are doing, but the result is
1) Uneven revenue flow during the quarter... it is all rear loaded
2) Massive delivery bottleneck in the last few weeks of each quarter across the globe
3) Inefficient use of delivery locations
4) Inefficient use of transportation, as (again) peak loads at certain times in each quarter, and low utilization at other times

Additionally, since their revenue is so heavily rear loaded each quarter, even a small disruption could potentially throw off the whole quarters results.

 

[whitex]

That's what they are doing, but the result is
1) Uneven revenue flow during the quarter... it is all rear loaded
2) Massive delivery bottleneck in the last few weeks of each quarter across the globe
3) Inefficient use of delivery locations
4) Inefficient use of transportation, as (again) peak loads at certain times in each quarter, and low utilization at other times

Additionally, since their revenue is so heavily rear loaded each quarter, even a small disruption could potentially throw off the whole quarters results.

With the 7 day no questions asked return policy can they even recognize the revenue from the last 7 days of the quarter? Or is this one example of why the CFO left recently?

 

[M3BlueGeorgia]

With the 7 day no questions asked return policy can they even recognize the revenue from the last 7 days of the quarter? Or is this one example of why the CFO left recently?

The simple answer is "yes they can recognize it", but they might have to provide an accounting provision if they expect the percentage of returns to be significant (which seems unlikely). IMHO: Offering this return policy doesn't affect their Q1 earnings at all.

Think of a retailer with a return policy. Just because a customer could return a product doesn't stop the retailer recognizing revenue from the sale.

 

[whitex]

The simple answer is "yes they can recognize it", but they might have to provide an accounting provision if they expect the percentage of returns to be significant (which seems unlikely). IMHO: Offering this return policy doesn't affect their Q1 earnings at all.

Think of a retailer with a return policy. Just because a customer could return a product doesn't stop the retailer recognizing revenue from the sale.

So I looked it up. "The seller can record the sales revenue at the time of sale if the seller can estimate the rate of product returns." Given Tesla has no data on that, since they never had a 7 day, no questions asked, return policy, they estimate would not be very meaningful. Heck, maybe Elon could take a billion, buy a bunch of model 3's, then return them in Q2, pumping up the Q1 sales. I wonder if he could keep the federal rebates (since returned cars cannot be sold as new anymore)...

 

[dethman]

let's fire lots of people and then make all the employees who weren't fired haul ass and work doubly hard and ignore their real jobs in the company because we have to deliver 80% of our cars in one month of the quarter for some reason.

 

[ArizonaP85]

let's fire lots of people and then make all the employees who weren't fired haul ass and work doubly hard and ignore their real jobs in the company because we have to deliver 80% of our cars in one month of the quarter for some reason.

Continually lurching from one self-created crisis to another is not the hallmark of a well-run company.