FlatSix911
Porsche 918 Hybrid
The P100D is rumored to be announced by year end 2016. It would be a logical extension of the lineup.
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The P100D is rumored to be announced by year end 2016. It would be a logical extension of the lineup.
I think this post is a better answer:
"If they're going to produce an additional 400 cars/week by the end of the year, and additional 200/week by the end of Q3, they have to find an additional 7200 buyers that they didn't have to find if they just maintained 2000 cars/wk."
And what about the sentence right after that?
Current order rate trends and backlog support production at those levels.
True, but it might help you out on resale value, since I think more people would want the 6 seat option than a 4 seat option, especially in the SUV category.
flankspeed8
Member
Remember, they tried that with the S. They had the "Executive Seating" Option which was relatively short lived.
adiggs
Well-Known Member
A good observation. I find that it's a weird way for me to think - I tend to buy cars and drive them roughly forever. Doesn't make it right or wrong - just a weird way for me personally to think
Introduction of S60 and X60 seems brilliant. In addition to significantly opening up new addressable income segments, those who downgrade use up most of the savings on additional options. Moreover, a significant number of them will upgrade to 75 when they can afford, say after an year.
Here is a real life example of someone downshifting from 75D to 60D. He saved $8.5K by downshifting to 60, but spent $5K of that saving on new options. Options like these have huge margins, as much as 70 to 80%.
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I was wondering how you guys feel about using VIN assignment date + VIN as tracked in the Model S tracker spreadsheet to deduce incoming Model S order rates and hence Model S demand? It seems like a very valid method. Since quite some time VIN assignment follows automatically after an order confirms, most often the same day, sometimes maybe one or two days late. Tesla also assigns VINs sequentially so the mapping with orders is one to one, with the exception of cars built for demo, testing and inventory purposes. Cars build for inventory in a certain period cancel more or less out with cars taken up from inventory by demand in that period, so it is reasonably to assume their effect on demand is more or less neutral. Pure demo cars are probably far and few between and testing certainly so : these numbers should be quite low : over the last 4 years, a little over 6000 more VINs were attributed than there were deliveries, or 125/month. Due to increasing number of stores lately, I would put the number a little over that average, let's say 150/month.
So, then, my basic procedure to estimate current demand in a certain period is to simply subtract the last assigned VIN (corresponding with the last confirmed order) with the first assigned VIN (corresponding with the first confirmed order). Finally, subtract 150 cars/month to get instant demand for that period. How valid do you think this method is for estimating demand?
Doing so over the first half of this year gives me an incoming order rate (hence demand) of 25240 or 50480 yearly. Doing the same exercise for the last month yields and incoming demand of 4450 or an half-yearly rate of 53400. Extrapolating over a single month to a full year is inherently more noisy than over 6 months.
Note : demand does not map one to one to deliveries in a given quarter and this number specifically does not try to predict deliveries but strictly customer demand.
Unfortunately, we can't yet do the same thing for the model X because VIN assignments aren't (yet) mapping one to one with orders, but this will probably happen once all options and all regions are served, at which point we should have a full picture on the incoming S and X demand.
So, then, my basic procedure to estimate current demand in a certain period is to simply subtract the last assigned VIN (corresponding with the last confirmed order) with the first assigned VIN (corresponding with the first confirmed order). Finally, subtract 150 cars/month to get instant demand for that period. How valid do you think this method is for estimating demand?
Doing so over the first half of this year gives me an incoming order rate (hence demand) of 25240 or 50480 yearly. Doing the same exercise for the last month yields and incoming demand of 4450 or an half-yearly rate of 53400. Extrapolating over a single month to a full year is inherently more noisy than over 6 months.
Note : demand does not map one to one to deliveries in a given quarter and this number specifically does not try to predict deliveries but strictly customer demand.
Unfortunately, we can't yet do the same thing for the model X because VIN assignments aren't (yet) mapping one to one with orders, but this will probably happen once all options and all regions are served, at which point we should have a full picture on the incoming S and X demand.
I think it's impossible to map Tesla's demand like that. Changes like the new 60kWh battery just make it very unpredictable. Although I have to say current VINs also kinds look like around 1k/week.
Btw. what do we even expect for Model X delivery share? 1500 Model S and maybe 500-700 Model X per week?
Btw. what do we even expect for Model X delivery share? 1500 Model S and maybe 500-700 Model X per week?
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I am not trying to predict demand, I am trying to assess current and previous demand with my method.
I expect parity S/X for this quarter.
@schonelucht, I use a similar method as you do and it tells the average production rate based on weekly averaged out VIN assignments. Problem I noticed last quarter is that even though rate stayed steady at around 1050/week, it doesn't help to predict exact deliveries. For a quarter, I go somewhere from say March 9 to June 9 ( just when dates change to next month) to get the rate for q2.
sillydriver
Member
This is my first post in the investor discussion section. I do not (nor am I planning to have) a position in the stock either long or short, but I do have a position in the car (P85DL) which is a great car. I read the company's press releases but otherwise have not dug into detailed data of the kind I see discussed here. But stepping back I do have a demand concern based on some bigger picture reasoning. I figure this is a good place to air this concern.
Tesla does not advertise, and its sales and marketing is minimal at best. The staff in their stores has not had to do significant selling: they act principally as order takers for customers who are already sold. There is no substantial sales funnel from expiring leases, given the historical growth of the company, and I would say no real sales funnel at all. Tesla sales are developed by word of mouth, and by free publicity in the press.
Now consider how the company's press has been just lately since the AP crash. Pretty bad, and with no offsetting reassurance or positive narrative from advertising. I imagine word-of mouth from owners has also been somewhat muted. For my part I have loved to give both friends and strangers an overly long sales pitch whenever the opportunity arose. But now I'm dreading that people will ask me to explain why the car isn't a robotic death trap (which of course it certainly is not -- I love using AP). Nevertheless, I now feel more like a defender than a proselytizer.
I'm sure this will all blow over because Tesla's cars are just as great as they always have been: even more so because the hardware and software are continuously improved. Nevertheless, it seems to me there is good reason to expect a cratering (not just a dip) in incoming orders, which would translate to sales shortfalls in 3Q and 4Q before a likely return to more normal demand in 1H17.
I recognize that my view is US centric and the dynamics in overseas markets may differ. Also, the MX is early in its lifecycle, although I wonder how good the owner experience and word of mouth selling is for that product. I'm biased because I have never understood the appeal of crossover SUVs! Perhaps the lower price point MX introduction will really stimulate demand. But my point is that because of the way Teslas are sold (or sell themselves) it leaves the company's sales more vulnerable to disruption by bad press than people might expect.
What do you all think of this reasoning?
Tesla does not advertise, and its sales and marketing is minimal at best. The staff in their stores has not had to do significant selling: they act principally as order takers for customers who are already sold. There is no substantial sales funnel from expiring leases, given the historical growth of the company, and I would say no real sales funnel at all. Tesla sales are developed by word of mouth, and by free publicity in the press.
Now consider how the company's press has been just lately since the AP crash. Pretty bad, and with no offsetting reassurance or positive narrative from advertising. I imagine word-of mouth from owners has also been somewhat muted. For my part I have loved to give both friends and strangers an overly long sales pitch whenever the opportunity arose. But now I'm dreading that people will ask me to explain why the car isn't a robotic death trap (which of course it certainly is not -- I love using AP). Nevertheless, I now feel more like a defender than a proselytizer.
I'm sure this will all blow over because Tesla's cars are just as great as they always have been: even more so because the hardware and software are continuously improved. Nevertheless, it seems to me there is good reason to expect a cratering (not just a dip) in incoming orders, which would translate to sales shortfalls in 3Q and 4Q before a likely return to more normal demand in 1H17.
I recognize that my view is US centric and the dynamics in overseas markets may differ. Also, the MX is early in its lifecycle, although I wonder how good the owner experience and word of mouth selling is for that product. I'm biased because I have never understood the appeal of crossover SUVs! Perhaps the lower price point MX introduction will really stimulate demand. But my point is that because of the way Teslas are sold (or sell themselves) it leaves the company's sales more vulnerable to disruption by bad press than people might expect.
What do you all think of this reasoning?
N5329K
Active Member
I think your reasoning is sound, and would add one additional caution: sales have been bolstered by true believers and techies out to own the latest and greatest. Sales have grown as capacity to manufacture has grown, with the overall system more or less in balance (minus a few well-documented hiccups).
It seems to me that the Model 3 is another story. While we saw a great inrush of true believers and techies in the initial flood of orders, that customer pool will go dry if the delivery and owning experience is not up to snuff, and everyone else (those who are looking for a good, reasonable car and not for a way to give Big Oil the finger and save the world), will simply turn away.
The Model 3 is the tiger Tesla has by the tail. Ride it, hang on, or perish.
Ronin
It seems to me that the Model 3 is another story. While we saw a great inrush of true believers and techies in the initial flood of orders, that customer pool will go dry if the delivery and owning experience is not up to snuff, and everyone else (those who are looking for a good, reasonable car and not for a way to give Big Oil the finger and save the world), will simply turn away.
The Model 3 is the tiger Tesla has by the tail. Ride it, hang on, or perish.
Ronin
AZ Desert Driver
Rare combination
Not my area of expertise, but...Advertising to increase sales suggests you have an inventory that is not moving. If you are selling everything you build, and have a backlog of multiple months of production - advertising to sell more of what you don't have would seem to be counterproductive. If Tesla had a batch of orders canceled because of bad press, then advertising perhaps should be to those specific cold-foot customers, not to the whole world.
I personally don't think they are in trouble - there is a good reason for the crashes, and it is not AP. Once the flush of the haters news cycle is past, the sales model they have should continue to work.
In-other-words ...calm, steady as she goes, don't panic,
I personally don't think they are in trouble - there is a good reason for the crashes, and it is not AP. Once the flush of the haters news cycle is past, the sales model they have should continue to work.
In-other-words ...calm, steady as she goes, don't panic,
This would fall under the "fear" part of FUD. I understand your concern, but this is when you should refer to signals on demand (order rate, expected delivery dates, referral programs, lower priced models, etc) as others have done. It's healthy to have doubt, but as an investor, you need to verify.
dandurston
Member
Your reasoning is reasonable, but I think you've overstated the effect. The impact is likely small and will be offset soon but other, better news which tends to come almost monthly.
sillydriver
Member
My fear is not that any orders already placed would be cancelled. My fear is a hiatus in the new orders that Tesla relies on to walk through the door. Nor am I arguing that Tesla should advertise. I'm arguing that because Tesla doesn't advertise (because it hasn't needed to) it has little control of or influence over the way the product is perceived by the public, at least short term. With that said, I hope you are right.
sillydriver
Member
I agree that data is key. But the crash didn't come to light until their blog post on 6/30: the last day of the quarter. Do we have any demand data for the current quarter? That's where the effect would be, if there is one.
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