And they just started to do so. A whole bunch of 166xxx's with APv2 just showed up and some 167xxx's as well in Hong Kong and Europe. Tesla still seems to prefer to build inventory rather than pulling forward custom orders.
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And they just started to do so. A whole bunch of 166xxx's with APv2 just showed up and some 167xxx's as well in Hong Kong and Europe. Tesla still seems to prefer to build inventory rather than pulling forward custom orders.
Irrespective of whether inventory or custom orders are built first, do you agree that production line is fully engaged with no slack?
My view is that Tesla is still production constrained.
mikes_fsd
Banned
I think it allows for a more streamlined production line. They can batch the cars in decent quantities and get the staff up to speed on any changes in the production process with newly introduced items.
Very likely yes. Only caveat : the newest cars already available are probably still in transit somewhere and still need to pass through Tilburg.
If you mean this in reference to demand, then only if they actually manage to sell inventory that came online in a reasonable amount of time (let's say by the end of the quarter).
Another interesting fun fact : Tesla's estimate in fair value reduction for identical cars except APv1 versus APv2 is between 1.5% and 2%. For example 163966 which is APv1 with a 1900 EUR price reduction versus 165690 which is a nearly identical car that's virtually just as old except for APv2 with no reduction. Will be interesting to see if that gap will grow later in the quarter or if both models will reduce in price at the same rate.
dennis
Model S Plaid
All of these inventory cars will have free supercharging for life if they are purchased by 12/31. Shouldn't be a problem finding buyers for most if not all of them.
Another 130 out to Europe in the expected vin # range.
The supercharger for life is not as enticing as the $7500 discounting of September. Many who charge at home and do not travel far will not find the supercharger pricing as a negative in 2018. However, one thing not known yet is what the "small fee" for above 400kWh/yr charging prices are. To entice people to buy in Q4, that pricing must be known now.
IMO, the available evidence suggests high and growing demand for both S and X that is outstripping production capacity, despite Tesla recently discontinuing or limiting availability of lower priced models and raising prices. Some examples:
Model X:
And given the mix of more expensive vehicles and higher prices, as well as introduction of P100D and Enhanced Autopilot/FSDC, it is highly likely that non-GAAP margins will be substantially higher in Q4 than in Q3.
Model X:
- Inventory in Europe/Hong Kong remains at zero according to ev-cpo
- For all the discussion of European inventory on this thread, this fact is rarely mentioned
- Delivery dates in Europe for new orders are pushed back to March
- Credible reports of very high demand in China for Model X. Tesla Motors: It’s Working?
- Tesla discontinued lowest price model (X60)
- This would make little sense unless there was more demand than Tesla can supply
- This change in the line-up will have a far greater impact on margins than all inventory discounts combined but is rarely discussed
- Prices of some options have been increased
- Credible rumor that effective Nov. 22 Model S60 price will increase $2000
- Economics 101: this would not make sense if demand did not exceed supply
- Almost halfway into the quarter, Tesla is still not making S60s available for inventory purchase with rare exceptions
- Customers report Tesla is not willing to convert inventory S75/S75D to S60s
- The $8500 price difference between S75 and S60 should be greater than the impact of the modest discounts available on demo models
- Deliveries in Europe pushed back to 2017 for new orders
- Ev-sales.blogspot data shows almost 2600 Model S registrations in China in Q3 -- nearly double the rate from Q3 2015 (1345)
And given the mix of more expensive vehicles and higher prices, as well as introduction of P100D and Enhanced Autopilot/FSDC, it is highly likely that non-GAAP margins will be substantially higher in Q4 than in Q3.
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Those all are good points. None of them are a smoking gun in itself, but taken together they form a convincing narrative. The biggest counterpoint really remains : if demand is really off the charts, why is Tesla still building inventory in such large numbers? Is demand contingent on having a vehicle that you can drive off the lot?
With all the demand levers being pulled recently I do believe that TM feels that they can keep the line going full speed because not only can they sell custom cars but they have proven they can sell inventory cars (at a discount, if needed).
This is more of a traditional car sales model that many buyers are use to: Yes, you can get exactly the car you want if you are willing to wait but this one, that meets 90% of your requirements is ready to go today.
Let's start with the Model X, according to ev-cpo there is no inventory at all in Europe and Hong Kong. As far as U.S. inventory, teslainventory.com shows 81 P90Ds, which have been discontinued, and only 88 75D/90D, all of which have AP1, which has been replaced by Enhanced Autopilot. In Q3, insideevs reported about 5800 Model X sales in the U.S., so the amount of inventory relative to sales is a small percentage.
Perhaps we can agree that this is not really a counterpoint for Model X?
The Model S that are available in the U.S. are almost all S75/75D AP1 models. These appear to be ordinary loaners, demos, showroom models that will undoubtedly be sold out to make way for AP2 models. As noted above, IMO Tesla's unwillingness to sell these as S60s is a strong indicator of high demand.
In Europe and Hong Kong, the situation with Model S is a bit more complicated. A few S60s are now available. Most of the cars are AP1 although they have recently added AP2 models as well. Since Tesla has had European customers placing orders whose vehicles are not being delivered until Q1 2017, one explanation is that Tesla wanted to maximize the opportunity for its European customers to have the ability to upgrade to AP2/FSDC and minimize customers receiving AP1 cars too close to the time of announcement. I don't know why Tesla has the new AP2 Model S in inventory instead of delivering them to customers who are waiting for delivery, but it is only about 200 cars so may just be a quirk of timing with AP2 production needing to get rolling before European customers had a chance to custom order their vehicles. The AP2 inventory cars appear to represent only about one day of Model S production, depending on the S/X production split. I wouldn't expect Tesla to have any trouble selling them.
At the end of the day, given the strength of the other evidence outlined in my post above, IMO inventory is not a strong counterpoint on Model S demand.
One anecdote: some guy at Costco was asking me about my tesla since he was interested in buying one.
At the end of the long conversation, he wanted to know if they have inventory at the store because he would only buy one if it was available for him right then and there. I told him they might, and to go check it out.
So yes, I believe they need to keep some inventory available.
Agree. What's available on the X side are likely loaners that they need anyway and for which they can't use CPOs like with the S.
At the same time, we can't assume that there is no additional inventory coming down the line later in the quarter. That's what happened in September as well, right up to the very last week. And since Europe/Hong Kong runs a bit ahead of US it makes sense to assume what is happening there, will also happen in the US somewhat later in the quarter (see below). Last quarter they also switched up their traditional inventory which was 100% P90D (built-to-show-off) to a mix of 75/90/100s (built-to-sell) So I don't think we shouldn't read too much in the changing of the model mix.
Yep, that's the question. Are those few hundred European cars a canary in the coal mine or indeed a quirk in the production process? The 11-7 dump is especially difficult to explain. BTW another remark. Previous inventory dumps often had consecutive ranges of VINs. These latest dumps not anymore. They all fall consistently in a range of a few 1000 VINs but they aren't consecutive anymore. Not sure if it means anything, if at all I would point to these cars being less planned to be produced as inventory. I previously assumed this is from customers who cancelled upon learning about APv2 but now the same thing is happening with cars that already have it so there must be some other reason.
Sch: In my tracking, new dumps are falling "back into" blocks which were dumped previously. A type of interleaving that was seen with Vin #s pre-allocated back in January-March 30th where inventory came about in waves from those numbers. I suspect we will see 800+ new inventory laid out in the next 2-3 weeks in both Europe and USA to prepare for "the Q4 push". Vin # range 1667xx-169xxx is ripe for lots of AP2.0 inventory Model S.
I would say nobody can "say" how many Model X are in Europe as for-sale inventory unless you're working at Tesla to know.
Given the counts so far, it appears that a combined Model S + Model X Produced but not sold number is roughly 8300 right now in-total. That is based on all published numbers quarterly, the Finished goods profile over time and managing to track finished goods against "Built but not Sold". I am also including what could be 1000+ "waste" cars (make it through the line but not delivered to customers) which end up being written down since 2013. We know that there have been "do-overs" and perhaps they go into employee rotation until written down. But there is certainly a lot of inventory if you trust their published Production numbers based on 10-Q paper.
If they don't repeat the deep discounting of September, I doubt that Q4 will break 21k.
I would say nobody can "say" how many Model X are in Europe as for-sale inventory unless you're working at Tesla to know.
Given the counts so far, it appears that a combined Model S + Model X Produced but not sold number is roughly 8300 right now in-total. That is based on all published numbers quarterly, the Finished goods profile over time and managing to track finished goods against "Built but not Sold". I am also including what could be 1000+ "waste" cars (make it through the line but not delivered to customers) which end up being written down since 2013. We know that there have been "do-overs" and perhaps they go into employee rotation until written down. But there is certainly a lot of inventory if you trust their published Production numbers based on 10-Q paper.
If they don't repeat the deep discounting of September, I doubt that Q4 will break 21k.
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You are trying to create a fake demand issue. Why is that custom orders aren't going to delivered until Dec for US? Why is delivery date late March for Europe? your argument has no merit when we have such long wait times.
My statement you quoted re Europe and Hong Kong referred to inventory, not overall demand in those regions. I don't think there any real question at this point that demand for S (as well as X) is more than sufficient to support 25K deliveries in Q4 and more in Q1 2017 for the reasons stated in my earlier post.
Well, you seem to have increased your Q4 forecast from 16.5K to 21K deliveries.
That's a step in the right direction.
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Tesla has found a way to take advantage of the EV-incentives program in Germany that kicks in for cars below 60 000 EUR. From what I understood half of the incentive (3500EUR) is paid by the Tesla, half by the state. Glass half empty reading is that Tesla needs to stimulate demand and therefore gives up 1750EUR. Glass half full reading is that margins increased substantially so Tesla can give up 1750EUR without hurting. Pick your sides.
wesley888
Member
Elon already said that these model S and X are for making enough money to pave the way for the model 3. So, 1750EUR less is really not that much a deal for him.
The 3500€ incentive is for PHEVs. For Tesla it should be 4000€ (paid only in half by the state) since they are pure EVs. Tesla is required to discount the car by 2000€ excl. VAT. Since consumer price tags in Germany always include VAT of 19%, the discount needs to be 2380€ (as perceived by the consumer) to qualify for the incentive. (Of course, Tesla pays 380€ less taxes for each discounted car so from Tesla's POV it's only 2000€ discount.)
Tesla buyers can then use the invoice to receive 2000€ taxpayer money. As soon as Tesla is on this list: http://www.bafa.de/bafa/de/wirtscha...mob_liste_foerderfaehige_elektrofahrzeuge.pdf
I hope this helps with demand in Germany. Should hopefully result in a few more news headlines and some heated discussions about using taxpayer money to help rich people buy expensive cars, which might persuade some rich people to do exactly that.
The limit of 60,000€ for that incentive was seemingly put in place to lock out Tesla. So far, 3343 BEVs, 2438 PHEVs and 1 Hydrogen vehicle buyers have applied for the incentive. 1025 BMW i3. I wonder if we'll see more Model S than i3s in a few quarters? Or maybe only after Tesla Model 3 is on the market.
Tesla buyers can then use the invoice to receive 2000€ taxpayer money. As soon as Tesla is on this list: http://www.bafa.de/bafa/de/wirtscha...mob_liste_foerderfaehige_elektrofahrzeuge.pdf
I hope this helps with demand in Germany. Should hopefully result in a few more news headlines and some heated discussions about using taxpayer money to help rich people buy expensive cars, which might persuade some rich people to do exactly that.
The limit of 60,000€ for that incentive was seemingly put in place to lock out Tesla. So far, 3343 BEVs, 2438 PHEVs and 1 Hydrogen vehicle buyers have applied for the incentive. 1025 BMW i3. I wonder if we'll see more Model S than i3s in a few quarters? Or maybe only after Tesla Model 3 is on the market.
Tesla appears to be selling roughly 20 cars per business day out of European/HK inventory. All of them APv1, because (speculative) APv2 listed inventory is still mostly in transit. Tesla is also replenishing inventory every few days to keep it roughly around 800 cars in Europe/HK. Some of the showroom deals are quite attractive (10-15% discounts are available for zero to a few thousands km on the odometer)
That's starting to happen. Tesla added over 200 cars from this range today to US inventory. I think the switch moving demo cars from APv1 to APv2 is in full swing. Witness also the small but growing inventory on the X side (+100 today)
That's starting to happen. Tesla added over 200 cars from this range today to US inventory. I think the switch moving demo cars from APv1 to APv2 is in full swing. Witness also the small but growing inventory on the X side (+100 today)
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