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FlatSix911
Porsche 918 Hybrid
The record number of deliveries has been clearly helped by an increase in Model X production. Tesla delivered approximately 11,550 units – that’s about 2,000 more than the previous quarter, which was also the previous record.
But the Model S, Tesla’s flagship sedan, is still the company’s bestseller and with about 13,450 deliveries in Q1 2017, it still doesn’t seem ready to decline. It has seen some ups and downs in term of deliveries over the past quarters and it has yet to beat its ~17,000 deliveries during Q4 2015, but it instead seems to be stabilizing at around ~15,000.
Here is one bear interpretation: Model X sits in a massively larger segment than Model S. It should be selling better, but I wager because of the falcon wings, it is not.
Model S is great for its age and type of vehicle. It really is a brilliant car for many markets. Doing really well, though obviously hitting the roof unless new markets open, but that is normal for a car its age. It is doing better than many.
Model X is a loveable freak, but clearly not a massive seller. As an SUV it should be selling twice or even three times Model S by now.
Model S is great for its age and type of vehicle. It really is a brilliant car for many markets. Doing really well, though obviously hitting the roof unless new markets open, but that is normal for a car its age. It is doing better than many.
Model X is a loveable freak, but clearly not a massive seller. As an SUV it should be selling twice or even three times Model S by now.
I'm not sure the S and X are in segments. Or rather they each sit in their own segment. One piece of evidence that segment comparison are invalid for current Teslas is the remarkable variety of cars people trade in on a Tesla.
Why is the model X an SUV? It's a three row vehicle. SUVs cost more than mini-vans so it is called an SUV.
What car is most similar to the model S? I think the model S is currently incomparable. An incomparable vehicle is by definition not in a segment. Musk was working hard last week to assert that the model S and the model 3 are NOT!!! in the same segment. Although, when released, the closest car to the S with be the 3.
mmd
Active Member
That is quite an over statememt. That chart shows (and I calculated below) Model S averaged 12823 over the last 5 quarters.
If you include Q4 2015, the average over last 6 quarters is 13551. Of course, going further back only reduces the average.
Here are the Model S quarterly deliveries beginning Q4 of 2015:
17192, 12420, 9745, 15800, 12700, 13450.
dennis
Model S Plaid
The problem with using those numbers to ascertain demand for Model S is that they are inextricably tied to a number of other factors that influence both demand and production:
- Anticipation of new features which dampens demand
- Arrival of new features or financing options which increases demand
- Arrival of new features which decreases production in the quarter they are introduced (every single time!)
- Allocation of production between Model S and Model X since they share the same final assembly line
- Tesla goals for gross margin since they have been different between Model S and Model X
One thing I do know for sure is that when Tesla has introduced new features for the Model S or allocated production to Model X which wasn't achieved it has depressed deliveries. In the few quarters where things were stable (4Q15, 3Q16 and 1Q17) the results have been excellent with no excuses needed.
Tesla is trying to manage a complex equation of production and demand variables, with an eye on gross margin. They have repeatedly shown that they can increase demand by pulling option, financing or expiration levers. They have been less successful on the production side because they are constantly changing things. Unlike other automakers, they have only one production line and only two products. So there is no ability to hide issues in the production of one of the models. This actually bodes well for the Model 3 since none of the factors I listed above will be in play until they start producing D, P and RHD variants. And they won't need to add features to generate demand since there should be oodles of demand for several years.
One other way to see how this plays is the decision to drop the S60 after Q2 even though it represents 30% of the Model S orders. Why would they do this? My belief is that they are trying to optimize the S and X for gross margin contribution beginning in Q3. They know the margins will be hit hard in that quarter because of the Model 3 initial ramp, and they want to allocate the S/X production to the highest margin products to mitigate that as much as possible. It will be interesting to see how that impacts demand.
Model X size and price-wise sits in the Audi Q7, BMW X5 category and around the Porsche Cayenne as well. It is logical they are the competiton, considering BMW 5/6 Series (similarly Audi A6/A7) are the stated competition of the Model S per recent Elon tweet. Top-end Model S compares to Audi A8/7 Series in price.
To use the Porsche example, Porsche Cayenne sells massive amounts due to being an SUV. Porsche Panamera, their "Model S", sells much less because the market for premium sedans/hatches is much smaller than that of premium SUVs. In the U.S. and globally as well.
I believe Porsche Cayenne sells something to the tune of five times as much as Porsche Panamera due to the difference in the market sizes of premium SUVs and sedans.
The reality is, if Model X is out of a class, it is because its falcon wings are limiting its appeal to a niche.
RobStark
Well-Known Member
You could not possible be more wrong.
Porsche Cayenne starts at $60k
Porsche Panamera starts at $85k.
The opposite is true at Tesla.
Until very recently Model S started at $68k but now starts at $74.5k.
Model X starts at $88k.
If Tesla sold a RWD X75 with a base price of $74.5k it would outsell Model S at least 2 to 1.
I am not wrong, you are just reading too much into what I say.
Do your research. Premium SUV market is massively larger than premium sedan.
Model X should be selling way more than Model S by now. It is being hindered by something. Falcon wings are the logical suspect...
RobStark
Well-Known Member
One. Most soccer mom chose SUV/CUV because of high seating position, interior room,and because it is not a minivan. Soccer mom's don't give a rats ass about AWD,4WD,FWD, or RWD.
About 1% of SUV/CUV owners go offroad.
Tesla RWD is perfectly capable in inclement weather. Cayenne is standard AWD but Mercedes GLE, BMW X5 and plenty of CUV/SUV come standard as RWD or even FWD.
RobStark
Well-Known Member
You could not possible be more wrong.
X sales relative to S sales is hindered by price. Take Econ 101 and see how demand is affected by price.
The biggest market for ultra premium CUV is China. Chinese millionaires hardly buy sport cars. In China, the falcon wing doors is probably the biggest selling point for buying an X. You could be a lowly millionaire and give the impression you are a billionaire.
Hopefully we can agree to disagree.
My view is that X sales relative to S sales would not be hindered this much by price, given the vastly larger target market for a premium SUV. Pricing is factored in my estimate. Note that I did not expect Model X to sell five times as many as Model S, only that it should sell significantly more.
Audi Q7 is more expensive than Audi A6, yet it sells more in many markets. And Model S is much more expensive than Audi A6... Hence my view is that the falcon wings and/or related lack of certain interior configurations is limiting the Model X's appeal.
RobStark
Well-Known Member
Audi Q7 is comparable to Audi A7 or A8 not A6. And Q7 is $2.4k more expensive than A6 not $20k or $13.5k.
Audi Q7 starts at $49k. Audi A7 starts $68k
Of course Q7 outsells the A7.
The A7 is the Audi vehicle most comparable to Model S. A large 4 dour coupe. About same price as Model S until Tesla confidently eliminated the S 60.
Price is limiting Model X mass sales. Yes, there are some WASPy types that are repelled by "flashy" falcon wing doors. Many more Chinese that are enamored with falcon wing doors. And yes there are some that really wanted an Expedition/Tahoe type utility vehicle and chose against Model X because it does not have folding center seats. That again appears to be a minimal amount of potential buyers. You don't buy a vehicle as expensive as Model X to treat as a rented mule.
@RobStark We are approaching the level of nuance where we are both speculating and this really can't be settled - as we, in reality, can't know.
I still believe the SUV market, even with the pricepoints, is so much larger than the premium sedan market that Model X should be outselling the Model S. I also believe that without falcon wings it would. Ironically, it would also be cheaper and would have come out earlier. So even if you are right about the price, I might be right about the sales.
I am happy to note your reasonable and different point of view without further argument. We both have reasonable positions and are of course speculating.
p.s. the Audi A6 vs. Q7 price difference in Germany is almost 20k. But I agree Audi A6 is not in any way a perfect comparison. Audi A7 is closer. On the Performance sector, Panamera may be too. It is also often argued on TMC that Model S eats into Audi A8/S Class sales.
I still believe the SUV market, even with the pricepoints, is so much larger than the premium sedan market that Model X should be outselling the Model S. I also believe that without falcon wings it would. Ironically, it would also be cheaper and would have come out earlier. So even if you are right about the price, I might be right about the sales.
I am happy to note your reasonable and different point of view without further argument. We both have reasonable positions and are of course speculating.
p.s. the Audi A6 vs. Q7 price difference in Germany is almost 20k. But I agree Audi A6 is not in any way a perfect comparison. Audi A7 is closer. On the Performance sector, Panamera may be too. It is also often argued on TMC that Model S eats into Audi A8/S Class sales.
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RobStark
Well-Known Member
@AnxietyRanger
Since we can't run controlled experiments just about everything here is speculation.
Price relationship with Demand is not. Unless you want to make the argument Model X demand is price inelastic. LOL.
Without FWD Model X would be cheaper, how much cheaper is a guess, but it would also mean an intrinsically less valuable car. And less demand in China. And Tesla would probably still need to develop FWD tech for its public transport autonomous Micro Bus program.
The US is a much bigger SUV/CUV market than Germany.
If Model X comes out on time Tesla does not make any more sales. Because Tesla was constrained by battery supply when Model X was due originally. Here it becomes irrelevant about the proportion of Model S to Model X sales to the company. It just becomes a theoretical argument about how many angels can dance on the head of a pin.
Since we can't run controlled experiments just about everything here is speculation.
Price relationship with Demand is not. Unless you want to make the argument Model X demand is price inelastic. LOL.
Without FWD Model X would be cheaper, how much cheaper is a guess, but it would also mean an intrinsically less valuable car. And less demand in China. And Tesla would probably still need to develop FWD tech for its public transport autonomous Micro Bus program.
The US is a much bigger SUV/CUV market than Germany.
If Model X comes out on time Tesla does not make any more sales. Because Tesla was constrained by battery supply when Model X was due originally. Here it becomes irrelevant about the proportion of Model S to Model X sales to the company. It just becomes a theoretical argument about how many angels can dance on the head of a pin.
@RobStark Indeed, I agree that since we can't run controlled experiments just about everything here is speculation. There often comes a time when an argument is best left at that, with the different opinions noted.
As you brought something new to the table: Model X being an intrinsically less valuable car without falcon wings, a comment on that though. I really do not see it. This has been tested and discussed a lot and the only real benefit of the falcon wings - as implemented - has turned out baby/small child seat usage and some weirdmobile halo effect for Tesla. Third row access is not much better due to the smaller opening compared to the prototype.
On the other hand, Model X with falcon wings costs more, came our 1.5+ years later than it could have, can not use roofracks, does not have a folding 7-seater due to the limitations the doors have so far imposed on the design process, has been plagued with tons of door problems from seals to sensors to crashes, is still hard to operate in many garages etc etc.
I talk to people about cars a lot and the resistance to actually owning/using a car with falcon wings is surprisingly high. As is, Model X is not the effective BEV adoption obstacle remover that Model S is. It introduces obstacles of its own, without much visible benefit for, well, anyone really.
They're cool. I have no problem with the product as a cool niche. But I guess Tesla wants it to be more than that sales-wise... We shall see if China loves it, but in rest of the world, I see the falcon wings as an obstacle, not an obstacle remover.
As you brought something new to the table: Model X being an intrinsically less valuable car without falcon wings, a comment on that though. I really do not see it. This has been tested and discussed a lot and the only real benefit of the falcon wings - as implemented - has turned out baby/small child seat usage and some weirdmobile halo effect for Tesla. Third row access is not much better due to the smaller opening compared to the prototype.
On the other hand, Model X with falcon wings costs more, came our 1.5+ years later than it could have, can not use roofracks, does not have a folding 7-seater due to the limitations the doors have so far imposed on the design process, has been plagued with tons of door problems from seals to sensors to crashes, is still hard to operate in many garages etc etc.
I talk to people about cars a lot and the resistance to actually owning/using a car with falcon wings is surprisingly high. As is, Model X is not the effective BEV adoption obstacle remover that Model S is. It introduces obstacles of its own, without much visible benefit for, well, anyone really.
They're cool. I have no problem with the product as a cool niche. But I guess Tesla wants it to be more than that sales-wise... We shall see if China loves it, but in rest of the world, I see the falcon wings as an obstacle, not an obstacle remover.
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