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Of course Tesla can build more showrooms and get more sales. But the cost of customer acquisition rises as the density of of high net worth households decreases. The economics of showrooms in second tier markets improves greatly with the model 3.

Mercedes and BMW sell mostly less expensive cars. There would be far fewer Merc. and BMW dealerships if the didn't make made most of their unit sales over $55K.

Just a thought, but BMW and MB choke the media with ads. If it weren't for ads, they'd be in bad shape. Tesla ads, though, are you and me. I help clinch sales on a half dozen cars a year, as I'm sure you all do, too (or you should!). And that sales force goes up all the time. Tesla has said that every owner sells one. That makes growth grow. I have several friends and acquaintances who are not "high net worth", and they are planning on buying Tesla. They would never even think of MB or BMW. Just another gas car.
 
This prediction is based on the 11 points I wrote about in the short term thread and also the fact that growth for a product often continues rather than stall, so the default is to assume it continues unless you got evidence it won't (which you don't have). X will follow S because of the SUV market being bigger.

The trend is that the demand growth is slowing. The reason is that the market is getting more and more saturated. It isn't a fact that growth for a product just "continues", what do you mean, forever? Tesla already has a large share of the luxury market, it makes sense for the growth to slow down.

Btw, there is a big, big difference between 9% and 1% for a long term growth investment.

Obviously. But you are a fool if you think you can predict growth within a few percents accuracy with a very high confidence.
 
Of course I do. This demonstrates nothing.

Let me repeat my point one more time: the Company over the past year increased their deliveries over the past year 50%, while managing to keep rate of incoming orders just ABOVE the rate of production, consistent with what they kept saying to people like you that insisted that demand is not there.

The company again is saying that the rate of incoming orders is up 45%, enough to meet the guidance.

Your response: the rate of incoming orders had barely kept up with the increasing production. The thing is that you refuse to acknowledge is that the rate incoming orders was increasing FASTER than production and deliveries. What is your reason for saying it is NOT continue to happen, when demand is up, and when the company explicitly said that it IS happening? Your desire to get back in at SP=$120? Forget it, it is not going to happen, your heroic efforts notwithstanding.

Can't even read your entire post sorry, you are simply not making sense and repeating yourself. You will understand soon enough.
 
The trend is that the demand growth is slowing. The reason is that the market is getting more and more saturated. It isn't a fact that growth for a product just "continues", what do you mean, forever? Tesla already has a large share of the luxury market, it makes sense for the growth to slow down. Obviously. But you are a fool if you think you can predict growth within a few percents accuracy with a very high confidence.

Growth is slowing down for S yes, but I take your estimate under 10% means 5% expected value with a large degree of uncertainty? This is just plain unlikely. If you mean 10% you would have expressed yourself differently. I have mentioned the scenarios I think it can happen in, though so it is a possibility but the data that support that slow growth outcome would be in Tesla's allocation of resources and not anything you have presented.

Just because there is uncertainty does not mean low balling is a good strategy. Many fall into this and therefore fail with growth companies. The very positive outcome scenarios are a big part of the value.

S and X being at 120K flat demand in 2020 vs 200K still growing slowly is a huge difference in market cap by that time. Many tens of billions.
 
You are correct, that is the first post you have made that have actually made sense, congratulations. The problem is that we are still only talking about a few percent, we are not arguing about details, but rather if the principles I'm using to calculate demand makes sense or not. If we are getting into details we should also be dealing with the waiting times seperately for each market as they are different in size (1 week wait is a different number of cars in the backlog).

If we do that we will find that the biggest market, the US, has actually seen shortening wait times while the China wait is pulling the average up, and China is the smallest market. So accounting for all the details and using the latest data points the total backlog probably hasn't move up at all.

That made no sense at all. If you agreed with my example, then your conclusion is bunk, and the exact opposite is shown. It showed that even 0 change in wait time is demand growth (because the production increase masked the effect of demand growth). It's pretty clear that you've drawn your conclusion with understanding the data.
 
I would guess around 55k Model S this year and <10% growth for the S over the coming years, but still positive. For the X I expect 15-20k tops for this year and perhaps 10% growth over the next few years, it is much harder to say than for the S as we have less data.
55k Model S probably isn't far off. 55k Model S plus 30k Model X means they'll meet guidance with some margin. You keep talking about the Model S, while it's the Model X deliveries that make or break your idea that Tesla will fail to meet guidance.

And you've been told several times that the way you estimate demand doesn't work for the Model X. Delivery times *should* be dropping fast in the US, because deliveries in the EU and Asia haven't started up. Something like half the Model S production goes to the US, which at 1200 Model S per week works out to 600 Model S per week. While Tesla is producing ~800 Model X per week, and only delivering them in the US, demand would have to be 33% higher for the Model X than the Model S in the US for waiting times to remains stable or grow.

In all probability, Model X demand is lower than Model S demand. How much lower is hard to say. But once deliveries start in Europe and Asia, the US will only have to absorb ~400 Model X per week, or 33% less than the Model S. Is demand 33% less than the Model S? It's plausible.
 
My personal assessment is that we are still in the very early phase of these big changes and that a lot will change rapidly in the coming just 5-10 years. There will be large changes in public policy that can drastically alter the basic conditions in which demand for Tesla products exist (and I expect it will be a huge demand driver). Along with this, and as important, are changes in public perception and awareness of these issues, again something that will be an enormous demand driver. The third and equally important of these large scale changes is the change in macro economics and in particular the inevitable absolutely enormous divestment out of fossil fuels that will occur and the fact that all this capital is going to be looking for growth, and will find it in precisely the business Tesla is in. That kind of access to capital will be a driver of demand indirectly.
While that's true I disagree with the general sentiment, that more EVs = good for Tesla. At the moment if you want a EV with long range a Model S is your ONLY option. In 5 years there will be many competitors out there and if Tesla performance cars will now have competition from sportscars like Porsche and the build and interior quality now really has to compete with the German luxury cars. Things like the lack of ventilated massage seats which the S-Class, 7-Series etc. offer would suddenly be weighted a lot heavier in the purchasing decision, because the big EV vs. ICE factor is eliminated. Of course this can be a chance if Tesla steps it up, but I'm not sure they will be able to do that on all aspects in such a timeframe.
 
While that's true I disagree with the general sentiment, that more EVs = good for Tesla. At the moment if you want a EV with long range a Model S is your ONLY option. In 5 years there will be many competitors out there and if Tesla performance cars will now have competition from sportscars like Porsche and the build and interior quality now really has to compete with the German luxury cars. Things like the lack of ventilated massage seats which the S-Class, 7-Series etc. offer would suddenly be weighted a lot heavier in the purchasing decision, because the big EV vs. ICE factor is eliminated. Of course this can be a chance if Tesla steps it up, but I'm not sure they will be able to do that on all aspects in such a timeframe.

When this becomes the case, in the future, the pie to divide between the manufacturers will be so big (essentially the entire auto market) that I fail to see how this will be a problem for Tesla.

Your argument is flawed in the typical way: you are comparing a car that Tesla has had on the market since 2012 to a potential car that may exist in 5 years time, saying that Tesla my have problems competing. This is very much an apples to oranges comparison, even worse it's a reailty v.s. fantasy comparison. What is to say that given another 5 years Tesla won't "step it up" as you're saying???
 
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Delivery to Europe is 5 to 6 weeks, 4 weeks more than to US

It used to be around 6 weeks but it's now more like 8 weeks due to two reasons. 1) Eu cars are shipped by rail to NY which is slow 2) More work on the cars is being done in Tilburg rather than in Fremont. Here is a typical delivery schedule for a European customer ( Werkelijke wachttijd - Model S ) confirmed end of March, taken into production second half of April, shipped to the NY end of April, on the boat second half of May, expected arrival in Antwerp end of May, delivery with the customer end of June. And of course this is for a Dutch delivery, add another week if the car needs to travel inside Europe as well.
 
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In all probability, Model X demand is lower than Model S demand. How much lower is hard to say.

Based on fundamentals, I expect Model X demand to be almost exactly equal to Model S demand going forward.
-- Model X is in a class of cars (crossovers) which are more popular in the US market than the Model S class of cars (sedans), so you'd expect 10%-20% more demand
-- But Model X got weaker reviews than Model S, so you'd expect 10%-20% less demand
That's in the US.
-- In the EU, sedans are more popular than in the US.
-- But in China, the bias towards SUVs/crossovers is even stronger than in the US.
I think all these effects end up cancelling each other out, and Tesla ends up selling about the same number of Model X and Model S.

In the *short* term, Model X demand was suppressed by the botched launch and early quality problems. I'm not sure when that effect wears off, but it may have worn off already; I'm quite sure it doesn't stay around beyond, say, June of this year.
 
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I like mrdoubleb's link the best: https://teslamotorsclub.com/tmc/attachments/177438/

Now that founder's and signature model X's have been delivered, the customer deposits number is simpler to calculate.

With ~$400million worth of $5000 deposits, that's deposits for almost 80k vehicles!

Any concerns about model S/X demand should be compared against the size of the customer deposits.
I found some interesting data on this in the Norwegian forum. It seems like several cancellations made in March after the Model X was shown in Europe really first went through in April or later. This also includes signature reservations.

Problems getting a refund deposit -- Google Translate

Very arrogant Tesla -- Google Translate (Although that was a customer/bank error not Tesla's, doesn't change that they money was still held by Tesla)
 
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I like mrdoubleb's link the best: https://teslamotorsclub.com/tmc/attachments/177438/

Now that founder's and signature model X's have been delivered, the customer deposits number is simpler to calculate.

Not really. EU and Chinese signatures nor Founders have not been delivered. On top of that, from the annual report

TSLA Annual Report 2015 said:
We collect deposits from customers at the time they place an order for a vehicle and, in some locations, at certain additional milestones up to the point of delivery.

Those additional payments are import duties for Chinese cars and as I understand them they are quite hefty and need to be paid by the customer weeks if not months before delivery. With Chinese deliveries up quite a bit it's really hard to calculate the deposits back to a consistent backlog number. And that's even without mentioning customers who trade in a car (which sometimes happens days/weeks/months before delivery as well) Receipts from the trade in will instantly be recorded in the deposits, making it even harder to filter out the noise from the signal. I think at best we can guess that the backlog in terms of number of cars has grown more or less proportionally to demand (and production which also kept more or less in sync). A conclusion which I feel is substantiated by more or less flat waiting time of delivery for customers car. In the interest of transparancy, that last point of view is in dispute with the full back&forth in the relevant thread.
 
I found some interesting data on this in the Norwegian forum. It seems like several cancellations made in March after the Model X was shown in Europe really first went through in April or later. This also includes signature reservations.

Problems getting a refund deposit -- Google Translate

Very arrogant Tesla -- Google Translate (Although that was a customer/bank error not Tesla's, doesn't change that they money was still held by Tesla)
Not sure if you noticed, but the last article is two years old.

It is true enough that Tesla keeps the deposits for a period of time after a cancellation is initiated. This time period has been a bit long at times. (Tesla Norway seems to have issues in the accounting department - they've neglected to pay 240 bills to the point where they've gone to collection agencies. Not sure if this is related. Google Oversetter )
 
Not really. EU and Chinese signatures nor Founders have not been delivered. On top of that, from the annual report



Those additional payments are import duties for Chinese cars and as I understand them they are quite hefty and need to be paid by the customer weeks if not months before delivery. With Chinese deliveries up quite a bit it's really hard to calculate the deposits back to a consistent backlog number. And that's even without mentioning customers who trade in a car (which sometimes happens days/weeks/months before delivery as well) Receipts from the trade in will instantly be recorded in the deposits, making it even harder to filter out the noise from the signal. I think at best we can guess that the backlog in terms of number of cars has grown more or less proportionally to demand (and production which also kept more or less in sync). A conclusion which I feel is substantiated by more or less flat waiting time of delivery for customers car. In the interest of transparancy, that last point of view is in dispute with the full back&forth in the relevant thread.

Yes, the signature reservations are a big variable in the deposits equation - but at worst 1000 of them is $140 million.

And yes, I'm aware of your disagreement with vgrinshpun. From a nitty gritty perspective, I think his analysis is better, because his data set is more coherent. Although your method has more data points, it's incoherent since some of that data is extrapolated versus observed. I like what you did to tease out that extra information though. Perhaps a second order analysis is warranted - maybe a rate of change between data points over a 3month period to smoothen out end of quarter rushes?
 
Yes, the signature reservations are a big variable in the deposits equation - but at worst 1000 of them is $140 million.

And yes, I'm aware of your disagreement with vgrinshpun. From a nitty gritty perspective, I think his analysis is better, because his data set is more coherent. Although your method has more data points, it's incoherent since some of that data is extrapolated versus observed. I like what you did to tease out that extra information though. Perhaps a second order analysis is warranted - maybe a rate of change between data points over a 3month period to smoothen out end of quarter rushes?

I am happy to engage you on that one, but let's keep it in the relevant thread instead of starting it up here as well.

Personally wrt demand, if Tesla misses their guidance this year there must be something seriously wrong. They'll will have a total of 9k Model X's by the end of this quarter and another 20k reservations which they can fill in the remaining 6 months. Even if the Model S would just keep steady wrt to last year at 51k we are at 80k guidance. And remember they already hugely outperformed it in the first quarter and have all the visibility they needed to confirm another outperform for Q2 just a few weeks ago.

Recap : I can't see how they can deliver less than 51k Model S's this year. Impossible. It's already pretty much a given that we will see 9k Model X's delivered by the end of June and the reservations are there for another 20k at least. So the only risk really would be that they continue to have production problems on the X in the second half of this year. And even then there is enough margin in the S assumptions that they'll still make it up.