Elon tweets - count @ 198k & rethinking prod - east coast doomed?

[rnelsonee]

Only time will tell, but as an East Coast line waiter like you, even though I was near the front of the line (well 35th out of 300), I think will be lucky if I get the car before 2019 unless I order the larger battery and AWD, which means >$50,000 (most likely). And that's if Tesla is on time.

With ~100,000 people ahead of me (West coasters, Midwest, fully optioned) I (we) just can't expect to get a Model 3 within 12 months of the first one rolling off the line. Tesla hasn't even delivered 100,000 vehicles in the US since their founding. To expect that in less than a year is too optimistic.

The tax credit being phased by time is nice - if 200,000 is Q2 2018, then a Q1 2019 gets me $3750, Q2-Q3 at least gets $1875.

 

[Bimbels]

If higher options are going first, that would mean (I think) PXXD west to east, then XX/XXD, xx/xxD. Typically they've built by battery size. The question will be if they increase the lines/ramp to move things quickly.

 

[vjason]

And I'm not even the one who should really be concerned. What about those outside N. America?

I'd hate to put ~2800 miles on the car just after I bought it, but if they told me I'd get it 9-12 months earlier if I picked it up at the factory I'd likely do it.

Believe me I understand prioritization to maximize revenue, but they've sold more than 7 months worth of production in 27 hours. The only thing that will hurt revenue at this point is not producing the cars fast enough, which will lead some to ask for their deposit back.

At the end of the day I just hope they can communicate how things will work, and that there is hope for those of us east of CA (and to be fair, outside N. America).

There already is. Everybody who's otherwise in your circumstance (non-owner, non-employee, lives in NC, ordering the same trim as you) will be behind you.

That said... I get your point. I'm in L.A., so I could walk in today and get the same trim as you, but get mine first. I see your frustration.

 

[Bimbels]

I will pick up my 3 on the West coast - if it gets me into that queue. I've been wanting to do cross country (one way - ha.) Hoping it's possible.

 

[pinski]

And I'm not even the one who should really be concerned. What about those outside N. America?

I'd hate to put ~2800 miles on the car just after I bought it, but if they told me I'd get it 9-12 months earlier if I picked it up at the factory I'd likely do it.

Believe me I understand prioritization to maximize revenue, but they've sold more than 7 months worth of production in 27 hours. The only thing that will hurt revenue at this point is not producing the cars fast enough, which will lead some to ask for their deposit back.

At the end of the day I just hope they can communicate how things will work, and that there is hope for those of us east of CA (and to be fair, outside N. America).

I'm in the same boat as you, and absolutely would do the same as well, if it meant getting it earlier. That said, I'm not sure that anybody knows for sure how the rollout is going to work.

For instance, when is the cutoff? Someone on the West Coast could probably walk into a Tesla store next week and jump me, but what about next month? Six months?

What about rollout? I've accepted that the first deliveries will go to Tesla owners on the West Coast, but it may not make sense to delivery all customer cars on the West Coast before proceeding east. I believe ours will be the last US queue opened and closed, but I would imagine that our queue will be opened before the West Coast queue is closed.

Just my $0.02 anyway.

 

[Allante]

I'm curious to see how all of the "skeptics" at Seeking Alpha will turn this into a negative.

Good 'ol Anton on Seeking Alpha already tried his hand at it this morning. His argument is this: Tesla is losing $20K per car today. The 100K backlog of Model 3 orders x $20K = a loss of $20 billion. Therefore, Tesla will soon go bankrupt, so start shorting now.

Gotta love him, as well as his partner in crime Montana Skeptic.

 

[Autolycus]

As an east-coaster, I will say that it would be pretty crappy, and possibly deal-breaking, if they don't use some blend of time, in person vs. online, and geography rather than just "all west coast preorders go first, then slide across the country." That could mean as much as a $7,500 net purchase price difference when we reserved ahead of many people on the west coast.

I fully expect to be fairly far down the list, and that's fine. Because of work, I could not get in line but did place a reservation in person at about 5:30-6:00pm EDT yesterday. But I still think I should get priority over someone who ordered online last night or anywhere today, except possibly priorities like employee, current owner, etc. But because I'm on the east coast, I might have to wait months longer than someone who placed an order 100k people later than me?! Come on.

Because of the way the tax credit phases out, I do hope that Tesla will be aggressive with their gaming of it. If they're close to 200k deliveries toward the end of a quarter, they could do a lot of their customers a solid by holding back shipments to keep from crossing 200k until the next quarter.

 

[JST]

I hope the first level of priority is by day and then rank according to their "factors." The idea that a non-owner/employee from CA who reserved today could receive a similarly equipped car before an east coast non-owner/employee just does not seem quite right.

I think we should not get too stressed out about where we are in line. I suspect that there will be a LOT of potential logistical factors that play into how cars get scheduled and delivered, from production mix to part/subcomponent availability to who knows what else.

I view the deposit as a way to participate in a fun game and as a way to guarantee that I'll have a spot sort of close to the front of the line. But I'm not going to complain too hard if what it ends up meaning is that I get a car 6 months after production starts, when someone else who ordered after me gets a car 5 months after production starts.

 

[bredi]

Good 'ol Anton on Seeking Alpha already tried his hand at it this morning. His argument is this: Tesla is losing $20K per car today. The 100K backlog of Model 3 orders x $20K = a loss of $20 billion. Therefore, Tesla will soon go bankrupt, so start shorting now.

Gotta love him, as well as his partner in crime Montana Skeptic.

which is why they need to be ignored.

 

[tanner]

that little fremont factory better ramp fast or lose a lot of this momentum. while some of us have waited as many as 4 years for the x, few first time tesla 3 reservation holders will be as patient. what will it take to add capacity at the fremont plant? triple shifts?

Definitely not "little"... It was once (under GM and Toyota) able to/will be capable of producing 500,000 cars a year.

 

[dgpcolorado]

The idea that all West Coast reservations will be filled before any East Coast reservations, makes no sense to me. I expect that the first batch of cars will go to the West Coast and then batches will work east from there. But the idea that those on the East Coast, never mind Europe and other overseas markets, will have to wait until all the West Coast reservations have been filled seems very unlikely to me.

I think the angst over this issue is unjustified.

 

[eye.surgeon]

Those Tesla workers are about to be pushed 10 times harder than they already are.

No one will get "pushed". This is California, we have the most highly regulated work environment in the country., Current workers may have the option of lucrative overtime, but certainly additional shifts will be hired. We are talking a thousand new employees or more.

 

[ZachF]

Definitely not "little"... It was once (under GM and Toyota) able to/will be capable of producing 500,000 cars a year.

I don't think the problem will be the Fremont plant, but getting battery production up to the full capacity. With the first day demand being what it is, I wouldn't be surprised if elon is thinking about doubling the capacity at the gigafactory before it's even been built... The problem isn't demand, it's supply. I also would not be surprised to hear about future factories and corresponding gigafactories to be announced in asia, Europe, and the eastern US in the coming months/years.

 

[Seesaw]

Wonder where I stand, being on the other side of the planet and in a right-hand-drive country?

 

[ImEric]

Good 'ol Anton on Seeking Alpha already tried his hand at it this morning. His argument is this: Tesla is losing $20K per car today. The 100K backlog of Model 3 orders x $20K = a loss of $20 billion. Therefore, Tesla will soon go bankrupt, so start shorting now.

Gotta love him, as well as his partner in crime Montana Skeptic.

Wait! I thought they were losing $4k/car? LOL! They can't even decide on their own non-math. Wasn't the last news from Tesla that they're approaching 30% profit on each car/suv they sell right now? With an Average selling price of about 100k, it's easy to do the math on their guidance for this year of 80-90k units moved. That's somewhere between 2 and 3.5Bn in revenue for 2016. Of course, doubling superchargers and service centers, continued expansion of the Gigafactory, fitting the Freemont factory to absorb higher capacities or Models S/X and the continued development of Model ≡ could easily eat through all of it, but that's to be expected from a company that doesn't expect to turn a real GAAP profit before 2020. Tesla could easily be massively profitable in Quarter 2 of 2016 if they wanted to be. But that would mean slowing down the expansion and probably missing the ≡ deadline, plus not having the proper infrastructure upon its release. Those guys are reaching at this point.

 

[BBryson]

I don't think the problem will be the Fremont plant, but getting battery production up to the full capacity. With the first day demand being what it is, I wouldn't be surprised if elon is thinking about doubling the capacity at the gigafactory before it's even been built... The problem isn't demand, it's supply. I also would not be surprised to hear about future factories and corresponding gigafactories to be announced in asia, Europe, and the eastern US in the coming months/years.

The availability of batteries may be the real limiting factor.

However, jtpassat posted this referance to a artical on Barrons.com about Model 3 production:
"Delivery will be a cakewalk"

 

[StraightDave]

Not all orders will be filled. Some people simply won't wait two years for a new model when all you have to do is wait another year for a CPO at half the cost.

 

[hoang51]

This priority issue has been beaten to death. See information from this thread here: East Coasters to get short end of the stick
Especially see post # 19 within that thread: East Coasters to get short end of the stick

Basically, to summarize, it would make sense in accordance with Tesla Motor's desire to ship out the highly priced Model 3 first, from west coast to east coast, then move down the Model 3 tier and ship out the next batch of lower cost Model 3. Within each batch, priority is picked from previous owners, employees, and first come first serve. So the east coast isn't entirely doomed. Just those who wants a basic Model 3 would be in for a long wait.

 

[mcghee33]

I'll be they can do 75k in the first year. 125k in 2019. 200k in 2020. They've got the demand on the books. Which bank wouldn't invest in a company with a problem like that? They'll get it done! WAY TO GO TESLA!

But can they do that many in addition to the Model S and X's that they have to build? Remember in 2015 they only produced 50k cars. So to think that they will be able to even double the amount of output would be a huge feat. I think that is why Elon is saying to hurry up and get your reservations in.....it also is a good marketing line

 

[Future3Driver]

I also think Elon and the leadership team understand the real demand and will add the resources necessary to meet the strategic objectives and aggressive timelines.