-
Want to remove ads? Register an account and login to see fewer ads, and become a Supporting Member to remove almost all ads.
Waiting4M3
Active Member
The more critical things are the # of moving parts, as those tend to break more often. In ICE cars the engine, transmission, and possibly mechanical AWD system have thousands of moving parts, vs EVs having 1/10 as many.
plankeye
That Vegan EV Guy
The surveillance of the GF isn't constant. The most recent satellite photo if from May 31. There was a drone flight on June 1 that looks like that big cleared area has been paved, but I can't be 100% sure. And why should Tesla really care if people found out they were stashing cars. The FUD crowd might have a coronary, but they will do that anyway. They aren't going to get into any legal trouble for ginning the incentive system. There is no law that requires a car manufacturer to sell a car as quickly as possible after it's made.
jstoneman
Member
My theories are:
1) with the tax credit situation looming, lots of cars will be stock-piled in outdoor locations for some period of time so need a bit extra exterior protection
2) these cars are shipping by rail so need extra protection
3) these cars are destined for overseas as demo or showroom
1. Tesla has less than $3B in Cash on hand. Delaying deliveries for more than 2-3 weeks in their closest-to-destination market would create a cash crunch situation that would lead them to become quickly insolvent. Cars that are shipped overseas usually need Credit Lines to pay for parts before sales payments are received due to the extra delivery time. There is 0% chance that Tesla would stockpile cars in the states to wait for a tax credit for customers. Even three weeks of delay could cause catastrophic cash crunch. Sending them to Canada? Yes, but remember Tesla needs to convert completed units to cash as fast as possible. Musk has mentioned in the past that $3B is about as low as you can go when you are trying to run a car company.
2. Cars shipped by rail are generally sent in big enclosed trailers, so less protection would be required. However, an exposed trailer on the way up to Canada, would probably need to be completely wrapped.
3. Tesla won't be expanding to any international show rooms with the Model three until 2019. No use in making the line any longer in down-stream markets.
1) with the tax credit situation looming, lots of cars will be stock-piled in outdoor locations for some period of time so need a bit extra exterior protection
2) these cars are shipping by rail so need extra protection
3) these cars are destined for overseas as demo or showroom
1. Tesla has less than $3B in Cash on hand. Delaying deliveries for more than 2-3 weeks in their closest-to-destination market would create a cash crunch situation that would lead them to become quickly insolvent. Cars that are shipped overseas usually need Credit Lines to pay for parts before sales payments are received due to the extra delivery time. There is 0% chance that Tesla would stockpile cars in the states to wait for a tax credit for customers. Even three weeks of delay could cause catastrophic cash crunch. Sending them to Canada? Yes, but remember Tesla needs to convert completed units to cash as fast as possible. Musk has mentioned in the past that $3B is about as low as you can go when you are trying to run a car company.
2. Cars shipped by rail are generally sent in big enclosed trailers, so less protection would be required. However, an exposed trailer on the way up to Canada, would probably need to be completely wrapped.
3. Tesla won't be expanding to any international show rooms with the Model three until 2019. No use in making the line any longer in down-stream markets.
Why should Tesla stockpile cars with 450k reservations out there and people desperately trying to give Tesla their money?
Yes, I am aware about the tax credit structure in the US but they can easily optimize by sending most of the cars (M3) to Canada and S and X international (if required) get all cash in they can and start delivering again in the US next quarter. Best of both worlds...
It would be pretty stupid to even consider pile up cars in a situation where they intend to move to profitability. ... and I believe Elon is the opposite of stupid....
Assuming Canada is saturated (otherwise better to sell there instead) :
If the German tear down is correct about the $28k per car, and Tesla hits 5k per week, and they delay 3 weeks worth of sales: that is $420 million in deffered cost recoup. ($270 million of which is parts which may have longer repayment timing, thus not impacting cash flow). Sub one month shift in the cash flow. (Much less, since average sales delay would only be 11 days)
An extra quarter at 5k/wk yeilds at least $450 million in additional tax credits on 3 alone. $90 million for S/X if they focus on the US. If only 20% of that bump goes into extra options at 50% gross margin, Tesla makes an extra $54 million. A 10% return on a 2 week investment. Plus tons of good will.
Seems smart to me.
If the German tear down is correct about the $28k per car, and Tesla hits 5k per week, and they delay 3 weeks worth of sales: that is $420 million in deffered cost recoup. ($270 million of which is parts which may have longer repayment timing, thus not impacting cash flow). Sub one month shift in the cash flow. (Much less, since average sales delay would only be 11 days)
An extra quarter at 5k/wk yeilds at least $450 million in additional tax credits on 3 alone. $90 million for S/X if they focus on the US. If only 20% of that bump goes into extra options at 50% gross margin, Tesla makes an extra $54 million. A 10% return on a 2 week investment. Plus tons of good will.
Seems smart to me.
The tax incentive is a big deal here in the US. They probably are trying to sell as many cars as possible in Canada this month, but Canada's market is 1/10 the size of the US market. Just like the US, there are a fair number of people who got their reservation number come up who have opted to wait for the AWD, Performance version, or shorter range battery. The AWD has more demand in Canada because a lot more Canadians have to drive in bad winter weather than Americans do. The only Canadians who don't have to drive in bad winter weather either don't have a driver's license, leave the country in the winter, or live in Vancouver or Victoria. Over half the US population rarely or never has to drive in snow.
So there is a limit to how many orders they can fill in Canada this month. Tesla can also build out the Model 3 demo fleet for the US this month which will push those sales off a couple of months. However, I do think they will need to stockpile some US orders at the end of the month to push them off into July. If they need some financial coverage, they could always get a couple week bridging loan to keep the cash flow positive. Any costs incurred from storing cars for a couple of weeks will pay off in Q3 and Q4.
RTPEV
Active Member
Sorry to go back several days of topics (was mostly out of pocket since last Thursday), but you all are still talking about it, so I guess it's still relevant:
Super-wrapped Model 3s: Sorry to burst the conspiracy theory bubble, but phigment already shared what I was going to: one of these super wrapped vehicles was spotted in Canada as far back as May 16 as you can see in this video:
Almost certainly not performance, white interior, or Model Y or anything special. I suppose it could be a showroom model, but I really doubt that as well. More likely they are just experimenting with different wrapping techniques, or they found Flufferbot something he was good at.
As for the "stockpiling" situation. The word "stockpile" has a connotation here that I don't think is accurate. I think people are thinking that they are going to park the whole lot of stockpiled vehicles in a single lot either in Fremont, or Oakland, or Sparks. If in fact that's what Tesla is doing (and I think they are), that is definitely not how they would do it. They would distribute those vehicles around the country to delivery hubs and centers close to or at the locations of final delivery so that they are sitting there ready to be delivered that first week of July. Not only does this expedite the delivery process for all those folks that got the "July" e-mail, but it also means they don't have to lease a giant parking lot or store cars in the middle of the desert for 4 weeks.
I've run the numbers and to defer to 200K until July means they will have to ship about 10K Model 3's to Canada and "store" 12K Model 3's around the US. But I really think those are going to be spread across the whole country, so you end up with only 100 at each delivery center on average.
Yes, that's still a huge number and probably far exceeds the capacity at most delivery centers. Each delivery center might have to arrange for some offsite parking. Or not. The Charlotte, NC delivery center (located at a former dealership) for example can hold over 250 vehicles parked in the spots and could easily store 300+ if they park in the aisles. I'm not in Charlotte, but if I was looking for a LOT of Model 3s, that's one place I would look. We should all have our eyes open for these kinds of lots.
As for whether it makes business sense for Tesla to do this...well perhaps off-topic for this thread, but you better believe it makes sense!
First of all, even if they push ahead and not defer until 3Q, they will probably not be profitable in 2Q anyway. On the other hand, they can make a good case for WHY their numbers look the way they do in 2Q by stating what will probably be a massive "12,000 vehicles in transit". The smart investor (and note that this group does not include your classic shorts, but I think even most of them will see what's going on) will realize that the 2Q sales were simply deferred a few weeks into 3Q, so as much as they love quarterly results, they know the revenue will soon be realized and it is practically immaterial to the financial health of the company. PLUS, it sets them up to practically guarantee a profitable 3Q because all that revenue will be claimed in that quarter. It's a bit of a smoke and mirrors play and not sustainable, but while the ramp still continues, it will certainly guarantee getting them over the transitional quarter. And if that weren't enough of a business reason, look ahead to when the tax credit does expire. At this point, Tesla will face a price headwind against the competition. If they don't defer, the headwind will be an additional 1 quarter than if they don't defer. In the grand scheme, I suppose 3 months isn't going to make a huge difference, but in business, every advantage helps.
Super-wrapped Model 3s: Sorry to burst the conspiracy theory bubble, but phigment already shared what I was going to: one of these super wrapped vehicles was spotted in Canada as far back as May 16 as you can see in this video:
Almost certainly not performance, white interior, or Model Y or anything special. I suppose it could be a showroom model, but I really doubt that as well. More likely they are just experimenting with different wrapping techniques, or they found Flufferbot something he was good at.
As for the "stockpiling" situation. The word "stockpile" has a connotation here that I don't think is accurate. I think people are thinking that they are going to park the whole lot of stockpiled vehicles in a single lot either in Fremont, or Oakland, or Sparks. If in fact that's what Tesla is doing (and I think they are), that is definitely not how they would do it. They would distribute those vehicles around the country to delivery hubs and centers close to or at the locations of final delivery so that they are sitting there ready to be delivered that first week of July. Not only does this expedite the delivery process for all those folks that got the "July" e-mail, but it also means they don't have to lease a giant parking lot or store cars in the middle of the desert for 4 weeks.
I've run the numbers and to defer to 200K until July means they will have to ship about 10K Model 3's to Canada and "store" 12K Model 3's around the US. But I really think those are going to be spread across the whole country, so you end up with only 100 at each delivery center on average.
Yes, that's still a huge number and probably far exceeds the capacity at most delivery centers. Each delivery center might have to arrange for some offsite parking. Or not. The Charlotte, NC delivery center (located at a former dealership) for example can hold over 250 vehicles parked in the spots and could easily store 300+ if they park in the aisles. I'm not in Charlotte, but if I was looking for a LOT of Model 3s, that's one place I would look. We should all have our eyes open for these kinds of lots.
As for whether it makes business sense for Tesla to do this...well perhaps off-topic for this thread, but you better believe it makes sense!
First of all, even if they push ahead and not defer until 3Q, they will probably not be profitable in 2Q anyway. On the other hand, they can make a good case for WHY their numbers look the way they do in 2Q by stating what will probably be a massive "12,000 vehicles in transit". The smart investor (and note that this group does not include your classic shorts, but I think even most of them will see what's going on) will realize that the 2Q sales were simply deferred a few weeks into 3Q, so as much as they love quarterly results, they know the revenue will soon be realized and it is practically immaterial to the financial health of the company. PLUS, it sets them up to practically guarantee a profitable 3Q because all that revenue will be claimed in that quarter. It's a bit of a smoke and mirrors play and not sustainable, but while the ramp still continues, it will certainly guarantee getting them over the transitional quarter. And if that weren't enough of a business reason, look ahead to when the tax credit does expire. At this point, Tesla will face a price headwind against the competition. If they don't defer, the headwind will be an additional 1 quarter than if they don't defer. In the grand scheme, I suppose 3 months isn't going to make a huge difference, but in business, every advantage helps.
plankeye
That Vegan EV Guy
Plus, when people can get a $7500 discount on the car, they are more likely to order expensive options that they might not have otherwise. Take me for example...I ordered LR when I swore I was waiting for SR. So, the small delay will guarantee them even more revenue and profit.
I highly doubt Tesla will ever bankrupt another automaker. There are OEM's and other Automakers that are gaining far more knowledge of EV's than Tesla and can make this technology available quickly if needed. The disadvantage Tesla has is mass production ability. Being easier to design and produce may put intense pressure on Tesla to ever become profitable. The battery technology is from Panasonic, Telsa does not have a monopoly with Panasonic.
Garlan Garner
Banned
It is true that Tesla is doing all the hard work, pioneering the BEV with its drive-train, battery + control systems and charging technology.
In German that is called "Vorsprung durch Technik", but I think it was meant with someone else in mind.
And yes, incumbents like Audi can piggyback on Tesla's innovative work, avoiding some of their mistakes. That will put them in second place.
And they are _many_ years behind Tesla, it is already six years ago that Tesla began selling the Model S and deployed its supercharger network.
No one can balance battery cells with Tesla's precision. No one else can build the Model 3 profitably.
Just three months ago the 811 NMC cathode composition was believed to be two years away,
Exciting Developments In NMC 811 Lithium Battery Technology | CleanTechnica
- and now it turns out that Tesla already achieved that low Cobalt content in the 2170-cell found in M3 production models.
The Germans are so far behind in battery technology that it is ridiculous. Just a couple of years ago, an executive from a leading German auto manufacturer was ridiculing Tesla's use of old fashioned battery technology. This was based on Tesla's use of the 18650 form factor - right around the time when Tesla tweaked their cell chemistry with silicon...
And what exactly is the world's leading OEM in super advanced, high-precision, automatic transmissions going to do with all their domain specific know-how? If you asked them if the cathode is at the plus or minus, they would have to look it up.
So I don't share your optimism.
I am just happy that the greater Munich area where I live has a very diverse high tech industry, otherwise it could turn into a European version of Detroit. Well, they would still have the beer. And social security.
PS. If I come across as critical of the German auto industry then it is because I have been driving Audi for 15 years, and I have to say they have dropped the ball...
Last edited:
From your much appreciated observation of the lot (Thanks!) and your sources, what is your opinion of what the daily production rate is compared to when it was roughly 500/ day?
Garlan Garner
Banned
Tesla is producing many multiples of the number of EVs produced by existing ICE manufacturers, so where are the others gaining this knowledge advantage over Tesla - through osmosis? Especially when like GM they rely on a supplier for the entire Bolt battery and drivetrain. You learn by doing, and from the experience and data from selling, charging and servicing hundreds of thousands of four models of car around the world.
And as others have pointed out, Panasonic provides components to Tesla’s requirements, in collaboration with Tesla. Tesla puts them into packs and does the thermal and charging management technology. Much if not most of the competitive advantage lies there.
Some automakers definitely won’t manage the shift to EVs successfully and will go out of business. Just like Fuji Film and many camera makers managed the shift to digital, while Kodak and others didn’t. Tesla on its own won’t have put them out of business, but the industry shift they accelerated will.
Similar threads
