Waiting4M3
Active Member
Definitely looks like a play to keep US sales under 200K for Q2. Also AWD is looking more and more imminent since it will be a highly desired option for the Canadian market.
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This is the thing that's somewhat offsetting my internal angst at not yet having an invite (I'm a line-waiter who stood in line for several hours). I'd like AWD, but have been planning to go RWD so as not to delay the car once I get my invite. But while I'd like to believe AWD is imminent, I don't really believe that. I've got Mar-May showing for first production, and Late 2018 for AWD. I don't see Tesla beating that guidance by months as something realistic.
Waiting4M3
Active Member
AWD is showing mid 2018 for Canadians now, so maybe Tesla just hasn't bothered to update it for US customers.
skitown
Member
Owner here with a Model 3 reservation made online right before the presentation started. Mine shows "Dual Motor All-Wheel Drive - Mid '18"
ValueAnalyst
Closed
I really hope Tesla isn't attempting this... It would mean abysmal 2Q18 deliveries and margins.
I agree, as I've stated in the past. Sure looks like they're trying, though. I'm not sure what the rationale to divert further from the original plan to start with US deliveries is, other than perhaps that Tesla believes delivery capacity in the US is soon to be saturated. If that's the case, Canada is probably the obvious next-least-difficult set of locations to open up to Model 3 deliveries. But if delivery capacity is soon to be saturated while we're sitting at 2kish 3s/week, that's its own serious problem.
Why? You don't think they can sell all/most of the Model 3s they make in Canada? (Is the market too small?)
ValueAnalyst
Closed
No, Tesla can certainly sell all Model 3's produced to Canada... but I think 2Q18 financials would be horrendous if all S/X/3 were exported.
Where would all S/X go? Canadian sales of two mature products can't all of a sudden double QoQ. Think shipping costs, duties, taxes etc. etc.
There's a reason why almost all global automakers make majority of their profits in the United States.
Waiting4M3
Active Member
Why would the financials be bad if Tesla sells cars to Canada vs the US?
BTW I don't believe anyone is saying they will also sell all the MS/X to Canada. I think the working theory is that if they divert ~20K of M3 sales to Canada in Q2, they can stay under the 200K US sales threshold.
K_Dizzle
Member
Bingo, they’ll only send what they need to Canada.
K_Dizzle
Member
Keep in mind that the S and X are front loaded out of North America first. The last push usually ends up in Cali but Tesla could probably send a ton of cars to Vancouver. They could also create a demo/loaner fleet states side. This would keep production numbers up but revenue would be low.
Would AWD being imminent also be a reason why we have had a lack of recent configuration invites. I think it's been two weeks.
Waiting4M3
Active Member
I can't see a likely link between AWD and invitations. Instead I think Tesla just got too many orders that they expected from the 2/28 invites. They're opening invitations to Canada this week, so it's possible that they want to start limiting US M3 deliveries as soon as Q1 is over to try to stay under 200K US sales until Q3.
ValueAnalyst
Closed
The problem is that 'what they need' is likely a big percentage of 2Q US S/X sales. Best guesses had them at 162k as of 1/1/2018. Assume Q1 isn't a disaster on S/X and that's 175kish. Plus all 3 sales on Q1, so say 182k conservatively. To not get 18k sales in the US in Q2, you have to bet that they will sell only a few thousand S/X in the US all quarter, and/or that they are knowingly bullshitting a huge number of Mar-May reservation holders. If they start Q2 at 2k/week 3s and just stay there all quarter (which, recall, would be a huge miss--this is being very conservative), that's 24k 3s alone. So between 24k 3s and the usual 13kish S/X that usually hit the US in recent quarters, you have 37k vehicles. So 20kish of that would have to be directed outside the US, contrary to usual (with S/X) or stated plans (3).
Maybe it'll happen. It just seems like a big ask to me, and with a large potential for blowback. Sure, it'd extend the credit for some people, but it's also nuke the deliveries of many others.
Some impact on S/X Q2? probably. Abysmal? far from it. Upside? looks like at least about 60-70K more people with Mod3 reservations having an extra $3-4K (full tax credit eligibility vs 1/2) many are likely to spend much on options, which are high margin (and this doesn’t include enlarged number of reservationists it looks like will be getting 1/2 of credit vs 1/4, and 1/4 credit vs nothing). Of course, not everyone qualifies for tax credits, but even netting for that, a big plus for Tesla, and a very big plus for 100,000 plus of its customers.
We’ve been through this before. They may well have a small reshuffling of S/X sales (non-custom sales to rest of world can soak most of this up), but, we are talking about 3-5K not a big deal. Something around roughly 25K Canadian Model 3 deliveries, but, less if the ramp has anymore drag to it than current pace. 25K to Canada will only be challenging if dual motor is not ready.
We have been through it before, and I still disagree. Diverting that many 3s to Canada is a huge broken promise to the folks to whom they've been promised in Q2. You can say it's worth it for the greater good, but that's a big disservice to those folks, and if the theory is true then Tesla is knowingly telling those folks falsely that they will receive them in Q2.
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