Not enough buyers for the LR Model 3's

[derekmw]

Anyone see this article? Any thoughts on it? I am not surprised if it's true but curious how credible it is.

I'm selfishly hoping this is true so that the SR or Leasing becomes available sooner - even if the SR or leasing is not good for revenue numbers, if not enough people are buying the LR line up, at some point they will have to switch gears to get cars sold.

Tesla - Model 3 Demand At Current Prices May Be Causing Inventory Problems - Tesla, Inc. (NASDAQ:TSLA) | Seeking Alpha

 

[Vitold]

Yes we have seen this article last year and every week thereafter.

 

[Krugerrand]

Tesla has been selling that configuration for an entire year now and exclusively until recently when they added AWD and P cars.

No, demand is not exhausted for it by a long shot. There’s more than US and Canada on this planet. I know, shocker!

SR will start getting made some time next year, probably Q1.

 

[derekmw]

Wishful thinking on my part then. I didn't know the same type of articles were posted for a while.

My lease is coming up and I was interested in leasing the new P3D but based on current statements, the leases on M3's wouldn't be available before my lease ends (December). I was hoping they would bring leasing sooner if they needed to get rid of inventory.

 

[TJKR]

That Selling ALPO article is complete FUD by a short seller. If there is a demand issue with the RWD, during that Fremont "clearence sale" they should not have sold those vehicles in 2 days.. the fact is they were all sold. Also, people who are in line to buy one is simply buying the AWD version and Tesla underestimated the real time demand for AWD. The overall reservations and demand remains the same. As people buy them, they show them to their friends, neighbors and co-workers and people will learn these are amazing cars that cost nothing to fuel. Once that happens, give it 6mo's to 1 year, demand will soar and they'll have no problems selling 40,000 cars a month. The only problem that exists now is to get them en mass to customers.

 

[Abstrakt1]

If you really look at their numbers they say the exact opposite of the words in the article. Basically the entire case they are making is that Tesla is selling way too well to be sustainable. Until something happens to indicate that it can't be sustained it is just wishful thinking by a short seller.

 

[ItsNotAboutTheMoney]

Anyone see this article? Any thoughts on it? I am not surprised if it's true but curious how credible it is.

I'm selfishly hoping this is true so that the SR or Leasing becomes available sooner - even if the SR or leasing is not good for revenue numbers, if not enough people are buying the LR line up, at some point they will have to switch gears to get cars sold.

There is no way that Tesla is going to sell the SR at least until 2019Q1, if ever.

Their production is under-automated, and constrained anyway by parts supply (various reasons), so they aren't going to be able to afford to sell the SR at least until comfortably into 2019 (if ever).

The tax credit is upselling product, and we haven't even got into Q4 yet when the squeeze will really be on customers.
Tesla should be able to move some more 3 RWD at the end of this year as more consumers succumb, but at this point it seems that demand for the AWD isn't going to be a problem so Tesla will continue to milk it.

If you're hoping for an SR on lease, forget it.

 

[Canikony]

The demand in the US for RWD models has completely leveled off now.

 

[voip-ninja]

The demand in the US for RWD models has completely leveled off now.

What proof?

It very well might be true but I don't like it when people make pronouncements like this without facts to back it up.

If Tesla is now able to consistently deliver an LR RWD in under 30 days I would say that's a decent indicator that they have caught up with demand... not so sure it's an indicator that they have an abundance of inventory as has been claimed over and over again with very little backing data other than drone photographs of parking lots full of Model 3s being staged for delivery to other markets.

 

[chronopc]

Anyone see this article? Any thoughts on it? I am not surprised if it's true but curious how credible it is.

I'm selfishly hoping this is true so that the SR or Leasing becomes available sooner - even if the SR or leasing is not good for revenue numbers, if not enough people are buying the LR line up, at some point they will have to switch gears to get cars sold.

Tesla - Model 3 Demand At Current Prices May Be Causing Inventory Problems - Tesla, Inc. (NASDAQ:TSLA) | Seeking Alpha

Seeking Alpha is not a reliable source of information for Tesla.

 

[Big Earl]

There is no way that Tesla is going to sell the SR at least until 2019Q1, if ever.

Their production is under-automated, and constrained anyway by parts supply (various reasons), so they aren't going to be able to afford to sell the SR at least until comfortably into 2019 (if ever).

The tax credit is upselling product, and we haven't even got into Q4 yet when the squeeze will really be on customers.
Tesla should be able to move some more 3 RWD at the end of this year as more consumers succumb, but at this point it seems that demand for the AWD isn't going to be a problem so Tesla will continue to milk it.

If you're hoping for an SR on lease, forget it.

I agree that they won't be selling short range models until 2019Q1, but I think "if ever" is a major stretch. Do you really never expect Tesla to sell any short range Model 3s?

 

[Nocturnal]

I agree that they won't be selling short range models until 2019Q1, but I think "if ever" is a major stretch. Do you really never expect Tesla to sell any short range Model 3s?

Yeah, there is a finite demand for cars in the 3 series - BMW3 price range. Some folks can only afford a Camry.

 

[voip-ninja]

I agree that they won't be selling short range models until 2019Q1, but I think "if ever" is a major stretch. Do you really never expect Tesla to sell any short range Model 3s?

I don't think there should be any doubt that Tesla will delay introduction of a $35,000 car as long as they possibly can. Most likely course of action for them is to offer SR battery but require PUP and/or Dual Motor for at least the first couple of quarters they start delivery of those cars.

There will still be a reasonable amount of demand due to some amount of tax credit still existing at that time.

 

[Stirfelt]

Pure speculation on my part:

I have speculated (and posted) that the demand for a RWD (even LR) non-performance Model 3's has softened considerably.
I also suspect that Tesla has an inventory of such vehicles stored on lots around Fremont.
I have speculated that the AWD, performance Tesla has "sucked the wind" out of the the RWD, and that is why reservation holders that have not committed have received invites to purchase RWD, non-performance LR vehicles now for immediate delivery.

Finally, I suspect there are a large number of potential buyers that are waiting for the SR battery ...... cost being a major factor. They do not need AWD ..... and are not interested in performance. I find myself in that group. But the interest in an EV, the beautiful design and technology is what is "keeping us in the game."

If any of the above is true ....... then Tesla could easily solve the problem by reducing the price on the LR battery, and lowering the cost closer to the $35k vehicle that got so many of us interested in a Tesla in the first place.

 

[voip-ninja]

Pure speculation on my part:

I have speculated (and posted) that the demand for a RWD (even LR) non-performance Model 3's has softened considerably.
I also suspect that Tesla has an inventory of such vehicles stored on lots around Fremont.
I have speculated that the AWD, performance Tesla has "sucked the wind" out of the the RWD, and that is why reservation holders that have not committed have received invites to purchase RWD, non-performance LR vehicles now for immediate delivery.

Finally, I suspect there are a large number of potential buyers that are waiting for the SR battery ...... cost being a major factor. They do not need AWD ..... and are not interested in performance. I find myself in that group.

If any of the above is true ....... then Tesla could solve the problem by reducing the price on the LR battery, and lowering the cost closer to the $35k vehicle that got so many of us interested in a Tesla in the first place.

So, long story short, Tesla should reduce the price of the LR car and lose money on it to entice buyers and move already built inventory?

The real indicator that inventory is getting "stale" is if someone orders a new LR, today, and gets a really old VIN. I've seen a couple of anecdotal cases of that happening but not sure we can say it's a trend showing that they are over-stocked on LR cars.

Also keep in mind that other automakers do exactly what Tesla has done, crank out as many of a specific configuration as possible, store those cars and then ship them to distribution (or dealer lots).... one reason Tesla might have done this is if it's difficult for them to run RWD and DM cars on the same line. If DM cars are more profitable and there's tons of demand then it might have made sense for Tesla to over-produce LR cars for a period of time then shift gears and move the majority of production to DM to try to work their way through reservation holders.

Also worth pointing out there are still day 1 reservation holders for DM cars that haven't even gotten a delivery date yet. Some who have been scheduled are now being scheduled into October.

Once people realize they will give up $3750 of tax credit after 12/31/2018 we might see an uptick in demand across all products for Tesla and other EVs.

 

[Nocturnal]

Pure speculation on my part:

I have speculated (and posted) that the demand for a RWD (even LR) non-performance Model 3's has softened considerably.
I also suspect that Tesla has an inventory of such vehicles stored on lots around Fremont.
I have speculated that the AWD, performance Tesla has "sucked the wind" out of the the RWD, and that is why reservation holders that have not committed have received invites to purchase RWD, non-performance LR vehicles now for immediate delivery.

Finally, I suspect there are a large number of potential buyers that are waiting for the SR battery ...... cost being a major factor. They do not need AWD ..... and are not interested in performance. I find myself in that group. But the interest in an EV, the beautiful design and technology is what is "keeping us in the game."

If any of the above is true ....... then Tesla could easily solve the problem by reducing the price on the LR battery, and lowering the cost closer to the $35k vehicle that got so many of us interested in a Tesla in the first place.

If they have excess supply they just need to software limit them down to the SR range and relabel them as SRs.

Also worth pointing out there are still day 1 reservation holders for DM cars that haven't even gotten a delivery date yet. Some who have been scheduled are now being scheduled into October.

Once people realize they will give up $3750 of tax credit after 12/31/2018 we might see an uptick in demand across all products for Tesla and other EVs.

If the Democrats retake congress there is a decent chance we will see the incentive increased/restored to the full amount. ​

 

[kengchang]

If they have excess supply they just need to software limit them down to the SR range and relabel them as SRs.

Not going to happen, Tesla is planning to start making the SR pack in Q4.

 

[ItsNotAboutTheMoney]

I agree that they won't be selling short range models until 2019Q1, but I think "if ever" is a major stretch. Do you really never expect Tesla to sell any short range Model 3s?

I expect them either to sell short range Model 3s or go bankrupt, because the volume's in the SR.

Being able to sell short range Model 3s depends on improving margin.

They need to make The Tent work well, and duplicate the production line to other lines so that they lower manpower costs. Then they also need enough cash to pay all the key suppliers to increase their production before they can really ramp high.

Just don't be surprised if Tesla starts preparing for LR exports instead of releasing the SR because of the "new battery design" or some other excuse.

 

[dendenyc]

I thought they built cars based on reservation backlog? So every car they build more or less already has a owner on the leash, the only way I can see not enough buyers for LR is a) lots of people cancelled their reservations at the last min b) lots of people change their reservations to AWD or M3P at the last min but in this case the same LR model can be adapted to those other cars. Tesla doesn't have a dealer network so its not like they got car's sitting in a lot rusting away waiting for people to walk though the door...

 

[CUBldr97]

Any article or speculation that the market is softening for the Model 3 in any variation is just total hype, to short the stock. The market in Canada has barely been opened, and over seas has not started yet! so please stop the FUD. SEEKING alpha is known to be total BS, has been for 8 years or so on TESLA.