Production Rate (incl manufacturing waves)

[contaygious]

Nice!

 

[JRP3]

Nice!

Yeah, now everybody get back to work! :biggrin:

 

[Norbert]

So about 500 bodies were made this month, with an exponential increase (the same increase would result in 1,000 next month).

 

[JakeP]

Everytime I see one of those bodies is a time I wish they just offered a clear coat over the aluminum as a paintjob.

Yeah baby. Delorean special edition.

 

[NigelM]

Really? If so that is troubling, do you have numbers?

I don't think anyone (outside Tesla) has any numbers. Arguably the earlier numbers would have the highest cancellation rate over time, the other side of that would be to argue that the earliest adopters were the most committed. Personally, I don't see that it's truly predictable either way.

 

[timdorr]

Did Tesla release information on cancellation rates? I haven't seen any numbers that would lead to a guess at cancellation rates except for Sigs, which are sort of a special case.

Yep, there's info in the 8-K from last month:

Sales and Marketing Update
As of September 23, 2012, our Model S reservations, after subtracting deliveries, were approximately 13,000, up from approximately 11,500 at June 30, 2012. The third quarter has been the strongest quarter in our history for new Model S reservations, totaling more than 2,600 to date. We expect that our quarter-on-quarter new reservations will continue to grow as we open new stores and services centers worldwide, have more Model S vehicles available for customer viewing and test drives, launch our Supercharger network, make lower priced versions of Model S available, launch Model S in Europe and Asia and as consumer familiarity with Tesla and the Model S continues to grow. Our new reservations for the quarter were partially offset by cancellations which increased as we asked the first several thousand customers on our reservation list to configure their cars for delivery or risk losing their production slot. As a result, we expect that total net reservations for the quarter will increase by approximately 1,600. We expect the cancellation rate to decrease after we work through the older reservations on our list and there is less of a gap between a customer placing a reservation, configuring the car and receiving delivery.

So, there were about 1,000 cancellations in Q3 (2600 new reservations - 1600 net reservations), or a loss of roughly 7.5% in one quarter. That's certainly higher because of configuration requests serving as a trigger to have someone back out, but there are *definitely* holes in the reservation sequence. We saw a Sig over 1300 last week who got off the wait list, so there are at least 300 cancellations on that list and those are going to be your most resilient customers. I'm assuming Ps are going to cancel at higher rates because they have less at stake ($5k vs $40k).

 

[jerry33]

I'm assuming Ps are going to cancel at higher rates because they have less at stake ($5k vs $40k).

But in general, Ps have not had their reservation for three years either. In three years a lot can change in financial status, health status, and general interest in the car. Also the cancellation numbers include those who switched from Sig to P or from Sig to X, so the effective cancellation rate is actual lower than the raw numbers. There are also a few who had both a Sig and a P and cancelled one or the other. So if you take those factors into consideration, the actual cancellation rate might be as low as 2% or has high as 6%. I'd say it's closer to two than to six but there's really no way of knowing.

 

[ckessel]

Yep, there's info in the 8-K from last month:
...or a loss of roughly 7.5% in one quarter.

Ah, didn't see that.

Why is 7.5% high though? (You'd said the cancellation rate has been high in your earlier post). I suppose "high" is subjective, but 7.5% doesn't seem very high to me. I'm rather surprised it's that low given how long many of the folks in the first 5000 reservation holders have been waiting...people's situations change. Actually, I suppose it's really closer to 15% since cancellations are largely driven by requests to finalize and we're only about 1/2 the way through those I think.

Still, even 15% is way less than Sigs which had a 30+% cancellation rate (though "cancel" a bit fuzzy since some didn't really cancel, they dropped to P).

 

[NigelM]

So, there were about 1,000 cancellations in Q3 (2600 new reservations - 1600 net reservations), or a loss of roughly 7.5% in one quarter.

Thanks for finding that info. The calculation should also include the number of cars expected to be produced (paid for!) in the quarter as it's an increase in "total net reservations". The sum would be: 2,600 new - x cancellations - y cars delivered = 1,600 total net increase. In that 8-K report Tesla estimated deliveries of between 200-225 cars so the cancellations would have been about 775-800 and there's no reason to assume that those cancellations were all in the early numbers; while there's a weighting toward those who have been asked to configure after that I'd expect a certain amount of random distribution throughout the reservation list.

 

[timdorr]

So if you take those factors into consideration, the actual cancellation rate might be as low as 2% or has high as 6%. I'd say it's closer to two than to six but there's really no way of knowing.

I think you're doing your math wrong. The highest Sig sequence number we have is 1353. There are also ~250 special sigs, which are counted separately from normal sigs. So, that's 1603 total reserved out of 1000 produced, and therefore 603 cancelled, for a cancellation rate of 603/1603 = 37.6% cancellation rate. And that's among the sigs!

Another way to look at it from just the 8-K is that 1000 out of 2600 new orders cancelled. Again, those numbers will be high because they've been contacting those most likely to cancel, but that's still a 38.4% net cancellation rate for Q3 2012.

We'll get a better idea of the overall cancellation rate once production vehicles start getting VINs. We can look for gaps and figure out if, say P2000 gets VIN 2400 (production VINs are supposed to start at 1400), then we know there was a 50% overall cancellation rate. I don't think it would be that high at all (I'm thinking more like a 20% rate for the first 10,000 Ps), and it will go down over time as the timeframe between reservation and delivery shortens, as they pointed out in the 8-K.

Also, the 8-K is highly negative/conservative to avoid any possible self-promotion of stock, as per SEC regulations, so take what's put in there as a worst-case scenario.

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Thanks for finding that info. The calculation should also include the number of cars expected to be produced (paid for!) in the quarter as it's an increase in "total net reservations". The sum would be: 2,600 new - x cancellations - y cars delivered = 1,600 total net increase.

Oh, I totally missed that. Good catch!

 

[Omer]

Quick question on sequence #. When I was given a sequence # is that only for the production cars or does that include all cars? Basically is the first production sequence number 0001 or is it about 2000 (1300 sigs, 500 r's, 250 others)? I was given just a general sequence # 13,064 so I'm trying to figure out if that is really the 13,064 car built or 15,000th car built.

 

[aviators99]

Twitter / elonmusk: V proud of Tesla team for ...
V proud of Tesla team for completing 1000th Model S body. More cars made this month than entire rest of yearpic.twitter.com/k8XWaEth

Question (maybe best for those who have toured the factory and know its configuration):

Are the bodies behind the people surrounding "body#1000" bodies that were made before it or after it? If it's after, maybe we can assume no "pause"?

- - - Updated - - -

Quick question on sequence #. When I was given a sequence # is that only for the production cars or does that include all cars? Basically is the first production sequence number 0001 or is it about 2000 (1300 sigs, 500 r's, 250 others)? I was given just a general sequence # 13,064 so I'm trying to figure out if that is really the 13,064 car built or 15,000th car built.

Omer,

It is only for US production cars. So, it will be a higher number than if it included everything. It is unclear how many it will actually be. For US signatures, we know there will be exactly 1,000. I'm sure the 200 Canadian signatures will be manufactured before yours, so that's another exactly 200. It is completely unknown outside of Tesla how many Rs there are, because there will be cancellations or will have been upgrades in the past. We only know that there were around 500 R numbers given out, and where there were cancellations/deferrals, those slots were not filled in by waitlist like they were for signatures. There will also be many P (your list) cancellations. So, although the answer to your question is that the Ses and Rs will be built before yours, you still might be even lower than the 13,064th car built, due to cancellations, etc.

 

[Zzzz...]

Question (maybe best for those who have toured the factory and know its configuration):

Are the bodies behind the people surrounding "body#1000" bodies that were made before it or after it? If it's after, maybe we can assume no "pause"?

Not sure I'm fully understanding your question, but twitt imply that they have finished production of 1000th "body in white". So any body in the body shop still is in production... And they should have quite a few of those in different stages of completeness.

And next stage of production for #1000 would be paint shop...

 

[DouglasR]

For US signatures, we know there will be exactly 1,000.

Does this number include the SSLs?

 

[aviators99]

Not sure I'm fully understanding your question, but twitt imply that they have finished production of 1000th "body in white". So any body in the body shop still is in production... And they should have quite a few of those in different stages of completeness.

And next stage of production for #1000 would be paint shop...

My question is if those bodies behind the people in the picture are greater than 1000 or less than 1000.

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Does this number include the SSLs?

Yes, it does.

 

[FalconNinetyD]

Nigel, I believe he was taking into account cancellations, deferrals, those who aren't getting an 85kwh battery, non-air suspension cars, those who chose color combinations that won't be delivered until next year, etc.

I am still skeptical, and give it about a 20% chance that I will see my car by year end. I'm in CA, and can fly up to Fremont on the off chance that I can pick it up before year end. Maybe we'll find out more on the earnings call...

Either he was being very optimistic or Tesla's production target took a serious jump up. Don't want to burst your bubble but if Tesla is talking 2,500 cars by year end and there's 1,000 Sigs plus 200 CDA Sigs plus 500 R #'s then it's hard to see more than the first 1,000 P #'s going out before year end. If res# ~2,700 is delivered pre 12/31 that would put deliveries back close to ~4,500 which doesn't sound likely.

 

[NigelM]

I am still skeptical, and give it about a 20% chance that I will see my car by year end. I'm in CA, and can fly up to Fremont on the off chance that I can pick it up before year end. Maybe we'll find out more on the earnings call...

Given what timdorr came up with on cancellations I think you have a healthy view of your real chances.

P.S. Why do you think they'll mention your car on the earnings call? :wink:

 

[Larry Chanin]

Thanks for finding that info. The calculation should also include the number of cars expected to be produced (paid for!) in the quarter as it's an increase in "total net reservations". The sum would be: 2,600 new - x cancellations - y cars delivered = 1,600 total net increase. In that 8-K report Tesla estimated deliveries of between 200-225 cars so the cancellations would have been about 775-800 and there's no reason to assume that those cancellations were all in the early numbers; while there's a weighting toward those who have been asked to configure after that I'd expect a certain amount of random distribution throughout the reservation list.

To fine tune this a bit more, the estimated deliveries in the 8-K were as of September 23rd. On October 3rd Elon's blog update provided more precise numbers.

I am pleased to report that we completed production of 359 vehicles last quarter (delivering over 250 of those to customers) and have already made our 500th vehicle body.

So cancellations should not have exceeded 750.

Larry

 

[FlasherZ]

I was told this morning that my car has entered production and is in the "body in white" stage, this is new as of the weekend, I believe.

 

[ModelS1079]

I was told this morning that my car has entered production and is in the "body in white" stage, this is new as of the weekend, I believe.

Very nice. Congrats - the image of your car being - made - for you - has got to be awesome. You don't get that from Honda.

I love how, on the TMC forum, someone notes he/she has P#2747, and asks a simple question - do you really think I'll get it by years's end? And then dozens of answers complete with spreadsheets follow, one upon the next. Sweet. So let me enter a new number for Forum Calculation Fodder. I'm thinking Flasher Z's SSig 1189 (vin will be higher) is about half way to my P1079 (vin will be lower - FYI, reservation set in motion with a deposit in the first week of August, 2009). Gut feeling is there are about 987 production cars ahead of me (cancellations deducted), plus maybe 400 R's, plus maybe 350 USA/Canadian sigs left to build. That leaves 1,737 ahead of me. To get the car this year it actually has to be finìs by say Dec 15th or earlier (Boston delivery). That's a paltry 7 weeks away, or fully 248 cars per week average. Accurate? Possible for a 2012 delivery - or no?

Would appreciate the much-better-minds taking a better stab at when I might actually see P1079 come to life upon my doorstep. Many thanks.