Q4'16 Delivery Estimates

[bonaire]

Weird thing was "5000 in transit" to end Q3. However, Oct / Nov sales numbers in Europe and estimates in the USA didn't really back that up. So, we don't know for sure really how many were in transit and if so, how many were simply inventory/marketing or actual Customer units.

Regarding Model S itself, this is the data but includes my estimates for Q4. All prior quarters are factual from the ER releases. Then add in the Model X activity and you can estimate the Q4 numbers. I adjust the Q4 data once we hear more about the sales and then after the Q4 ER comes out in February with production numbers and actual sales numbers adjusted. Actually - I do hope that the sales are better than I think they are for everyone's sake. But the actual data isn't "yelling" blow out quarter just yet.

 

[jbcarioca]

Has anyone carefully monitored Inventory cars? Until the last quarter that seemed pointless. As Inventory cars rise in the USA, Canada, Germany and a few other countries it does seem there may be an emerging practice to ship inventory in advance of sales. FWIW, two weeks ago there were >250 showing for the US, now there are 100. There were quite a few P100D both X and S coming and going recently. This would seem to suggest possible high deliveries during December end. Further, there have been numerous anecdotes about SC lots suddenly full of new cars, and shiploads of Teslas arriving within the last few weeks in some markets, even Hawaii.

This all may mean nothing. However, it more likely means a concerted effort to "fill the pipeline" even as last quarters spectacular promotions seem to not be in evidence.

The lack of drama makes me suspect we may be about to see the low end of guidance, but probably improved margins. As for GAAP, I will not guess, but I will observe that Solar City/Tesla made a few fairly large deliveries during the quarter, probably reducing losses from that side.

Weird thing was "5000 in transit" to end Q3. However, Oct / Nov sales numbers in Europe and estimates in the USA didn't really back that up. So, we don't know for sure really how many were in transit and if so, how many were simply inventory/marketing or actual Customer units.

Regarding Model S itself, this is the data but includes my estimates for Q4. All prior quarters are factual from the ER releases. Then add in the Model X activity and you can estimate the Q4 numbers. I adjust the Q4 data once we hear more about the sales and then after the Q4 ER comes out in February with production numbers and actual sales numbers adjusted. Actually - I do hope that the sales are better than I think they are for everyone's sake. But the actual data isn't "yelling" blow out quarter just yet.

View attachment 207908

Bonaire points out the mystery of the "in transit" vehicles. If exports have been increasing it is logical that we may see that again, but Norway, Germany and China seem not to be showing growth. I cannot see any support for a "blow-out" for the quarter.

 

[Crowded Mind]

Still tracking via sites like this: Tesla Registration Stats
and it's a moderate barometer when supplemented by EV Sales and the guesswork at Inside EVs - Electric Vehicle News, Reviews, and Reports along with Vin # tracking folks (I have a bunch). Lot of talk of US deliveries right now and "lots of cars at sales/service centers" but folks are not qualifying the units whether the window sticker says "Customer", "Marketing" or "Inventory". So the same review must be done on 1/1/17 or later to see what's left at these sites.

December must be extraordinary in all measures to be near most of the estimates above.

I think folks like the guy you mentioned above (Logical Thought) and even I underestimated back at the start of the year - but the estimating done then was based on what products were available at the time and the slow-start of the Model X with its FWD problems, etc. A 10-12% upside on those estimates looks like what will happen due to MS70, MS/MX 60, P100D and the new fascia (customers need to upgrade to look like having the latest model). Objectively, lots of levers for demand stimulation were pulled. And now AP 2.0 new hardware requires a full machine upgrade rather than keeping the old car and getting a software upgrade - where in the past "the car just gets upgraded with OTA downloads" is not working for the newer auto pilot which is still evolving. This may mean that unless similar levers pulled in 2017, the whole year really focuses in on the Model 3 rollout.

.....since there has never been a year when Tesla hasn't significantly improved their product offerings (what you call "demand stimulation"...) perhaps you should take that into account next time around.

 

[bonaire]

jb, here on this forum is a guy named cryptyk who did a brute force script to look up inventory and found hundreds of viable P100D which are not picked up by ev-cpo.com because Hank does not do the same style of search. He is in the market to buy one and wanted to know about "all inventory" for personal reasons. he shared his findings online and it was roughly 133 P100D in the Vin # ranges of 171xxx, 177xxx and low 178xxx. These cars can be used to get some funds from the ABL - Asset Backed Loan package from the banks. Completed cars at the high end of the price-range allow 85% of their value to be pulled from the ABL for working cash. this seems to be one reason to build very expensive cars at the end of the quarter (we saw a lot of P90DL made during mid to late Q2 as well - but interestingly, they were the Classic fascia - still possibly valued at Monroney sticker price for ABL borrowing - then dumped for $30-35k off during the Q3 sales cycle).

Anyway - more inventory means more ABL borrowing is possible for short-term needs and recently the ABL structure was increased substantially, perhaps to allow for more Tesla Finance leasing for anyone who couldn't get a US Bank lease.

This is normal business practice for inventory churn, presentation of new and different over old and less desirable. Seems like a normal business practice but is also a driving factor behind new-car sales - creating slight changes enough to cause customers to trade-in and trade-up to the latest features.

 

[EinSV]

<snip>

The lack of drama makes me suspect we may be about to see the low end of guidance, but probably improved margins. As for GAAP, I will not guess, but I will observe that Solar City/Tesla made a few fairly large deliveries during the quarter, probably reducing losses from that side.

Bonaire points out the mystery of the "in transit" vehicles. If exports have been increasing it is logical that we may see that again, but Norway, Germany and China seem not to be showing growth. I cannot see any support for a "blow-out" for the quarter.

Great post.

Just a quick note re China. According to ev-sales.blogspot Model S registrations in Oct./Nov. 2016 are 153% higher than Oct./Nov. 2015 (2022 v. 800). This does not include Model X registrations.

I am not sure how accurate these numbers are but they appear to indicate fairly significant growth y/y. The same source reports YTD Model S registrations in China are 7440 v. 4125 in 2015 YTD. I don't believe these numbers include Hong Kong but could be mistaken. IMO it is not difficult to account for all the vehicles in transit at the end of Q3 when all markets are included.

EV Sales: China

 

[zambono]

China is going to be a huge growth market for Tesla. China is going to have to grapple with their inner city pollution level much quicker than I am sure they anticipated. How long do you think a city of 20 million is going to stand while everything is turning black around them including their lungs.

 

[bonaire]

China is going to be a huge growth market for Tesla. China is going to have to grapple with their inner city pollution level much quicker than I am sure they anticipated. How long do you think a city of 20 million is going to stand while everything is turning black around them including their lungs.

Most definitely and their domestic market is blooming pretty well. Their in-country car manufacturers are welcoming EVs into the mix a lot better than the USA major car makers.

Good coverage here: EV Sales: China

 

[geneclean55]

During Q1/Q2, when many here were predicting good delivery numbers in the face of the available evidence, China came up a few times as a potential source of many additional sales that were unaccounted for, unfortunately this wasn't the case when the actual numbers came out. This time though, I think it might be different. Model X is rolling off the line in numbers, while broad Chinese EV sales (in particular SUV) are looking great. Considering many have suggested that the MX was built with the Chinese market in mind, I think we can expect to see some juicy delivery numbers there this quarter.

 

[dennis]

Has anyone carefully monitored Inventory cars? Until the last quarter that seemed pointless. As Inventory cars rise in the USA, Canada, Germany and a few other countries it does seem there may be an emerging practice to ship inventory in advance of sales. FWIW, two weeks ago there were >250 showing for the US, now there are 100. There were quite a few P100D both X and S coming and going recently. This would seem to suggest possible high deliveries during December end. Further, there have been numerous anecdotes about SC lots suddenly full of new cars, and shiploads of Teslas arriving within the last few weeks in some markets, even Hawaii.

This all may mean nothing. However, it more likely means a concerted effort to "fill the pipeline" even as last quarters spectacular promotions seem to not be in evidence.

I have been monitoring inventory cars closely this quarter. For $8/month you can subscribe to historical data on ev-cpo.com, but you are not allowed to share that data publicly. I will just state that Tesla has sold many times more non-demo inventory cars in Q4 than in any prior quarter. Part of this is because they built AP1 inventory cars in late Sep/early Oct before switching over to AP2 production. The late Sept production showed up in the Q3 "in transit" number. They also built AP2 inventory cars in Oct/Nov along side international custom orders before switching to NA custom orders in mid-November. All of this points to maximizing Q4 deliveries through both geographic batching and a tilt of the sales model toward fulfilling demand from sales prospects who don't want/need to wait for a custom delivery.

I am confident that Tesla will make their 25K number through this change in sales tactics. For example there is only one AP1 inventory car available in the US on ev-cpo as of this morning. If they were worried there would be discount promotions or leasing deals going on right now. The only one I am aware of is $10K off on P100D AP2 cars right now to capture additional GM/cash flow. The only open question is how many inventory cars will be on the balance sheet at the end of Q4 vs. how many will be in the hands of customers and show up on the revenue line.

 

[dennis]

Weird thing was "5000 in transit" to end Q3. However, Oct / Nov sales numbers in Europe and estimates in the USA didn't really back that up. So, we don't know for sure really how many were in transit and if so, how many were simply inventory/marketing or actual Customer units.

Tesla was building AP1 inventory cars in the latter part of September. These would show up in transit. Those that were shipped for international destinations are unlikely to be reflected in Oct/Nov sales. The US ones may or may not have been sold prior to December. But as of today there is only one AP1 inventory car in ev-cpo. There are however several hundred such cars available in Europe.

 

[jbcarioca]

Tesla was building AP1 inventory cars in the latter part of September. These would show up in transit. Those that were shipped for international destinations are unlikely to be reflected in Oct/Nov sales. The US ones may or may not have been sold prior to December. But as of today there is only one AP1 inventory car in ev-cpo. There are however several hundred such cars available in Europe.

How to account for cars assembled in The Netherlands? Do those show up in ev-cpo? They do, if not delivered appear as inventory. Does not ev-cpo include cars that might actually have confirmed buyers and other unsold cars whether they are actually available to buy or not? I admit I do not have any idea how to reconcile what appears on Tesla.com vs elsewhere and I know of at least one Tesla delivery specialist who uses ev-cpo. Probably all this is covered in other threads...

 

[jbcarioca]

Great post.

Just a quick note re China. According to ev-sales.blogspot Model S registrations in Oct./Nov. 2016 are 153% higher than Oct./Nov. 2015 (2022 v. 800). This does not include Model X registrations.

...

EV Sales: China

Most definitely and their domestic market is blooming pretty well. Their in-country car manufacturers are welcoming EVs into the mix a lot better than the USA major car makers.

Good coverage here: EV Sales: China

Regarding China: Tesla sales have slowed a bit during the last two quarters, it seems. However, as bonaire points out the domestic EV market is booming and will continue to boom since there have been major EV incentives in place that make it far easier to buy, use and register an EV than an ICE in big cities, especially Shanghai and Beijing. In addition only a few weeks ago China announced major liberalisation for foreign manufacture of EV's in China, making them eligible for domestic treatment. That is a huge development and tesla is moving fast to take advantage of the new regime.

However, those great things are excellent for 2018, maybe even late 2017, but not now. Further, the Chinese market is strongly biased towards smaller vehicles, and even the Model 3 is a large car by domestic Chinese market terms.
As a long term TSLA prospect China is wonderful. For 4Q 2016 I don't see anything pointing to boon.

 

[dc_h]

Still tracking via sites like this: Tesla Registration Stats
and it's a moderate barometer when supplemented by EV Sales and the guesswork at Inside EVs - Electric Vehicle News, Reviews, and Reports along with Vin # tracking folks (I have a bunch). Lot of talk of US deliveries right now and "lots of cars at sales/service centers" but folks are not qualifying the units whether the window sticker says "Customer", "Marketing" or "Inventory". So the same review must be done on 1/1/17 or later to see what's left at these sites.

December must be extraordinary in all measures to be near most of the estimates above.

I think folks like the guy you mentioned above (Logical Thought) and even I underestimated back at the start of the year - but the estimating done then was based on what products were available at the time and the slow-start of the Model X with its FWD problems, etc. A 10-12% upside on those estimates looks like what will happen due to MS70, MS/MX 60, P100D and the new fascia (customers need to upgrade to look like having the latest model). Objectively, lots of levers for demand stimulation were pulled. And now AP 2.0 new hardware requires a full machine upgrade rather than keeping the old car and getting a software upgrade - where in the past "the car just gets upgraded with OTA downloads" is not working for the newer auto pilot which is still evolving. This may mean that unless similar levers pulled in 2017, the whole year really focuses in on the Model 3 rollout.

Demand levers ~ product innovation + market expansion.

Innovation since 2012 includes several battery upgrades, AP1 & AP2, ludicrous mode, upgrades to interior, update/upgrade of exterior, improvement to software and display, and I'm sure more.

Market expansion includes increased awareness, new stores, new markets (S Korea, Taiwan, Mexico, Russia?).

I expect HUD in 2017, P100, possible 2170 battery by end of year. P125D would be an effective lever, and cutting charge time in half, and that self driving full autonomy thing. Innovation is not stopping or slowing down. Spreading software Deva over bigger set of vehicles should speed innovation even more.

 

[dc_h]

In addition only a few weeks ago China announced major liberalisation for foreign manufacture of EV's in China, making them eligible for domestic treatment. That is a huge development and tesla is moving fast to take advantage of the new regime.

Do you have more data to support this? Would be interesting/big news if Tesla opened a Chinese Tilburg. Assemble packs in Japan, cars in USA and final assembly in china with reduced tariffs.

 

[geneclean55]

Regarding China: Tesla sales have slowed a bit during the last two quarters, it seems. However, as bonaire points out the domestic EV market is booming and will continue to boom since there have been major EV incentives in place that make it far easier to buy, use and register an EV than an ICE in big cities, especially Shanghai and Beijing. In addition only a few weeks ago China announced major liberalisation for foreign manufacture of EV's in China, making them eligible for domestic treatment. That is a huge development and tesla is moving fast to take advantage of the new regime.

However, those great things are excellent for 2018, maybe even late 2017, but not now. Further, the Chinese market is strongly biased towards smaller vehicles, and even the Model 3 is a large car by domestic Chinese market terms.
As a long term TSLA prospect China is wonderful. For 4Q 2016 I don't see anything pointing to boon.

Do you have evidence for this? I am reading the complete opposite. For example, read post by SBenson today in the short-term price movements thread.

 

[jbcarioca]

Do you have more data to support this? Would be interesting/big news if Tesla opened a Chinese Tilburg. Assemble packs in Japan, cars in USA and final assembly in china with reduced tariffs.

This explains the full rage of incentives, including foreign investments:
Shifting Gears: Investing in China's Electric Vehicles Market - China Briefing News
This was Elon's 2014 plan announcement:
Musk Says Tesla Will Make Cars in China in Next 3-4 Years
Here is the Electrek article from June that gives the gist of current events:
Elon Musk denies deal for a Tesla joint-venture in China, and maybe he will not need one

The following comments are sourced from people I know well who are pretty current on Chinese thinking but are not infallible. I cannot attribute these to anyone publicly:
There are rumors that Tesla has been seeking official Chinese approvals for a series of plans that may include vehicle production, battery production, a "much more robust distribution plan" and other plans. I do not know any more than that. My source thinks that Tesla will design China specific model(s), produce and distribute PowerWall and possibly solar cells, although the most likely options seems to be that Tesla will make Chinese partnerships for PowerWall distribution rather than being involved directly in either solar cell production or PowerWall distribution. It seems there is Chinese interest in the SolarCity roof tiles.

If even a fraction of current rumors are valid Tesla will be far more aggressive than another Tilburg. Look for a gigafactory announcement within the next few months, plus other announcements next year. One major unknown is Trump Administration China policies that could derail much of these plans. Some of this might have been agreed by now were it not for the unknown future of US/China relations.

 

[dennis]

How to account for cars assembled in The Netherlands? Do those show up in ev-cpo? They do, if not delivered appear as inventory. Does not ev-cpo include cars that might actually have confirmed buyers and other unsold cars whether they are actually available to buy or not? I admit I do not have any idea how to reconcile what appears on Tesla.com vs elsewhere and I know of at least one Tesla delivery specialist who uses ev-cpo. Probably all this is covered in other threads...

Ev-cpo only shows new/demo and cpo cars that Tesla is currently offering for sale through its website(s). There are always other cars in inventory that Tesla has not chosen to offer up for sale yet . But none of them are cars that are already destined for customers.

 

[EinSV]

Regarding China: Tesla sales have slowed a bit during the last two quarters, it seems. <snip>

Do you happen to have a source for this? The credible sources I have seen so far suggest the opposite -- that sales in China have been accelerating recently.

For example, ev-sales.blogspot reports 5144 Model S registrations in China in 2H 2016 through November versus 1978 for the same period in 2015. The same source cites 2296 Model S registrations in the first six months of 2016, which translates to 2H 2016 registrations running at 270% of the pace of the first half of the year (1029/mo v. 383/mo). None of these figures include Model X.

EV Sales: China

But reliable and timely data from China is hard to come by so if you have other information to factor in that would be helpful.

 

[oneday]

25,883 delivered 26,400 built

 

[jbcarioca]

Do you happen to have a source for this? The credible sources I have seen so far suggest the opposite -- that sales in China have been accelerating recently.

For example, ev-sales.blogspot reports 5144 Model S registrations in China in 2H 2016 through November versus 1978 for the same period in 2015. The same source cites 2296 Model S registrations in the first six months of 2016, which translates to 2H 2016 registrations running at 270% of the pace of the first half of the year (1029/mo v. 383/mo). None of these figures include Model X.

EV Sales: China

But reliable and timely data from China is hard to come by so if you have other information to factor in that would be helpful.

No, I have no reliable source. for that statement. The ev-sales.blogspot is, I hope, more accurate than what I suggested. Hopefully, I'm wrong.