Reservation Cancellation Rate

[kenliles]

+1 smorg

 

[spatterso911]

I completely agree smorgasbord.

 

[wstuff]

I agree with Smorg, these numbers games are always a little dangerous, you get a number for cancellations and no breakdown of the logistics involved in it's formation. You have wanna bee's that just couldn't get the money together , unsuspected job loss, divorce ( they would both be fighting over the car, forget the kids) :crying: and then there will be a host of other tactics, people who put in a RES but got talking and decided the X was more the car they want and it gives them a bit more time, I'm sure paperwork wise even a res moved from S to X is still an S cancellation on the books. I really don't worry about it, the car is a FENOM, tesla seems to be doing everything right and if some of the JOKERS out there can run a company and make money with some of the decisions I see being made then TESLA is a solid lock, I'm in!. LOVE MY CAR:smile:

 

[Alpha]

Apparently the bad review in the NYT led to hundreds of cancellations! Wow....
Elon Musk: NYT Model S Review Cost Tesla $100M

 

[lolachampcar]

Elon was lumping stock hit and reservation loss when he offered the $100M number. People said he was agressive in his response. You take $100M off the table on my start up and I'll be significantly less polite. I think he did a fantastic job dealing with the problem this time around.

 

[Robert.Boston]

Winnowing the chaff. It's easy for Tesla to tally the cancellations, but how does it measure the benefit from the vast amount of free press coverage (mostly positive, some enthusiastically so) that the Broder incident generated? As a Model S owner, I know the product well, and nothing that Broder did or didn't do changes my confidence in the product or the company and, therefore, in the ultimate value of the stock. New events like this merely provide buying opportunities.

 

[fiksegts]

I reserved on 12/19/2012 and got my car 1/21/2013.... someone didn't pay up and I bought theirs....

 

[smorgasbord]

New events like this merely provide buying opportunities.

Tesla has stated that the Top Gear review of the Roadster resulted in a permanent decrease in the number of Roadster sales in the UK compared to nearby countries.

Who's to say that the NYTimes review won't also have a long-lasting impact on sales, particularly in the US Northeast?

Anyone who remembers the Audi 5000 press knows how damaging even truly falsified coverage can be. 60 Minutes even admitted to fraud, yet Audi struggled for years.

 

[Norbert]

I think there is a good chance that Tesla can turn this around into something positive, since Model S will still sell in large numbers and people will find out they can in fact make such trips with the Model S. Model S is getting many rave reviews, and now that more people know what Model S is, and have some level of interest, they may (eventually) listen when that contradicting information comes around a few times. Also, the more Model S owners know from personal experience that their car can in fact make such a trip, the better.

 

[kenliles]

that's a good point and I suspect it played a role in how Elon handled it; Given he did though and I'm guessing the damage will be short lived and minimal;

 

[ToddRLockwood]

I completely agree. Tesla simply needs to keep showing how the car and the superchargers provide effortless travel when used properly.

Meanwhile, car enthusiasts are climbing back on board thanks to Road & Track's groundbreaking review...

Return to Power: the 2013 Tesla Model S - Road & Track

Fantastic!

 

[fasferrari]

As a publicly traded company, and as the Boss has promised profit in quarter 1 2013, I feel my Model S performance in gray with everything but rear seats was processed quickly and I will take deelivery by 3/23/13 so as to help the bottom line--but the car is still a great all electric car.

 

[Beckler]

Who's to say that the NYTimes review won't also have a long-lasting impact on sales, particularly in the US Northeast?

"Mission Accomplished"

Signed,
J. Broder

 

[kenliles]

Actually I'm wondering if the long lasting impact will be an increase in sales in the US Northwest, the way it turned out

 

[Zythryn]

... The current plan is to make everyone FINALIZE their order months if not years ahead of delivery essentially locking in their deposits....

This is trollish behavior. I am sorry there was an error and you were asked to finalize earlier than you should have. However, how in the world do you stretch that one error of a few months into a plan to make everyone finalize as much as years in advance?

 

[K Hall]

I can bring some cheese to this party. No red flags.

It’s all about planning and scheduling, material supply for a true Lean make to order business model. I fully support them locking orders in to weed out all of the window shoppers. Tesla has an extended supply chain to manage.

MnLevin try and find a more constructive solution for your problem of wanting a May delivery. Fix the problem not the blame.

 

[kcveins]

Zythryn, just look at the blog posts, everyone, I mean everyone is finalizing their cars, people with big reservation numbers, everyone here is finalized, doesnt that raise a red flag with you? They asked me to finalize my car in January, knowing I didnt order AAS and that it would not be produced for months. Everyone is finalizing their orders but they dont have a clue when they will produce the cars. Just something to think about.

Call me silly, but how would Tesla know that you weren't ordering AAS before you finalized? Have they changed the finalization system since December?

 

[Beavis]

Zythryn, just look at the blog posts, everyone, I mean everyone is finalizing their cars, people with big reservation numbers, everyone here is finalized, doesnt that raise a red flag with you? They asked me to finalize my car in January, knowing I didnt order AAS and that it would not be produced for months. Everyone is finalizing their orders but they dont have a clue when they will produce the cars. Just something to think about.

Oh, come on. Not everyone has finalized. They are batching production for very good reasons and it is clear that some configurations are delayed. Choosing standard suspension, red, or a smaller battery pack resulted in a delay. You'll get your car soon and you'll love it.

 

[lolachampcar]

Finalizing culls the looky loos from the herd while giving production more of a window to manage build cycles. I would open out the finalize window as well once I'd proven that I could deliver. I think it is a smart move.

 

[luvb2b]

Luv Shares a Reservation Model

i have a reservation model that i maintain. thought i would share it below. basically i take the count given as of the end of the prior quarter, add the new reservation tally from the shareholder's letter, subtract the sold units, and then back out what the cancels must have been to get the end count to match what is reported. 2012q3 and 2012q4 is actual data in the table below. everything bold/italic in q1-q4 are my estimates. i assumed a spike in q1 cancels due to the nyt article and then a steady decline in the number of cancellations.

feel free to disagree with my estimates, but know that i have tried to be prudent and conservative. basically what i see is what elon said - they should have enough with existing reservations and momentum to be essentially sold out through 2013. the real key is getting that reservations number up over 6000 by 2014. with marketing non-existent, leasing possibilities, and the impact of model s owner referral sales there are many ways to make it happen.

	Start Count	Plus New	Minus Sold	Minus Cancels	Equals End Count
2012Q3	11500	2900	250	950	13200
2012Q4	13200	6000	2400	1800	15000
2013Q1	15000	3500	5500	2200	10800
2013Q2	10800	4000	6200	1500	7100
2013Q3	7100	4500	6300	1200	4100
2013Q4	4100	5000	6300	1200	1600