Blog Tesla Deliveries Dipped in Q1

Tesla announced disappointing first-quarter delivery figures, a performance it says will negatively impact income.

Late Wednesday, Tesla said it delivered about 63,000 cars in Q1, versus analyst estimates of 76,000 deliveries. That’s down from 90,966 in the fourth quarter. Model 3 deliveries totaled 50,900, also below estimates. Tesla said it produced about 77,100 cars during the quarter.

“Because of the lower than expected delivery volumes and several pricing adjustments, we expect Q1 net income to be negatively impacted,” Tesla said in a release.

The company said complications during the rollout of the Model 3 internationally impacted its numbers.

“Due to a massive increase in deliveries in Europe and China, which at times exceeded 5x that of prior peak delivery levels, and many challenges encountered for the first time, we had only delivered half of the entire quarter’s numbers by March 21, ten days before end of quarter,” Tesla said in a release. “This caused a large number of vehicle deliveries to shift to the second quarter. At the end of the first quarter, approximately 10,600 vehicles were in transit to customers globally.”

The company noted that Model 3 was the best-selling mid-sized premium sedan in North America, selling 60% more units than the runner up. The company reaffirmed prior guidance of 360,000 to 400,000 vehicle deliveries in 2019.

“Despite pull forward of demand from Q1 2019 into Q4 2018 due to the step down in the federal tax credit, US orders for Model 3 vehicles significantly outpaced what we were able to deliver in Q1,” Tesla said.

See Tesla’s letter to investors here.

 

[gnuarm]

So Tesla deliveries are up 70% over first qtr '18 and the report is about how they've dropped over the end of year and end of full fed tax credit qtr.

If you really think you can compare Q1 of '18 to Q1 of '19 in any meaningful way, you haven't been paying attention. In Q1 of '18 they could barely build a model 3 much less in volume. The company lost some large fraction of a billion dollars and even at the end of the quarter weren't shipping enough cars per week to make a dent in the losses.

So yeah, better than Q1 of '18, hurrah!

It does point out that this company is still in startup mode while it needs to complete the transition to a mature automobile production company. Over the last 10 years it has been fueled by venture capital of one form or another, but now has to make a profit and keep the cash flow going. This quarter shows they aren't ready to do that. We'll see how they do next quarter. If not much better, it's going to be a blood bath.

 

[gnuarm]

All I know is that I took delivery of my Model 3 on March 31st, and I have never had this much fun with a car.
I am a auto-phile and I have had multiple Miatae, BMW's, and Mini Cooper S's, GTI, etc.
But This Tesla tops them all.
I am a moving ad for Tesla as people notice my car everywhere.
It is only a matter of time before I see multiple Model 3's in my neighborhood..

I take it you haven't needed repairs as yet?

 

[gnuarm]

Fewer deliveries were to be expected due to the fundamental change in logistics with the startup of sales to Europe. Sales in Europe physically could only pick up from March and represent therefore about one month of sales. Tesla registers a sale when the car is with the customer and all papers are settled. A larger proportion than in previous quarters of production will be shifted into Q2 sales (as indicated in the communication). Cars on ships and trucks cannot make sales - even if production was within guidelines.

Whilst the first ships arrived in Antwerp in February, those cars had to be trucked then across Europe - not as simple as that sounds. Suitable trucks for this sudden increase in movements had to be scratched together from all across Europe.

"Scratched together"??? They didn't see the need for this months ago??? That alone should be enough to scare anyone off this stock!

I noted trucks arriving in Switzerland registered in Lithuania and Estland. In one case I heard that one of those trucks had missed registering at customs on the border due to unfamiliarity with procedures. Those cars could not be delivered shortly anymore. Unpredictable arrival times and consequent erratic customs paper flows made delivery organisation very difficult. Remarkable was the mostly nearly perfect condition of the cars delivered - even as staff had hardly any time to check them as thoroughly as customary.

Yet another problem that mature auto makers seem to have conquered. So more startup problems, eh?

The complete ignorance and lack of understanding of such simple facts, particularly in the financial press, is amazing.

Lol! Considering such basic problems to be standard operating procedures is amazing. A company that can't even plan deliveries months in advance can't possibly do much better when it comes to manufacturing, can they?

 

[gnuarm]

I think the change in S and X sales is due to cannibalization from the 3 and anticipation of the Y, and the pull forward of the rush to get the last $7,500 tax credits in the US.

A lot of people bought the S and X because they wanted a Tesla sedan or CUV and those were the only choices. Now the 3 is out, and one can get a Performance for less than a base S. And if you wanted a CUV now maybe waiting 1.5 years for the Y is a viable alternative. For many buyers, the Y is a better option than an X. First, it does not cost a ton of money. Second, it is smaller so fits better in many locales. third, it is likely to be more efficient and cheaper to operate.

I just hope Tesla will not suffer from the "Osborne effect" with large number of buyers holding off until the release of the Y. Sales of the 3 other models (S,X,3) could be impacted by this.

I don't think appreciable numbers of buyers are waiting for the Y. That will be nearly two years. I think plenty of people aren't so eager to be "early adopters" of EV technology. With the advanced reservation Tesla got a huge percentage of the eager beavers to buy model 3s. Now the market will mostly be more conservative buyers who want to see how the 3s play out. If they can sustain model 3 sales and keep the company afloat until the Y comes out, it will give them a lot more street creds.

The down side to playing the waiting game is that by then nearly all the major players will have competing products out and the big differentiator will be the charging network. I believe Tesla needs to keep growing the charging infrastructure to stay ahead of both the competition and themselves. If they allow charging to become a limiting factor for Tesla cars, it will sink them without worrying about the competition. If they keep up expansion of the network and prevent widespread charging anxiety they will have a chance against the mongol hordes with the more limited CCS/Chademo charging... at least for a few more years.

In five years the other charging networks will have caught up to demand and with many more competing models for buyers to choose from Tesla will have a real fight on it's hands.

 

[Leafdriver333]

I take it you haven't needed repairs as yet?

No repairs needed.
The car has been prenominal.

 

[Alfred]

Yet another problem that mature auto makers seem to have conquered. So more startup problems, eh?

Well - mature automakers have currently no large sales or delivery increases to deal with. Their sales are steady or declining. Their problems with starting electric vehicles production are as yet elsewhere. See e.g. what Audi is currently struggling with. (No engines, no batteries).

 

[Cloxxki]

Planning of sea shipments has a big impact on cash flow and profits.
Say, they only sent one boat load too many to Europe to get any cars delivered before March 31st. They'll get sold eventually, but it will look bad in the quarterly earnings and even yearly if they keep doing it.
Seems they sent more Performance cars than the market really needed, or at least some markets, as there are reports of one-week delivery times for European non-reservation-holders. They sent multiple ships, planning is tight to do <3 months even for the first load built in January to be delivered deep in Europa before end of Q1. Let alone later ships.

Now that they're supposedly limited with cell production, will there be an incentive to sell more SR+, or more LR? Perhaps time for SR+ Dual Motor even.

 

[gnuarm]

Well - mature automakers have currently no large sales or delivery increases to deal with. Their sales are steady or declining. Their problems with starting electric vehicles production are as yet elsewhere. See e.g. what Audi is currently struggling with. (No engines, no batteries).

A little hard to read since I'm not German. But regardless, I find it amusing when Tesla is compared to the big iron companies. Do you really think they are going to have anywhere near the issues Tesla did in ramping up production? They state the wait list for the e-tron is up to seven months but it's not clear if that is because of delays or increased demand.

The big difference is that Audi can delay production by months or even a year and there will still be an Audi.

 

[gnuarm]

Planning of sea shipments has a big impact on cash flow and profits.
Say, they only sent one boat load too many to Europe to get any cars delivered before March 31st. They'll get sold eventually, but it will look bad in the quarterly earnings and even yearly if they keep doing it.
Seems they sent more Performance cars than the market really needed, or at least some markets, as there are reports of one-week delivery times for European non-reservation-holders. They sent multiple ships, planning is tight to do <3 months even for the first load built in January to be delivered deep in Europa before end of Q1. Let alone later ships.

Now that they're supposedly limited with cell production, will there be an incentive to sell more SR+, or more LR? Perhaps time for SR+ Dual Motor even.

Musk has said car production is limited by battery production. That's not the same thing as sales being limited by battery production.

 

[Cloxxki]

Musk has said car production is limited by battery production. That's not the same thing as sales being limited by battery production.

Not the same, but you can't sell more than you produce for long or by meaningful margins. It relies on stock of ready goods, effectively.
Also, we need to specify it's Model 3 only. Model S/X are also cars, their demand was recently halved, having to do nothing with battery production capacity and not helping Model 3 at all.

Back in 2016/2017, how much 2170 production would Tesla have been calculating with by today?
Model 3 500.000 x 60 kWh average = 30 GWh (and hat should be conservative)
Model S/X 100.000 x 100 kWh = 10 GWh (without any production expansion from 2017-18)
Energy.... 5 GWh? Or 10?

Reality is 24 GWh. Odd, for an external factor that seems so well suited to scaling. Even if one line produces less than it was expected to back in 2016/17. There was time to adjust. Years.

 

[jboy210]

A little hard to read since I'm not German. But regardless, I find it amusing when Tesla is compared to the big iron companies. Do you really think they are going to have anywhere near the issues Tesla did in ramping up production? They state the wait list for the e-tron is up to seven months but it's not clear if that is because of delays or increased demand.

The big difference is that Audi can delay production by months or even a year and there will still be an Audi.

Audi just cut the number of e-Tron they will produce by over 10,000 units (down to 42,000). They also delayed their next generation car. They are having supply constraints in batteries (LG) and other key components.

Audi, and delays of the Kia and Hyundai EVs, due to battery supplies shows why car manufacturers need to be smart about setting up supply lines for primary component that makes the car work.

Telsa does not have these issue because they were forced to take a more bottoms up approach and built Gigiafactory 1 as a battery pack supplier.

 

[Cloxxki]

Audi just cut the number of e-Tron they will produce by over 10,000 units (down to 42,000). They also delayed their next generation car. They are having supply constraints in batteries (LG) and other key components.

Audi, and delays of the Kia and Hyundai EVs, due to battery supplies shows why car manufacturers need to be smart about setting up supply lines for primary component that makes the car work.

Telsa does not have these issue because they were forced to take a more bottoms up approach and built Gigiafactory 1 as a battery pack supplier.

Well, that's not entirely correct. Despite well documented delays, now nearly 2 years into Model 3 production, again they are cell production limited while just halfway the production rate penned for this time. 24 GWh output is what Elon claims Panasonic is on at GF1. They were surely scheduled to be at 40 GWh by now. More energy products built, S and X also on 2170s.
So securing your own production doesn't cut it, unless you do it well and perhaps ideally over-produce to become a cell supplier to others in case car demand is lower than you have cell production for. Imagine GF1 could make 50 GWh now, how nice a profit such surplus cells would bring, such a reputed product?

Seems to me, if you are committed to make a certain number of cars, secure supply well beyond that number and open channels to sell of any surpluses. Make your own to not have zero. Other from others to potentially have surplus.
One cannot sell shortage in cells. Ask Elon.

 

[jboy210]

Well, that's not entirely correct. Despite well documented delays, now nearly 2 years into Model 3 production, again they are cell production limited while just halfway the production rate penned for this time. 24 GWh output is what Elon claims Panasonic is on at GF1. They were surely scheduled to be at 40 GWh by now. More energy products built, S and X also on 2170s.
So securing your own production doesn't cut it, unless you do it well and perhaps ideally over-produce to become a cell supplier to others in case car demand is lower than you have cell production for. Imagine GF1 could make 50 GWh now, how nice a profit such surplus cells would bring, such a reputed product?

Seems to me, if you are committed to make a certain number of cars, secure supply well beyond that number and open channels to sell of any surpluses. Make your own to not have zero. Other from others to potentially have surplus.
One cannot sell shortage in cells. Ask Elon.

I don't believe Tesla is battery supply constrained. The demand for their cars has fallen.

Cars are piling up in various lots throughout the Bay Area, especially around various parts of I-880. Last year the delivery delays where months, now they are days and weeks.

As a Tesla owner I would like to believe Elon, but he seems more about the hype than about the facts

 

[Cloxxki]

I don't believe Tesla is battery supply constrained. The demand for their cars has fallen.

Cars are piling up in various lots throughout the Bay Area, especially around various parts of I-880. Last year the delivery delays where months, now they are days and weeks.

As a Tesla owner I would like to believe Elon, but he seems more about the hype than about the facts

If Elon were to be lying, not even looking for more intricate truths underpinning it, wouldn't Panasonic have a say deeply compromising Elon's reliability posting numbers even more, amidst a painful court case? I don't want to believe he's THAT clumsy. If he is lying here, he should not be CEO of even a lemonade stand.

 

[jboy210]

If Elon were to be lying, not even looking for more intricate truths underpinning it, wouldn't Panasonic have a say deeply compromising Elon's reliability posting numbers even more, amidst a painful court case? I don't want to believe he's THAT clumsy. If he is lying here, he should not be CEO of even a lemonade stand.

Given the climate in the US, hyperbole and lying do not seem to be too big a deal to the public any more

 

[gnuarm]

Well, that's not entirely correct. Despite well documented delays, now nearly 2 years into Model 3 production, again they are cell production limited while just halfway the production rate penned for this time. 24 GWh output is what Elon claims Panasonic is on at GF1. They were surely scheduled to be at 40 GWh by now.

24 GWh is over 240,000 model 3s. I don't think this is a bad match for what they are planning to deliver this year.

I don't know how you know what they scheduled.

More energy products built, S and X also on 2170s.

S and X are not yet built with 2170 size cells. There is talk of this being done as part of a refresh, but no official word that I've heard.

So securing your own production doesn't cut it, unless you do it well and perhaps ideally over-produce to become a cell supplier to others in case car demand is lower than you have cell production for. Imagine GF1 could make 50 GWh now, how nice a profit such surplus cells would bring, such a reputed product?

Sold to whom? To my knowledge they are not supplying any other car makers. Why squander precious capital selling your tech to others when you can use it to build your brand?

Seems to me, if you are committed to make a certain number of cars, secure supply well beyond that number and open channels to sell of any surpluses. Make your own to not have zero. Other from others to potentially have surplus.
One cannot sell shortage in cells. Ask Elon.

"Securing supply" will mean investing capital. The reason why they have Panasonic at Gigafactory 1 is to be a partner who invests their capital.

BTW, I read this at Clean Technica, "Panasonic said it reached 35 GWh/yr capacity in March. That's already enough to build over 500k Model 3/yr+Powerwalls—more than Tesla can handle"

So it seems the battery manufacturing capacity is not as reported elsewhere. Or maybe the limitation is building the packs, not the cells.

 

[gnuarm]

If Elon were to be lying, not even looking for more intricate truths underpinning it, wouldn't Panasonic have a say deeply compromising Elon's reliability posting numbers even more, amidst a painful court case? I don't want to believe he's THAT clumsy. If he is lying here, he should not be CEO of even a lemonade stand.

You mean like this, "Panasonic said it reached 35 GWh/yr capacity in March. That's already enough to build over 500k Model 3/yr+Powerwalls—more than Tesla can handle"

Clean Technica

So who is lying?

 

[Cloxxki]

24 GWh is over 240,000 model 3s. I don't think this is a bad match for what they are planning to deliver this year.

I don't know how you know what they scheduled.




S and X are not yet built with 2170 size cells. There is talk of this being done as part of a refresh, but no official word that I've heard.




Sold to whom? To my knowledge they are not supplying any other car makers. Why squander precious capital selling your tech to others when you can use it to build your brand?




"Securing supply" will mean investing capital. The reason why they have Panasonic at Gigafactory 1 is to be a partner who invests their capital.

BTW, I read this at Clean Technica, "Panasonic said it reached 35 GWh/yr capacity in March. That's already enough to build over 500k Model 3/yr+Powerwalls—more than Tesla can handle"

So it seems the battery manufacturing capacity is not as reported elsewhere. Or maybe the limitation is building the packs, not the cells.

It's a lot of work responding to all aspects of a post if you begin by misreading the whole thing, isn't it?

 

[Panzer82]

Model 3 Q1 Sales in Europe look good. Interesting video on Norway, Netherlands and Switzerland