Blog Tesla is Building Car Carriers to Keep Up With Model 3 Deliveries

Tesla is in a sprint to deliver as many cars as possible ahead of the end of the third quarter. Chief Executive Elon Musk has called it “delivery logistics hell.”

In fact, Tesla is delivering so many cars that it’s having trouble finding car carriers. So, the company has started manufacturing their own trailers. Musk shared that tidbit in a tweet today.

https://twitter.com/x/status/1044294753041313792

Tesla has struggled with production bottlenecks since the Model 3 sedan was introduced, but is now reportedly churning out around 4,000 of those cars every week. The ramp in production is now creating a bottleneck in delivery.

TMC members and Tesla watchers have observed large lots packed with Model 3s, as well as trucks pulling full loads of Model 3s en route to new owners. Tesla is aiming to produce around 50,000 Model 3s in the third quarter.

Musk did not provide more details about the car carriers built by Tesla, but it’s interesting to see the company work out a solution when it’s up against a tough challenge. Musk has also tried to remove some pressure from Tesla’s delivery team by inviting existing Tesla owners to help “educate” new owners taking delivery.

Has anyone spotted a Tesla-built car carrier?

 

[jboy210]

One thing I hate is by law destination charges are fixed nationwide. They charge you the same to pickup a car at the Fremont delivery center as it does in Maine or Florida. I know because I paid about $1000 to have them move my car 2 miles to the Fremont delivery center. So I subsidized the delivery cost for drivers on the East Coast.

 

[mattjs33]

That's why Tesla is changing the way they deliver cars. When they hit a roadblock, they figure out a way around it. If the best solution for Tesla is to make their own car haulers or to deliver cars directly to customers locations, then they will do it that way. Just because Ford's system is to make 100,000 F-150s just to have them sitting in inventory, it does not mean that it will be the best solution for Tesla.

100,000 F150's is about an 80 day supply, so that would almost be perfect. That way if production is interrupted for any reason at all (plant changeovers, supplier shortage [like happened this summer], earthquake or whatever), they still have trucks to sell. Whether or not it might be the best solution for Tesla, we are diametrically opposed on, and not likely to ever agree. They made their bed already.

If people are lined up to buy your hot dogs before your cooker is even warmed up, how are you going to get ahead? Make them wait longer? What if there are more people than dogs?

If you had any doubts about your ability to deliver the hot dogs that day, you would say, "You know, maybe we'll wait until tomorrow's game." Better that than to piss off a bunch of customers.

This goes back to another argument I have made elsewhere; Tesla would have been much better off waiting until 2018 to release the Model 3, when the volume output of the line would have been up and running. They already had the preorders. If they had run the usual course of automobile production there would have been a whole batch of cars built to assess the factory processes in the first place. They did all this on the fly. They did it, as has been successfully argued, because they needed the money. Quite simply, Tesla is underfunded for this level of growth. Especially since they're trying to build and finance and entire supply chain which no one else does, and it's staggeringly expensive.

I do not believe for a second that they are building their own trucks to ship cars.

 

[mos6507]

Then you might as well leave this forum entirely? Most threads are more than one page of responses. It's called conversation, what's wrong with it?

Most Tesla fanbois prefer an echo-chamber to conversation.

The way this thread is going, fanbois are doing ever more difficult mental backflips to defend the notion that Tesla is only suffering from everyday growing pains rather than mismanagement. It just doesn't fit the longstanding fable of Elon's superhuman CEO skills to concede to mismanagement but the datapoints are all starting to support the case.

 

[jelloslug]

Most Tesla fanbois prefer an echo-chamber to conversation.

The way this thread is going, fanbois are doing ever more difficult mental backflips to defend the notion that Tesla is only suffering from everyday growing pains rather than mismanagement. It just doesn't fit the longstanding fable of Elon's superhuman CEO skills to concede to mismanagement but the datapoints are all starting to support the case.

So back your statement up with facts.

 

[mos6507]

So back your statement up with facts.

I'm not going to spoon-feed you. Read back in the thread without your rose-colored glasses.

Also make note of the executive exodus over the last year or so. It's devolving rapidly into a hollow organization with Elon like Atlas trying to hold the whole thing together which is commonplace when internal morale deteriorates and mid to upper management leaves for greener pastures. It's a "desertion of the generals" situation like at the end of a war. The buck stops with Musk.

 

[jelloslug]

I'm not going to spoon-feed you. Read back in the thread without your rose-colored glasses.

Also make note of the executive exodus over the last year or so. It's devolving rapidly into a hollow organization with Elon like Atlas trying to hold the whole thing together which is commonplace when internal morale deteriorates and mid to upper management leaves for greener pastures. It's a "desertion of the generals" situation like at the end of a war. The buck stops with Musk.

And yet they are still moving a record number of cars and leaving everyone else in the dust. Even FUD analyst has been predicting Tesla's imminent failure for the better part of a decade now and yet they are still moving forward.

 

[Knightshade]

And yet they are still moving a record number of cars and leaving everyone else in the dust.

Again, they really aren't.

They're moving a record number of vehicles for themselves because they're such a tiny company. It's easy to have 120% growth when you start with a small number.

They're moving a laughably small number of vehicles compared to the big legacy car companies though. The largest auto groups sell 10 million plus cars a year worldwide.

Tesla is HOPING to deliver maybe 2% of that.

And they're having tremendous problems even managing that- with tons of reports on here of canceled and delayed deliveries, logistical screw-ups, utter lack of transparency and communication with customers, etc...


Pointing out they have serious, fundamental, competence problems in supply chain and fulfilment logistics is just pointing out reality, not FUD.

there's no doubt, at all, they're having major issues with these things. Elon himself openly admits it- saying they've moved from production hell to delivery hell.

This one is self inflicted though- it's not like they didn't know they'd have 5-10x more cars to delivery once production ramped up.

 

[mongo]

They're moving a laughably small number of vehicles compared to the big legacy car companies though. The largest auto groups sell 10 million plus cars a year worldwide.

Looking at the micro level:
Toyota moved 223,000 cars in the US in December with 1,500 dealerships. ~150 cars per dealership over a month. Tesla has ~75, but call it 100. At 50k 3s in a quarter, that is 167 per location per month, more than Toyota ignoring S/X. Actual rate is higher since production is ramping up, so more during the end of quarter. Some reports of 100+ in week or even a day...

With 80 locations and 15k S/X a quarter, deliveries per location are 271 a month, almost double Toyota's average.
I'd call that impressive.

 

[mattjs33]

Looking at the micro level:
Toyota moved 223,000 cars in the US in December with 1,500 dealerships. ~150 cars per dealership over a month. Tesla has ~75, but call it 100. At 50k 3s in a quarter, that is 167 per location per month, more than Toyota ignoring S/X. Actual rate is higher since production is ramping up, so more during the end of quarter. Some reports of 100+ in week or even a day...

With 80 locations and 15k S/X a quarter, deliveries per location are 271 a month, almost double Toyota's average.
I'd call that impressive.

Considering Tesla originally planned to deliver 100,000 - 200,000 cars in 2018, what you call impressive, I would call a galactical lack of planning. How exactly did Tesla think they were going to deliver that many cars a year through 75 dealers, without having the problems they're currently having?

This delivery problem will not get better anytime soon, in fact it will get worse, until more dealerships are built. That doesn't seem to be in the plans, so better get used to this, folks.

 

[Knightshade]

Looking at the micro level:
Toyota moved 223,000 cars in the US in December with 1,500 dealerships. ~150 cars per dealership over a month. Tesla has ~75, but call it 100. At 50k 3s in a quarter, that is 167 per location per month, more than Toyota ignoring S/X. Actual rate is higher since production is ramping up, so more during the end of quarter. Some reports of 100+ in week or even a day...

With 80 locations and 15k S/X a quarter, deliveries per location are 271 a month, almost double Toyota's average.
I'd call that impressive.

And given how many folks aren't getting their cars in a timely fashion due to how backed up the tesla locations are and the inability of tesla to actually get cars TO delivery I'd say it's an impressive example of why Tesla should've known they needed to add a lot more delivery centers, space, and staffing 6 months ago to avoid the delivery hell they're in now.

So the only thing impressive there is how bad the planning has been for the ramp up to actually be able to deliver the cars.

Now consider they're intending to double the amount they produce AGAIN, when they already can't deliver all the ones they're making now.

 

[mongo]

Considering Tesla originally planned to deliver 100,000 - 200,000 cars in 2018, what you call impressive, I would call a galactical lack of planning. How exactly did Tesla think they were going to deliver that many cars a year through 75 dealers, without having the problems they're currently having?

This delivery problem will not get better anytime soon, in fact it will get worse, until more dealerships are built. That doesn't seem to be in the plans, so better get used to this, folks.

As bad as it will be in the short term, I would not be opposed to Tesla taking the Nintendo approach. When the Wii came out, there was a huge backlog of orders, but they didn't size manufacturing for the initial surge. If Tesla sized for the initial surge/ backlog, they would be over sized later when the domestic demand slows and they are shipping overseas/ internationally (and while waiting for the factory to catch up).

Once cash flow is positive and Tesla has profits, they will be able to expand debt free. Super pessimistic view is that they are waiting for other OEM's dealerships to go out of business and take over their properties cheap...

And given how many folks aren't getting their cars in a timely fashion due to how backed up the tesla locations are and the inability of tesla to actually get cars TO delivery I'd say it's an impressive example of why Tesla should've known they needed to add a lot more delivery centers, space, and staffing 6 months ago to avoid the delivery hell they're in now.

So the only thing impressive there is how bad the planning has been for the ramp up to actually be able to deliver the cars.

Now consider they're intending to double the amount they produce AGAIN, when they already can't deliver all the ones they're making now.

Come now, pushing 2-10x the average number of cars through a location is impressive (if painful).

Taking a non-customer centric view, Tesla is acting in Tesla's best short term interests by getting full utilization out of the resources they have. Selling cars to whomever is ready and closest is a money maker. Does it suck for people waiting for their cars? Of course it does. Compare to airline industry routinely overbooking flights to maintain utilization.

 

[Knightshade]

As bad as it will be in the short term, I would not be opposed to Tesla taking the Nintendo approach. When the Wii came out, there was a huge backlog of orders, but they didn't size manufacturing for the initial surge. If Tesla sized for the initial surge/ backlog, they would be over sized later when the domestic demand slows and they are shipping overseas/ internationally (and while waiting for the factory to catch up).

That analogy kind of sucks though.

After the 3 surge dies down there's gonna be a Y surge. And then a pickup surge.

Total sales, or so their intent claims, will be going up a lot year after year.

That's simply impossible with the current delivery infrastructure.

Its already glaringly insufficient- double production (the 3 target) and it'll be even moreso. Add more popular-vehicle-class models and it gets even worse.

(and that's ignoring Nintendo was largely using OTHER peoples shipping and distribution channels, while Tesla has been trying to do all of it in-house without doing much to scale it up for production volumes)

Come now, pushing 2-10x the average number of cars through a location is impressive (if painful).

impressively bad planning sure.

impressive as an accomplishment? not really.

I'm not impressed their lack of logistical know-how has made it so only a significant % of their customers are delayed and upset instead of ALL of them being delayed and upset.

Know what would be impressive? not having huge logistical failures and delays all across their supply and fulfillment chains.

Taking a non-customer centric view, Tesla is acting in Tesla's best short term interests by getting full utilization out of the resources they have. Selling cars to whomever is ready and closest is a money maker. Does it suck for people waiting for their cars? Of course it does.

It also sucks for a company that's still a major underdog and doesn't advertise to piss off the primary ambassadors of their product.

Which is what we see happening.

Compare to airline industry routinely overbooking flights to maintain utilization.

Again, a poor analogy...


The worst airlines for overbooking are still only bumping an incredibly tiny percent of passengers-on the order of 10 passengers compensated for bumping out of every 10,000 passengers- a net overbook of 0.1%...and that's high compared to most carriers.

This would be more like one new airline trying to become a major player and then overbooking by 20-30% instead of 0.1%....and then being shocked when there's bad word of mouth about it happening.

 

[mattjs33]

Super pessimistic view is that they are waiting for other OEM's dealerships to go out of business and take over their properties cheap...

You're implying because Tesla is going to force the other OEMs out of business? Come on man.

Even if Tesla manages to ship 500K Model 3 a year (doubtful, because sedans aren't hot right now), you're still talking about HALF the annual output of the F150 ALONE, just one model among 30+ major brands sold in just the US, by about a dozen major OEM groups. It's a 17 million unit a year industry, just in the US.

Mitsubishi is probably the closest to closing up shop in the US, and even they are rising now thanks to Nissan.

Tesla is a success story, but let's get real here.

 

[bro1999]

And yet they are still moving a record number of cars and leaving everyone else in the dust. Even FUD analyst has been predicting Tesla's imminent failure for the better part of a decade now and yet they are still moving forward.

And leaving customers that were expecting cars delivered this month in the dust as well, as Tesla decided to maximize deliveries and take divert cars going to some customers to closer locations that could be delivered this month. But what's a few pissed off customers that'll still eventually take delivery compared to juicing delivery numbers at all costs.

 

[mongo]

You're implying because Tesla is going to force the other OEMs out of business? Come on man.

Even if Tesla manages to ship 500K Model 3 a year (doubtful, because sedans aren't hot right now), you're still talking about HALF the annual output of the F150 ALONE, just one model among 30+ major brands sold in just the US, by about a dozen major OEM groups. It's a 17 million unit a year industry, just in the US.

Mitsubishi is probably the closest to closing up shop in the US, and even they are rising now thanks to Nissan.

Tesla is a success story, but let's get real here.

I said it was pessimistic because it implies OEMs (or at least some dealerships) closed down/ merged, which would suck for Michigan and the auto supply base. I don't want that, but the volume Tesla sells has to come, in part, from some other dealers.
I didn't say Ford, it could be some diesel based import brand. Consider the the margin on vehicles and the fact that it is the final vehicles produced that generate the profit. Dropping production 5% does not move fixed costs, so the bottom line hit is more than 5%.
Conversely, Tesla is increasing production, so fixed costs are spread over more cars...

 

[mongo]

Genuine question: How many cars do you think a center could comfortably handle given sufficient staffing?

If each delivery averages 30 minutes, and requires a service rep continually, running 4 groups in parallel gives 8 cars an hour. Stay open from 8-6, that's 10 hours, open 6 days a week: 480 cars a week, ~2k a month. If Tesla has 75 centers, that's 150k a month. Way more than production.

Running backwards:
10k a week of 3 + 2k of S/X (Assume all domestic), 12k a week, 75 centers = 160 cars per center per week. 6 days a week = 27 cars a day, open 10 hours, 3 cars an hour, or a car every 20 minutes. Rotate with 3 reps, that allows an hour per delivery.

Based on that, they should theoretically be able to handle the current production rate. So what is going wrong?
Couple ideas: people want to get their cars on weekends or after work which spikes the demand. Also, geographic distribution is makes it lumpy.

The home/work delivery could allow for a more average rate of delivery by spreading things out time wise...

 

[TheLocNar]

They can build trailers but not badges and spoilers for the Performance 3s.

 

[Daniel in SD]

https://jalopnik.com/auto-haulers-dont-know-anything-about-elon-musks-claime-1829329912

 

[NiallDarwin]

but nope, no way to have known!

Ah man, I fell off my seat laughing at that!

 

[NiallDarwin]

https://jalopnik.com/auto-haulers-dont-know-anything-about-elon-musks-claime-1829329912

Linked from there are some trucks for sale in Cali:

2002 Freightliner Century 120 Car Carrier, Los Angeles CA - - CommercialTruckTrader.com

Let's buy a few and start hauling for Tesla based on Uber's rush pricing structure. We'll be rich I tell you, filthy rich!!