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

[Glamisduner]

Tesla is Jumping the Shark on Deliveries.

 

[Knightshade]

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.

Except none of that is happening.

For one- Tesla can't even manage to get enough cars to the DCs.

And thanks to that post by Daniel in SD we now have factual confirmation I was right that Tesla is lying when they blame it on a shortage of truck car carriers, a shortage that doesn't exist.

For another- many of those DCs lack the physical room to deliver even a fraction of the cars your math assumes...because Tesla picked tiny locations with barely enough space to handle S/X volumes....and then did nothing at all to upsize for handling 3 volumes.

So there's 2 major logistics failures before we even get to staffing at the DCs.

Ditto the SCs (which are sometimes, but not always, the same place) that need to fix any issues with cars they notice prior to customer delivery- and also need to fix any the customer finds at or right after delivery... those too were primarily sized and staffed for S/X volume, with little to no upscaling so far to handle 3 volume.

 

[mongo]

Except none of that is happening.

For one- Tesla can't even manage to get enough cars to the DCs.

And thanks to that post by Daniel in SD we now have factual confirmation I was right that Tesla is lying when they blame it on a shortage of truck car carriers, a shortage that doesn't exist.

For another- many of those DCs lack the physical room to deliver even a fraction of the cars your math assumes...because Tesla picked tiny locations with barely enough space to handle S/X volumes....and then did nothing at all to upsize for handling 3 volumes.

So there's 2 major logistics failures before we even get to staffing at the DCs.

Ditto the SCs (which are sometimes, but not always, the same place) that need to fix any issues with cars they notice prior to customer delivery- and also need to fix any the customer finds at or right after delivery... those too were primarily sized and staffed for S/X volume, with little to no upscaling so far to handle 3 volume.

It's a theoretical question. I didn't say it was happening. And I said "given sufficient staffing". Which city has the smallest lot?
8 cars an hour is one carrier worth, 32 cars worth of room would allow 8 unloading, 8 being sold, and 16 being prepped.

If Tesla can't get carriers lined up for whatever reason, that is a shortage for them, not a lie.
From the article:

Young did have a possible explanation about what may be going on with Tesla. Essentially, Young suggested that the issues may not be about an actual shortage of auto haulers, but a lack of planning on Tesla’s part.

It’s possible, Young speculated, that Tesla had not taken the time to establish their relationships with auto haulers early enough, and are now finding themselves in a position where they’re unable to get car carriers to meet their desired timetables.

 

[Knightshade]

It's a theoretical question. I didn't say it was happening. And I said "given sufficient staffing". Which city has the smallest lot?
8 cars an hour is one carrier worth, 32 cars worth of room would allow 8 unloading, 8 being sold, and 16 being prepped.

I can't speak for a ton of cities. I can tell you Raleigh was originally shut down from doing deliveries at all because they couldn't park more than one carrier worth there.

I think I mentioned this earlier?

Tesla has them in a tiny strip business park building. This isn't new- they've been there for years.

With S/X volume it was fine. With the 3? a nightmare.

Their original plan was they just parked them on the street, up and down the street, dozens of em, with no plates.

The cops were called by other businesses and they had to abandon that....err.. plan...

So next they rented the parking lot of a gym that went out of business maybe 10 minutes away to "hold" dozens of extra cars. There was a whole thread of a guy who kept posting pics of it.

After a month or two the owner of the property sold it so they lost that.

After that they shipped all their extra cars to Charlotte (3 hours away) since they had no room for them- and not long after that stopped doing in person delivery at all, switching to home delivery.

Not because it's "better" but because of horrific lack of planning by Tesla.

(this week they're apparently back to doing a very few deliveries just to try and make numbers, but they're still incredibly constrained in doing them).

And if you read the other threads this is happening in many other places too to one degree or another.

If Tesla can't get carriers lined up for whatever reason, that is a shortage for them, not a lie.
From the article:
Young did have a possible explanation about what may be going on with Tesla. Essentially, Young suggested that the issues may not be about an actual shortage of auto haulers, but a lack of planning on Tesla’s part.

It’s possible, Young speculated, that Tesla had not taken the time to establish their relationships with auto haulers early enough, and are now finding themselves in a position where they’re unable to get car carriers to meet their desired timetables

What musk actually said:

running into an extreme shortage of car carrier trailers.

What the car carrier industry said and what you yourself quote them saying

There is no such shortage of trailers.

If Tesla lacks trailers it's a failure of planning on their part.


In fact- the industry expert appears to be citing exactly the same failure I suggested was the case earlier in the thread.

That Tesla didn't bother to set any of this up in advance like they absolutely knew they would need to to handle their own production numbers

 

[rdunniii]

They're not. More cars used to be transported by train than are now; there are a lot of autoracks around. Unfortunately, Tesla thoughtlessly ripped up their on-site train loading facilities (because Musk has a serious blind spot about trains), so they're limited in ability to load trains by their ability to truck cars to the Richmond CA railyard.

That said, overall train movement capacity is limited by several national chokepoints, particularly in Chicago.

Now THAT was dumb. Much less chance of damage in transit if they are directly loaded on to fully enclosed auto racks at the factory rather than being transported thru the Bay Area to Richmond on open transporters. I'm a little surprised at least one of them has not been shot up passing thru Oakland on 880.

I'd bet there are still hundreds of auto racks stored in Milpitas just a few miles from that loading facility. If not, they are being used to transport new model year imports about the country from the ship to rail loading facility in Benicia.

 

[mongo]

I can't speak for a ton of cities. I can tell you Raleigh was originally shut down from doing deliveries at all because they couldn't park more than one carrier worth there.

I think I mentioned this earlier?

Tesla has them in a tiny strip business park building. This isn't new- they've been there for years.

With S/X volume it was fine. With the 3? a nightmare.

Their original plan was they just parked them on the street, up and down the street, dozens of em, with no plates.

The cops were called by other businesses and they had to abandon that....err.. plan...

So next they rented the parking lot of a gym that went out of business maybe 10 minutes away to "hold" dozens of extra cars. There was a whole thread of a guy who kept posting pics of it.

After a month or two the owner of the property sold it so they lost that.

After that they shipped all their extra cars to Charlotte (3 hours away) since they had no room for them- and not long after that stopped doing in person delivery at all, switching to home delivery.

Not because it's "better" but because of horrific lack of planning by Tesla.

(this week they're apparently back to doing a very few deliveries just to try and make numbers, but they're still incredibly constrained in doing them).

And if you read the other threads this is happening in many other places too to one degree or another.

Thanks for the background, yeah that is not a good setup.

What the car carrier industry said and what you yourself quote them saying

There is no such shortage of trailers.

If Tesla lacks trailers it's a failure of planning on their part.


In fact- the industry expert appears to be citing exactly the same failure I suggested was the case earlier in the thread.

That Tesla didn't bother to set any of this up in advance like they absolutely knew they would need to to handle their own production numbers

Right, I was talking issue with you saying Tesla was lying about a shortage. If Tesla is experiencing a shortage, even due to their own failures, that is still a shortage to them. Also, there can be national surplus, but a local shortage, whether the interviewees would know that level granularity is unknown.

 

[Knightshade]

Right, I was talking issue with you saying Tesla was lying about a shortage. If Tesla is experiencing a shortage, even due to their own failures, that is still a shortage to them.

I mean.. that's like saying "Our children are staving because of the terrible food shortages! We are going to plant our own gardens going forward!"

and you really mean "I was too lazy to buy any food at the many fully stocked grocery stores easily available to me"

If you wanna pretend that's not dishonest that's your call I guess.

Also, there can be national surplus, but a local shortage, whether the interviewees would know that level granularity is unknown.

One of the interviewees was the Executive Director of the Automobile Carriers Conference, a part of the American Trucking Association... and General Manager of the Auto Haulers Association of America.


Both stated they weren't aware of any shortage of any kind- other than the kind that might come from a failure to plan on the part of Tesla, rather than any actual shortage in the industry.

 

[mongo]

I mean.. that's like saying "Our children are staving because of the terrible food shortages! We are going to plant our own gardens going forward!"

and you really mean "I was too lazy to buy any food at the many fully stocked grocery stores easily available to me"

If you wanna pretend that's not dishonest that's your call I guess.

Oh come on now, we both know that grocery stores have some type of food available.
Now, if you go out the night before Christmas and can't get a tree/ turkey/ cranberries, there is a (local) shortage (and it's your fault).

One of the interviewees was the Executive Director of the Automobile Carriers Conference, a part of the American Trucking Association... and General Manager of the Auto Haulers Association of America.


Both stated they weren't aware of any shortage of any kind- other than the kind that might come from a failure to plan on the part of Tesla, rather than any actual shortage in the industry.

I realize I'm getting off track here, but depending on the exact question asked, the answer can be biased...
Right, do they keep up to date on utilization in each sub-region, or the nation as a whole? Again, not saying it isn't Tesla's fault, but would the head of the UAW/ president of Ford know that my local dealers have no Sports in stock? There is not shortage (macro), but I can't go get one (micro). There can also not be a shortage (excess capacity in general), but it is not in the location or timing needed.

 

[scaesare]

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.

Actually, this sort of situation isn't uncommon in a tech company in this high-growth phase of their life.

It's folks expecting a "typical model" found in more mundane industries that often can't get their head wrapped around it. Chaotic at times: Yes. But it's not uncommon for such companies to leapfrog existing technologies and companies by multiple generations, or obsolete their competition altogether.

 

[scaesare]

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.
.

You are comparing apples to carburetors.

Tesla has all of three models and is selling one of them in North America only and the other 2 are also in limited geographic distribution.

Comparing the models/areas where they directly compete, the story is very different than you make it out to be.

 

[scaesare]

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.

Option A: Make sure everything is lined up, I's are dotted, and T's crossed, and commence an orderly rollout in 3 years.

Option B: Push as fast as you can and hit bottle-neck after bottle-neck along the way, plow through those barriers, but begin deliveries in a year.


There are merits to either... but if the party doing the latter is willing to continue to push aggressively the results can be dramatic.

 

[mattjs33]

Option A: Make sure everything is lined up, I's are dotted, and T's crossed, and commence an orderly rollout in 3 years.

Option B: Push as fast as you can and hit bottle-neck after bottle-neck along the way, plow through those barriers, but begin deliveries in a year.


There are merits to either... but if the part doing the latter is willing to continue to push aggressively the results can be dramatic.

Oh the results can be dramatic. Only one of those choices results in inconsistent customer service. Something folks talk about, and remember down the road. Tesla can be successful, but Option B isn't really doing them any favors.

 

[scaesare]

Oh the results can be dramatic. Only one of those choices results in inconsistent customer service. Something folks talk about, and remember down the road. Tesla can be successful, but Option B isn't really doing them any favors.

You'd be surprised.

There's a large degree of folks willing to be early adopters and get in on the ground floor and accept the warts that go along with it. Those folks tend to be passionate, and what they provide in positive word of mouth and enamored customer base can be invaluable.

That's not to say you don't need to address the issues over time, but typically you have some degree of time to do that while in the "sell every unit we can make to rabid fans" stage of things. When Tesla is past their backlog and the "average" consumer is much more likely to be evaluating them, I expect they'll have gotten past some of these growing pains.

 

[mongo]

Oh the results can be dramatic. Only one of those choices results in inconsistent customer service. Something folks talk about, and remember down the road. Tesla can be successful, but Option B isn't really doing them any favors.

Option B is doing them the favor of higher cash flow/ profit by delivering at the rate they can build rather than building at the rate they can deliver (for different levels of delivery experience).

 

[mattjs33]

You'd be surprised.

There's a large degree of folks willing to be early adopters and get in on the ground floor and accept the warts that go along with it. Those folks tend to be passionate, and what they provide in positive word of mouth and enamored customer base can be invaluable.

That's not to say you don't need to address the issues over time, but typically you have some degree of time to do that while in the "sell every unit we can make to rabid fans" stage of things. When Tesla is past their backlog and the "average" consumer is much more likely to be evaluating them, I expect they'll have gotten past some of these growing pains.

It's anyone's guess what the real size of the market will be by then. Especially if all anyone has heard is how difficult it is to get a Tesla delivered.

Under-promise, over-deliver. That's the best way.

 

[jelloslug]

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)




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.




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.




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.

And all the while, they will get better and better at what they are doing without having the overhead of extra physical locations.

 

[mongo]

It's anyone's guess what the real size of the market will be by then. Especially if all anyone has heard is how difficult it is to get a Tesla delivered.

Under-promise, over-deliver. That's the best way.

If it hard to get a Tesla, that means Tesla is selling all they can make (large market). What exactly is the problem from Tesla's POV?

 

[Knightshade]

If it hard to get a Tesla, that means Tesla is selling all they can make (large market). What exactly is the problem from Tesla's POV?

Uh, no....it doesn't... it means Teslas logistical incompetence is causing them to constantly cancel delivery dates because they're unable to get the car and the buyer in the same place at the same time.

Which means they're not selling as many as they can make.

Evidence of this are the things like the "mass sale" events they did recently where they had cars they didn't have buyers for and just hoped people would show up to buy them.

See also the recent offers of free supercharging if you took an "inventory" (ie unsold) car.

See also the mass text they sent out desperate to match buyers with unsold cars before end of quarter.


You can have all the demand in the world- but if you can't deliver the car to the buyer that doesn't help.

And all the while, they will get better and better at what they are doing without having the overhead of extra physical locations.

If they don't have better transport logistics they'll continue to fail to get cars where they need to be in a timely fashion.
If they don't have more, or larger, physical locations then it will be physically impossible for them to deliver the number of cars they are physically manufacturing.

you can tell because that's literally what is happening right now in many locations.

I'm not sure how you "get better" at parking 100 cars in a lot that only holds 10. Can you explain how that works?

 

[Knightshade]

Oh come on now, we both know that grocery stores have some type of food available.

yes- and car carrier companies have car carriers available.

According to the heads of 2 associations that would know.

So when Tesla says there's a "shortage" they really mean "We personally are short of them due to failure to bother lining any up in advance for a huge production surge we TOLD EVERYONE WAS COMING but apparently didn't believe it ourselves."

 

[mongo]

Uh, no....it doesn't... it means Teslas logistical incompetence is causing them to constantly cancel delivery dates because they're unable to get the car and the buyer in the same place at the same time.

Which means they're not selling as many as they can make.

Evidence of this are the things like the "mass sale" events they did recently where they had cars they didn't have buyers for and just hoped people would show up to buy them.

See also the recent offers of free supercharging if you took an "inventory" (ie unsold) car.

See also the mass text they sent out desperate to match buyers with unsold cars before end of quarter.


You can have all the demand in the world- but if you can't deliver the car to the buyer that doesn't help.




If they don't have better transport logistics they'll continue to fail to get cars where they need to be in a timely fashion.
If they don't have more, or larger, physical locations then it will be physically impossible for them to deliver the number of cars they are physically manufacturing.

you can tell because that's literally what is happening right now in many locations.

I'm not sure how you "get better" at parking 100 cars in a lot that only holds 10. Can you explain how that works?

Right, you can't park 100 cars in lot that holds 10, therefore Tesla must be selling car to someone, else all the lots will fill. So while a specific buyer is not getting their car, in many cases someone else did get that car.

Mass sale is selling without transport, the cars likely had buyers in other places, but the cars had not made it there.

Mass text is a way to get around transport issues by focusing on people in the region of the cars and also breaking the narrative of long delays to get a car.

Free Supercharging is a way go get people to select their second (or third) favorite color/ wheel style.