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Tesla Motors Backlog

Discussion in 'TSLA Investor Discussions' started by Ingenieur, Sep 9, 2014.

  1. Ingenieur

    Ingenieur Member

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    Hello Readers,
    If you are Tesla Bull, consider this FUD for thoughts.

    The purpose of this article is to find the truth about the backlog.


    As you may know, Tesla has ca. 230 Mio in Customer deposits, 150-160 Mio of which are thought to be towards Model X, based on reservation tally.
    The rest is thought to be Model S reservations, which would imply roughly 30K Backlog, or is it?
    See, in China and Europe, customer has to provide full payment of vehicles price before it is shipped, which is 4-6 weeks before delivery, in China, another prepayment for taxes is also required.
    The problem is, which balance sheet position are these liabilities included in ? I ve written numerous emails to Tesla, you can ask a really nice question like "How do Elon Musks farts smell?" you will get "Like flowers" within hours, now ask "How are payments made by Customers in China and Europe prior to delivery accounted for on the balance sheet?", you get silence. Written 6 from different accounts, nada, nix.
    There is no balance sheet position that reflects it, its not accrued liabilities, not in accounts payable and not in deferred revenues, i was so nice and checked it for you, feel free to ask questions if you have doubts.
    So could it be within Customer deposits which would mean the Backlog is not nearly that big, it could even mean that Model X backlog is not as big as tally suggests.
    Why?
    Check out the Inventory of finished goods, roughly 3300 vehicles- 250 Millions with each vehicles at 75K$ value (2times the amount in Q1 2014), most of them on the way to their customers, large share of them have prepaid their vehicles before quarters end, which could have pushed the customer deposits up.


    I encourage you to contact Tesla regarding the payments on the balance sheet, maybe i am just dumb conspiracy theorist and its all good, if you get response, please let us know.

     
  2. 30seconds

    30seconds Active Member

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    truthfully I am having a hard time sorting out your actual question here. Are you saying the that the backlog for the Model X is only 3300 vehicles b/c 100% is prepaid?

    If so, I would point out that this would be at total odds to the actual data in 2011-2013 regarding Model S deposits and demand, against what we have been told by mgmt., rely on the SUV crazy USA having about zero Model X demand and would probably be against GAAP as this would constitute a material change in the company's financial guidance.

    but I may just be a conspiracy theorist myself who believes that people would like to buy a car / SUV with superior performance, lower operating cost and much lower environmental footprint than your run of the mill A6/5/ E Series or Q7/ X5/ ML Series.

    probably just me
     
  3. Chickenlittle

    Chickenlittle Active Member

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    Trying hard to understand question but if you claim that the deposit number reflects prepaid cars on way to china than this qtr would be quite a beat
     
  4. Cobos

    Cobos S60 owner since 2013

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    I bought my car in September 2013 in Norway, if I recall correctly I had to pay the full 100% amount 5 days before delivery or risk Tesla not being able to register the car with our DMV, and hence delaying my delivery. I do not know how it is in Germany but the clearly biggest market in Europe (Norway) you do NOT prepay anything but the deposit until delivery.

    Cobos
     
  5. Ingenieur

    Ingenieur Member

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    Pardon if i didnt make my point clear.

    Yes, if there are 3300 finished cars, 2x more then Q1, these could be delivered in Q3 so as to push deliveries, although some of them could be loaners.

    The question is not if there are 3300 order backlog, but the question is: If Customer payments are included in customer deposits, the total resevations amount could be lower, much lower, unlike the previously calcluation method:

    (Customer deposits - model x deposits)/2,500$= Model S Backlog

    As we dont know how much of these customer payments (and if any) are included in the customer deposits, we cant interpret higher deposits as higher backlog as Tesla can manipulate it by putting required amount non NA deliveries in way as to have the desired amount of payments in its customer deposits, which could be implied by the rising amount of cars on thier way to customers, compared to Q4 2013, the number grew by 370%.


    Nobody is saying there is zero Model X Demand, for example Model S had Customer deposits of 150 Mio in Q3 2012, with roughly 13K Reservations.

    - - - Updated - - -

    Could you possibly check back with your Tesla sales hotline and ask if its still the case?

    In Germany you are required to provide full payment 4 weeks before delivery, as anyone may find out by calling the hotline.

    - - - Updated - - -

    For some reason my previous post didnt show up,

    would it be possible for you to please call the hotline up and ask if it is still the case (when do you have to provide full payment on vehicle to be delivered)

    - - - Updated - - -

    Could you possibly check back with your Tesla sales hotline and ask if its still the case?

    In Germany you are required to provide full payment 4 weeks before delivery, as anyone may find out by calling the hotline.

    - - - Updated - - -

    Ahh now i see new posts show up as updates to the old one :-D
     
  6. Chickenlittle

    Chickenlittle Active Member

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    Still not clear could you explain it again?
     
  7. Ingenieur

    Ingenieur Member

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    Well simple version:
    If Rising Customer deposits = rising backlog =good news

    If Payments by customers also included in customer deposits thus causing them to rise = no indication of backlog = not so good news

    If Tesla able to generate customer payments between quarters to influence the customer deposits = also not so good news.

    Tryed to get answer from Tesla how are payments by customers accounted for , 6 times, no answer, yet answer on trivial questions very quickly, strange?
    Feel free to email Tesla about it, maybe i just had bad luck and there is a perfectly logical explaination to it.
     
  8. 32no

    32no Member

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    If Tesla does indeed deliver 7800 cars this quarter, then we will be able to tell the size of the backlog. By the end of this month, I think that deliveries for newly ordered Model S will be in late December. This is essentially means that Tesla has a backlog of approximately 13,000 cars by the end of this month (if we assume that Tesla will hit their 35k target this year).
     
  9. Zythryn

    Zythryn MS 70D, MX 90D

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    He is asking how the prepayment funds are categorized once prepayment is made and before delivery is done.

    As a follow up, are those funds categorized as "customer deposits".

    To the OP... No one should try a simple calculation of $2500/deposit, that is wrong to start with.
    What email address did you send your question to?
    If it was their general email, or sales, I would suggest sending it to investor relations.
     
  10. Ingenieur

    Ingenieur Member

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    I contacted investor relations obviously, i used both reply function to "harmless" email as well IR contact formular, both yielded no answer when asked about deposits, i can only encourage everyone to ask the same question and share your results.
     
  11. chickensevil

    chickensevil Active Member

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    The only one that would possibly be reflected in the stats would be for China if they are sitting in customs, since it is clearly stated that they have to pay that extra amount and then it takes about 1-2 weeks afterward to clear customs and take delivery... so China is closer to ~40k per order (plus the 2,500)... but just for those who are taking delivery in less than 2 weeks. If they were running at 800 a week at the time this financial data was provided and even 1/2 of that weeks production went to China, that would be potentially 800 cars waiting for delivery, at most 32M for a Car waiting to be delivered. So 230M - 160M (Model X) - 32M (China) = 38M = 15,200 backlog.

    And again, that is being overly generous to Chinese numbers and priority by saying they had half of their weekly production just sitting on a boat for 2 weeks waiting on customs.

    As for the 3300 vehicles in "inventory" I am sure that number includes loaners, show cars, and produced but not yet delivered inventory. This would only count against customer deposits if it was produced but not yet delivered... but would not be reflected as the full value of the car... that wouldn't make sense... if the customer hasn't given payment for the full vehicle it wouldn't count in the tally... just what they have paid.

    As for the discrepancies in other countries I cannot speak to how they calculate that, given when you order it says nothing on the website about being required to pay up front any extra value before taking delivery. I am sure for their purposes, they will just avoid it overlapping the quarters in order to avoid it messing with their numbers. They box you out here in the US for the same reason... They will only take check/money order on the date of delivery (and disable the wire transfer feature) when you are less than a week out from the quarter end, just so all finances clear for their data.
     
  12. 30seconds

    30seconds Active Member

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    Ingenieur - this is a topic that has been discussed on this site and subject to disclosure by tesla. I would suggest you try searching for some answers as well.
     
  13. Krugerrand

    Krugerrand Active Member

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    I don't need to know the backlog and neither should you. Why? Because it makes no sense (and Elon Musk is clearly a man of logic) to spend millions putting in a new assembly line to increase the ability to make more vehicles - by a lot. It makes no sense to purchase the Lathrop factory. It would make no sense to have renegotiated a new battery deal with Panasonic to increase battery production. It would make no sense to go ahead with the Gigafactory and tell the whole world that 2/3rds+ of production will be for CAR batteries. Because it makes no sense to lie to the world for two full years, repeating ad nauseum: 'We do NOT have a demand problem.' Must Elon Musk tattoo that on his forehead for people to understand?

    Everything going on is a CLEAR indication that there is plenty of demand for the S and the X moving forward. And it doesn't take a genius to figure out that demand for the 3 is going to be out of this world. Providing backlog numbers will only serve to give a certain group of people something else to twist into a negative.
     
  14. schonelucht

    schonelucht Active Member

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    Tesla delivers most foreign cars end of quarter. Even if they take reception of the full payment 4-6 weeks before, that's still in the same quarter and therefore not showing up under the funds held for deposits, but as realised sales for that quarter. Now, there will always be cars they can't get to deliver before the end of quarter due to whatever reason (boat delayed due to weather, unexpected sickness of a DS,...). But that's going to be a small number with a small impact.
     
  15. chickensevil

    chickensevil Active Member

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    It isn't a very small number anymore, unfortunately... there are about 2,000 cars that were produced last quarter but not delivered... even if half of those went to become service loaners and show cars (being very generous here) that is still about 1,000 cars that were stuck in transit. If they were on the way to china that would be a decent impact in the deposit number...

    I am not saying that to cause fear or anything, since I too ascribe to the notion that there is no hidden delivery problem. This company has been one of the most transparent companies I have dealt with, but obviously they are going to keep some things close to their chest.

    But overall yes, I am sure they try very hard to not have overlap.
     
  16. Ingenieur

    Ingenieur Member

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    I will write a full fledged response to previous posts later, i was a littel time constrained last few days.

    I would just like to point out that there are currently ca. 3300 Cars sitting as finished in inventory, some of which are obviously loaners.
     
  17. Chickenlittle

    Chickenlittle Active Member

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    Where did 3300 cars in inventory come from. I have not seen any published data on this. Only inventory cars are those that were ordered and on way to delivery. We don't know how many made, nor volume in delivery process
     
  18. Ingenieur

    Ingenieur Member

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    By currently i ment as per 30.06.2014, i obviously have no clue about current status, pardon if it wasnt clear enough.
    As of 30.06.2014, there was 250 Millions in finished goods in Inventory, as finished goods are accounted at production cost, and cars are sold roughly 103K and 28% margin, we can expect average vehicle to be accounted at ca 75K value, if we devide 250 Millions by 0,075, we arrive 3333 Cars, so roughly 3300, maybe some of the finished goods are drivetrains and cells for daimler, but the amount is most likely not that great, maybe 10-15 Millions.

    Any objections to my calculation?
     
  19. Right_Said_Fred

    Right_Said_Fred Model S - Sig. 283 EU

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    I paid for my car just a few days before I took delivery, not weeks.
     
  20. Ingenieur

    Ingenieur Member

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    Well you had a signature edition, do you know when "normal" customers have to make full payment ?
     

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