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Tesla Motors Backlog

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

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  1. Chickenlittle

    Chickenlittle Active Member

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    Yes I do. Perhaps inventory included battery packs assembled but not installed. Perhaps inventory included parts pressed from aluminum sheets. I don't believe you can tell
     
  2. Ingenieur

    Ingenieur Member

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    tes,a.JPG
    The statement is not correct, i talked not about total inventory but about finished goods, not work in progress or service parts.
    According to Tesla:

    Finished goods primarily include Model S vehicles built to customer specifications that were in-transit to our foreign operations for customer delivery.

    Also GAAP definition of finished goods suggests its either finished cars or powertrain/batteries for delivery to customer (Daimler).
     
  3. Chickenlittle

    Chickenlittle Active Member

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    So how do you count model s on way to Europe with battery pack not installed? Is that a finished product? If it is than why isn't a finished battery pack at Fremont not finished? If gather car minus battery pack not a finished product than where is that in your numbers?
     
  4. chickensevil

    chickensevil Active Member

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    Here Just the facts:

    Q1:
    • Record Q1 Model S production of 7,535 vehicles
    • Delivered 6,457 Model S vehicles, slightly exceeding guidance
    Q1 finished goods.PNG
    Q2:
    • Record Q2 Model S deliveries of 7,579 vehicles
    • Record Q2 Model S production of 8,763 vehicles
    finished 2.PNG
    ------------------------------------------------------------------
    So, what we have is in Q1 there was a "pipe" of 1078 vehicles and a "Finished Goods" of 132M
    In Q2 we have a "pipe" of 1184 and a "Finished Goods" of 250M (nearly double).

    We unfortunately don't know how many cars they produced vs delivered in Q4/2013 however their "finished goods" were listed at 69M which if you compare Y/Y in Q4/2012 they had 62M in finished goods. In Q3/2013 they had 102M, Q2/2013 they had 77M, finally in Q1/2013 they had 63M.

    So, we can safely assume that during the period when they were trying NOT to fill a pipe (I mean Q4/2012-Q2/2013 they were only doing US deliveries and mostly to CA at that) they had about 74M average in finished goods. That is a float of 703 cars... I mean there were periods where they weren't even doing 700 cars in 2 weeks for some of that timeframe, so these cars MUST include loaners and show cars. So the question becomes how many?

    Well, if each store has 2 show cars on the floor and there are now something like 100 stores across the world... so there is 200 cars. Most stores I have been to have 2 test drive cars, so X off another 200. How many loaners per shop? 5? 10? there are easily 100 service centers out there as well. If only 10 Tesla loaners that would be 1000 cars right there. Where do they get the cars for the "Test drive events"? let's just forget about those and assume they get them from a loaner fleet or some such. So without even trying I have already racked up about 1400 cars. I tried not to count stores not yet open, but have they set aside cars yet for some of those? what about soon to be opened service centers? What about cars that are at the factory that are strictly engineering/test cars? It is very easy to rack up more cars that are around the world for these purposes.

    So what we know... they sold off massive amounts of their service/showroom/testdrive fleet back at the end of 2013 (hence the noticeable drop off from Q3 to Q4 in 2013 in finished goods), so they obviously had to remake more of those... in Q1. So let us be generous and say only 1/4th of those were for that purpose... now our pipe is only 750 "waiting to be delivered".

    So you tracking so far? we have some 1500+ cars in their loaner/test/show roster. We have a "pipe" of 750 cars in Q1 to carry over into Q2. So from the deliveries in Q2 lets subtract that 750. That gives a new production vs delivery disparity of ~1934 cars. So we have 1934 cars "extra" produced in Q2 plus the fleet of around 1500 cars and that would give you around 3434 cars sitting around as "finished goods"...

    Well, looks like I overshot your 3300 guess, without even trying... So ummm, what was your point again?

    - - - Updated - - -

    In case someone has a hard time tracking what I am saying up there (I am too lazy to make clear pictures and charts), I am suggesting that there is a very logical and simple solution to explaining the "finished goods" without some crazy theory that they have 3000 cars just sitting in a warehouse somewhere because they actually don't have the demand that they are claiming they have. Occams Razor, the simplest solution is likely the right one, in this case, they have a large store/service base that requires cars, and they have a pipe to send cars all over the world. Most likely any cars they are sitting on, is either already sold or is being used for a specific other purpose. There isn't some crazy connect the dots conspiracy theory going on here.
     
  5. schonelucht

    schonelucht Active Member

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    I have a hard time believing they ran a pipe of 750 cars towards Europe at the end of Q1 2014. That would have covered April and over 3 weeks of May delivery in Europe. Shipments take time, but not 7 weeks if I parse the reports in the Dutch section of this forum correctly.

    For current Dutch customers, Tesla requests proof of full payment 3 days before delivery.
     
  6. sundaymorning

    sundaymorning Active Member

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    I don't have a hard time believing Tesla Motors and Elon at all. I haven't had to worry about them since November 2012. I've said it once and I'll say it again. Every damn quarter we get people having a hard time believing tesla, and every damn quarter Tesla delivers. I've read through almost every negative beliefs about tesla since inception, and they all have been proven wrong, this tells me I'm on the right side of the bet.
     
  7. Krugerrand

    Krugerrand Well-Known Member

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    +1

    Many who have supported Tesla along the way still question if they will do this, do that, meet this, meet that. It's a disease, I tell ya. People can't get out of their own way most days.
     
  8. Ingenieur

    Ingenieur Member

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    The pipe is actually much bigger if we put it this way:
    tesla 2.JPG

    As of 30.06.2014, total production exceeded deliveries by 3300 units since Q3 2012 ,if Q3 guidance is correct, we will see 4500 Units produced more then delivered.
    The vehicles didnt fly to Mars i suppose.

    We can discuss how much of that are loaners and test drive cars, but the sales network didnt expand that much, and Tesla said the majority of finished goods are for customer deliveries.

    The bull case is relative increase is we will get a big Q3 beat and lower Q4 sales to reach 35k.
    The negative scenario would be for produced and not delivering cars are being channel stuffed as loaners and test drive vehicles while starving the customer demand in order to create illusion of endless demand.

    Or maybe something in between.
     
  9. Ingenieur

    Ingenieur Member

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    So any idea why there is such a build-up of inventory? We havent seen it reflected in sales in July August sofar it seems.
     
  10. uselesslogin

    uselesslogin Active Member

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    So your theory is that Tesla came out and said they would be building up inventory in their shareholder letter in February and that the reason they are doing this is to create an illusion of demand? Anyway, I'm with everyone else in having complete trust in management. There is a build-up of inventory because Tesla thinks that is what is need to do to build the business. It is primarily cars headed to a foreign market because that is what they say in their financial information. I would assume that foreign market is mostly China because they have said China is the second largest market after the US and that Europe is fairly small compared to those 2. It isn't like they haven't been telling us what they are doing since the shareholder letter in February.

    There is no demand where you live, but I can assure you that in other parts of the world there is plenty of demand.
     
  11. chickensevil

    chickensevil Active Member

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    While I appreciate your chart, it is making assumptions which cannot be verified relating to the number of produced vs delivered. The only solid information I could find on the subject started in Q1 2014, where are you getting your numbers for all the other quarters? The only ones you say was an "estimate" was Q3 and Q2 of 2013... Maybe I am overlooking something?

    I still assume that some of those extra vehicles produced were cars which became service loaners, show and test cars. Those tend to get sold off anywhere after about 3 months of age and beyond.

    We also don't know what "value" they are attributing to the cost of the vehicles. As I said, above, they could be counting show and service cars in SG&A expenses. Which then get cycled back out as Revenue when they sell one off.

    So all that being said, what "build-up" of inventory? I gave a solid response up above on an easy path to explaining any number of cars being floated. With production times taking 2 weeks to deliver stateside and 3-5 weeks extra for overseas, it isn't hard to guess that even with decent batching of production that you would end up with a large backlog. They were running at 800 a week pre-shutdown... that means at a minimum at the end of the quarter they had a 1600 float. If any were on boats to other countries as Elon has said MANY times in practically every CC since Q4/2013, then of course you are going to have even more than that by the time the quarter comes to an end.

    - - - Updated - - -

    To add to that, I would mention that as of the last interview Elon gave in Norway, that the current standing is

    US: 1
    China: 2
    Norway: 3

    This means that between China and Norway, they could easily be floating at the same rate (or higher) than the US. Both of these two countries take a while to get the cars sent to them. Norway because they likely truck the cars to either the East Coast or the Gulf and put them on a boat, or they have to go down through Panama, neither of which is what I would call "quick". Then it has to make it's way to Norway. China takes a while because everything has to work it's way through customs which isn't exactly quick...
     
  12. uselesslogin

    uselesslogin Active Member

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    Off topic but I can state that at least in 2013 I am very sure they had a contract with Union Pacific to take them by rail across the country to a port on the east coast. I suppose these types of contracts are confidential so I suppose I'm only guessing but I do have relatives in Omaha and Union Pacific is a large employer there.
     
  13. azure1979

    azure1979 Member

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    #33 azure1979, Sep 15, 2014
    Last edited: Sep 15, 2014
    Because Tesla is building so many infrastructures like supercharger station, service center at China & Japan. Tesla will wait until building enough infrastructures.

    apac_supercharger_2015_09082014-2.png
     
  14. Ingenieur

    Ingenieur Member

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    Regarding the source: its all in current reports, they stopped providing exact numbers in Q2 and Q3 for some reason, but for others you can find the data in the press release, let me know i will copy and paste it in case you cant find it.
    For Q2 2013 they said that production was several hundred more then delivery due to loaner and test drive car fleet, i used 350 units. For Q3 its tricky as they just told the weekly production number of 500 (6500), so i just took last month plus 300 units, maybe Q2 was a bit higher and Q3 a bit lower, or vice versa, but the number is correct with +/- ca. 200 units deviation.

    So we still have currently ca. 3300 units and next quarter it will rise to 4500 if guideance is correct. If we assume there is a pool ca. 1000 loaners/test drive cars and corporate vehicles, its still 3500 cars in pipeline, it would represent 45% of Q3 deliveries or close to 3 months of supply to foreign markets (if we assume ca 50% to be delivered outside US).

    So we can change the question to why is there 3 months of supply for foreign markets, it was the case in Q2 2013 when eu deliveries started just at the end of the quarter, so maybe chinese deliveries explode this quarter.
    percentage of sales outside us.JPG
     
  15. chickensevil

    chickensevil Active Member

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    Fair enough, I guess I didn't look in the right places and it is a lot to re-read through that many quarterly filings that are like hundreds of pages... so I probably should have gone through the press releases first -_-

    About China, I would go with that assumption. Everything seems to point to this being the case. There was even someone who managed to take a picture of one of the harbors in China with hundreds of MS just sitting there waiting to be delivered. I would not at all be surprised to hear that most of July/Aug production was to be destined to China/Norway, and we will see that reflected in September.
     
  16. Ingenieur

    Ingenieur Member

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    Sofar i have seen no signs of much increased deliveries in Norway, but there are still 2 weeks to go and i could be wrong.

    China is a black box, the july deliveries were just 304, so august and september have to be really good.
     
  17. Ingenieur

    Ingenieur Member

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    Possible explanation? Cars are sitting idle in China waiting to delivered.

    Are Teslas disappearing in China? - LA Times

    Question is, what is the effect of Customer deposits number and how much of the 4000 units backlog is allready in China?
     
  18. chickensevil

    chickensevil Active Member

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    There are also people who are moving their plates over to the Tesla and back to their old cars since the plates are tied to the person not the car... So you can't track registrations to get an accurate number.
     

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