Tesla Q2 2019 Vehicle Production & Deliveries - UK Model 3 perspective

[RjbT3]

Tesla press release...

Tesla Q2 2019 Vehicle Production & Deliveries | Tesla, Inc.

So for Model 3 UK orders what could this mean?

Tesla stated:
"In the second quarter, we achieved record production of 87,048 vehicles and record deliveries of approximately 95,200 vehicles."
"Orders generated during the quarter exceeded our deliveries, thus we are entering Q3 with an increase in our order backlog. We believe we are well positioned to continue growing total production and deliveries in Q3."

Apparently, this answers the question as to why they opened the RHD order books before having the vehicles/capacity to fulfil them. So they could make this statement to allay analysts criticisms of weaker than expected demand?

The Tesla press release also said: "Customer vehicles in transit at the end of the quarter were over 7,400"

This is a global figure so it could suggest very few RHD cars in transit. However, the press release also goes on to say "We count a produced but undelivered vehicle to be in transit if the related customer has placed an order or paid the full purchase price for such vehicle."

Tesla mentions the "order-to-VIN matching process" in relation to the "Customer vehicles in transit" metric. So, does this mean the 7,400 vehicles in transit are only counted if a VIN has already been matched to a customers order?

 

[Peteski]

Apparently, this answers the question as to why they opened the RHD order books before having the vehicles/capacity to fulfil them. So they could make this statement to allay analysts criticisms of weaker than expected demand?

The uk order book opened in May and the first cars were delivered in June. No doubt a shed load more uk cars will be delivered over the next 3 months to start fulfilling orders. What exactly would you expect them to do? Stock pile say 5000 uk cars before opening the order book and then deliver them all at once?

 

[RjbT3]

The uk order book opened in May and the first cars were delivered in June. No doubt a shed load more uk cars will be delivered over the next 3 months to start fulfilling orders. What exactly would you expect them to do? Stock pile say 5000 uk cars before opening the order book and then deliver them all at once?

No. Just don't tell the 4000 or so customers who ordered in May to expect a June (or even a July) delivery when most will no doubt be August when Tesla clearly knew this was going to be the case.

But perhaps yes, open the order book in June or July when a load more cars are ready and they are able to give some accurate delivery dates. It's been a mess and you know it.

 

[Yev000]

Just don't tell the 4000 or so customers who ordered in May to expect a June (or even a July) delivery

Purely from the website perspective I have to agree. However, every actual Tesla employee I spoke to in May told me to expect late July or August delivery.

Also, you could have possibly got the car in June if you ordered in May - some have. That date was/is very generic and "technically" correct for very few.

So while you say all this as though it's some kind of revelation after Q2 statements, the "strategy" was plain to see and was discussed in various posts on this forum before Q2 end.

It's all little white lies and very frustrating, but ultimately way more transparent than any car dealership, which would simply hide estimates from you all together.

 

[RjbT3]

It's all little white lies and very frustrating, but ultimately way more transparent than any car dealership, which would simply hide estimates from you all together.

This part I agree with, wholeheartedly. 100%

every actual Tesla employee I spoke to in May told me to expect late July or August delivery.

Every Tesla convo and email told me (and many many others) July. The website said June the whole of May and some of June.

Also, you could have possibly got the car in June if you ordered in May - some have. That date was/is very generic and "technically" correct for very few.

Haha. Even a broken clock is right twice a day!!

So while you say all this as though it's some kind of revelation after Q2 statements, the "strategy" was plain to see and was discussed in various posts on this forum before Q2 end.

Yeah, it was. There was a lot of speculation pointing out this could be the case. Some of it I disagreed with/didn't believe at the time. Many others also hung on the hope Tesla wasn't deliberately lying to get orders in the books as quickly as possible. But they were. They have confirmed it with their actions and statements. It's all fascinating, entertaining, frustrating and exciting all at once!

 

[Yev000]

Tesla wasn't deliberately lying to get orders in the books as quickly as possible. But they were.

So that's your spin? That Tesla was deliberately lying to get back orders? To calm wall street I presume? Specifically with the 4000 or so UK cars they promised to deliver in June and didn't?

So the demand issue is so bad they wanted the extra 4k demand for Q3... Really? That's 3 days worth of "demand".

I suppose you are going to say all the other countries hand the same lies regarding possible delivery dates in order to beef up those Q3 order books.

I mean, you could be right....

Although if 4k is what they are scrambling for to make Q3 looks good maybe the Tesla shorts got it right and the next quarter will really see the demand cliff.

IF they didn't open the books, those 300 reservations holders would still be waiting.

But yeah, they definitely deliberately lied to 4000 UK people to beef up Q3.

 

[RjbT3]

So that's your spin? That Tesla was deliberately lying to get back orders? To calm wall street I presume? Specifically with the 4000 or so UK cars they promised to deliver in June and didn't?

So the demand issue is so bad they wanted the extra 4k demand for Q3... Really? That's 3 days worth of "demand".

I suppose you are going to say all the other countries hand the same lies regarding possible delivery dates in order to beef up those Q3 order books.

I mean, you could be right....

Although if 4k is what they are scrambling for to make Q3 looks good maybe the Tesla shorts got it right and the next quarter will really see the demand cliff.

IF they didn't open the books, those 300 reservations holders would still be waiting.

But yeah, they definitely deliberately lied to 4000 UK people to beef up Q3.

Yeah, definitely. 4000 here, 4000 there, it all adds up. They needed to be able to say they had unfulfilled orders rolling into Q3. Read their press release... Tesla Q2 2019 Vehicle Production & Deliveries | Tesla, Inc.

 

[Snapyou]

Tesla has disappointed thousands of customers in the UK.

They knew they how many reservations they had and this translated into over 1000 orders on the 1st day the car went on sale.

I ordered on 1st May and believed estimated delivery would be late June or early July. Tesla must have known it had no capability to deliver. On 4 June I had a call to ask can I take delivery w/c 8 July, but on the 29 June I am told they have no idea when they will deliver the car! Therefore 2 months after ordering the car, I do not know when I will get it.

The referral code option was omitted on 1st May and although they state they will correct this and accept referral codes retrospectively, this issue is still unresolved.

Add in changes to the options, price, towbar, invoices, complete lack of communication and shareholder issues, it makes you question how stable is this company.

Questions have been raised as things are so bad, is there going to be an after sales problems, such as the service centres and SuC's. Once all the Model 3's are delivered that have been ordered to date, it will increase the number of Tesla's in the UK by about 50% and could double inside 12 months.

All of this could have been mitigated by publishing reasonable delivery estimates. If when we ordered in May they said they expected cars to be delivered in August onwards, with a few released earlier to early reservation holders, almost everyone would have accepted the position. The cliche "under promise and over deliver" is never so true.

The launch of the Model 3 should have been a great success but has left many frustrated and disappointed with Tesla, and these are customers, some of whom have had a reservation since 2016. This is a shambles and the only bright point is that it does look like we will get our cars in August or September, which is still considerably quicker than almost every other EV's on the market and it does appear to be an outstanding car, but still leaves a bad taste.

 

[RjbT3]

@Snapyou is talking sense. I agree with everything you said here (Tesla Q2 2019 Vehicle Production & Deliveries - UK Model 3 perspective)

Mind you, I do believe Tesla will be a huge success as a business. It will most definitely be a rocky ride, as any TSLA shareholder will attest. But I do believe the company is, on the whole, doing a fantastic job.

 

[Yev000]

Yeah, definitely. 4000 here, 4000 there, it all adds up.

They could have offered the SR below the luxury car tax band and had a lot more orders "on the books". They didn't.

Are you familiar with Occam's razor? Never attribute to malice what you can attribute to stupidity.

 

[Peteski]

No. Just don't tell the 4000 or so customers who ordered in May to expect a June (or even a July) delivery when most will no doubt be August when Tesla clearly knew this was going to be the case.

But perhaps yes, open the order book in June or July when a load more cars are ready and they are able to give some accurate delivery dates. It's been a mess and you know it.

Nobody is going to argue that June delivery was shall we say "optimistic" considering the order book only opened in May with thousands of reservation holders desperate to press the button. I always took it that the first uk cars would start being delivered in June/July and then it would take several months to catch up with the inevitable order backlog. But yeah, they could and should have made it more obvious to anyone not paying attention to their position. If I placed a custom order with any premium manufacturer I would fully expect a 3 month wait in any case, even for a model that had been on the market for several years. If I was custom ordering an iPace, eTron or Taycan today, I certainly wouldn't expect to take delivery this year, never mind next month!

The problem with holding back the order book is that it effectively holds back delivery too. Only when the order book is open do they truly know demand for each model variant and individual specs. Before that they are just guessing what to build and they are not going to guess right on 4000+ cars are they? Now the order book has been open since May, they will be in the process of building cars to fulfil those specific orders over the next quarter. The first batch delivered in June was almost certainly speculative in that they were built before knowing what orders were going to be placed. Because it was only a few hundred cars, they knew they could easily match them to orders. But that would never work with thousands of cars. They would inevitably end up with loads of unmatched cars sitting in inventory.

 

[RjbT3]

They could have offered the SR below the luxury car tax band and had a lot more orders "on the books". They didn't.

Are you familiar with Occam's razor? Never attribute to malice what you can attribute to stupidity.

Yeah, simpler explanations with fewer assumptions are generally better than more complex ones. I think that is what I am doing, thanks for pointing that out!

All this endless speculation as to why it appears to have been such a mess can be attributed to one simple explanation: Tesla needed/wanted to reference many unfulfilled orders rolling into Q3 for their Q2 press release. By capturing all the pent-up UK demand before June without having or intending to fulfil most of the orders helped them achieve it.

Insofar as malice and stupidity, I think Tesla is neither. They know what they are doing, even if they have UK staff who could be ill-informed. Who knows if that was intentional or not? I suppose some customers may think the move was malicious and some will think it's stupidity.

 

[Yev000]

Yeah, simpler explanations with fewer assumptions are generally better than more complex ones. I think that is what I am doing, thanks for pointing that out!

Malicious lying to get more orders on the books in q3 is simpler than mismanaging communications and expectations? Ok mate.

Can we agree that intentional is more complicated than accidental?

They know what they are doing

So this is intentional according to you.

Who knows if that was intentional or not?

You do, apparently.

 

[Dangerous Fish]

They do know what they are doing, but only on a day to day basis, hence the chopping and changing.

They obviously got to a point near the end of the quarter where they could see the Q2 numbers they needed and decided making and shipping more RHD was not going to make a big difference. The consequence of that was a few thousand more to go into Q3 but it wouldn't have been the main reason.

Tesla are in reactive mode so much ATM. This is why the UK can't communicate facts to us. The information they get changes so quickly they can't trust it so they just make stuff up. I wouldn't call it malicious though. If and when things settle down a bit at Tesla, the share price stabilises a bit more and Wall Street gets off Elon's case we might find comms, trust and customer service generally improves.

 

[RjbT3]

They do know what they are doing, but only on a day to day basis, hence the chopping and changing.

They obviously got to a point near the end of the quarter where they could see the Q2 numbers they needed and decided making and shipping more RHD was not going to make a big difference. The consequence of that was a few thousand more to go into Q3 but it wouldn't have been the main reason.

Tesla are in reactive mode so much ATM. This is why the UK can't communicate facts to us. The information they get changes so quickly they can't trust it so they just make stuff up. I wouldn't call it malicious though. If and when things settle down a bit at Tesla, the share price stabilises a bit more and Wall Street gets off Elon's case we might find comms, trust and customer service generally improves.

I completely agree, hopefully, the accomplishment for their second-quarter sales will achieve that. After all, the success of the company is more important to customers than delayed fulfilment of orders.

Some people on here were pointing out pretty early on that Tesla would focus on US domestic (and Canada) sales to beat their Q2 target. I originally hoped, back in May, that Tesla had opened the UK order book to help hit the June end sales (for Q2) and they had already made a big batch of RHD ahead of time. A UK Tesla employee said as much before May but this was clearly never the case as it has played out.

 

[Dangerous Fish]

I originally hoped, back in May, that Tesla had opened the UK order book to help hit the June end sales (for Q2) and they had already made a big batch of RHD ahead of time. A UK Tesla employee said as much before May but this was clearly never the case as it has played out.

Maybe that was the case at the beginning of May, but something changed and they had to go to plan B, or plan C or plan D?

The UK Tesla employees were probably acting on good faith and what they knew up to that point (which wouldn't have been much).

I'm not blaming Tesla in Europe for the mis-information.

 

[Peteski]

All this endless speculation as to why it appears to have been such a mess can be attributed to one simple explanation: Tesla needed/wanted to reference many unfulfilled orders rolling into Q3 for their Q2 press release. By capturing all the pent-up UK demand before June without having or intending to fulfil most of the orders helped them achieve it.

You seem to have focused on this ^ as Tesla's main driver. It doesn't seem all that critical to me. Their main driver was more likely maximising Q2 sales to beat their previous personal best, which they achieved and possibly at the expense of delaying RHD deliveries. The uk market was always planned to open around the time it did (actually it opened a bit later than some expected). Given that some RHD cars were delivered in June, then it made perfect sense to open the order book in May. If zero uk cars had been delivered and none were on the way yet then your theory might have been more believable.

 

[RjbT3]

You seem to have focused on this ^ as Tesla's main driver. It doesn't seem all that critical to me. Their main driver was more likely maximising Q2 sales to beat their previous personal best, which they achieved and possibly at the expense of delaying RHD deliveries. The uk market was always planned to open around the time it did (actually it opened a bit later than some expected). Given that some RHD cars were delivered in June, then it made perfect sense to open the order book in May. If zero uk cars had been delivered and none were on the way yet then your theory might have been more believable.

My theory is just a theory. It is believable, it just depends on what you want to believe. I do think the UK order book timing and June/July delivery estimate was the main driver for Tesla to achieve the unfulfilled rolling orders into Q3 they wanted. Obviously, not the overall priority which, we both seem to agree, was always Q2 sales deliveries.

Where we definitely disagree is with your belief that Tesla opened the UK order book on May 1st just so they could deliver a few hundred cars in June. Personally, I think that is far more difficult to believe.

Tesla wants you/press/everyone to believe the UK order book was opened for real deliveries in June (and July) hence the smattering of real deliveries with the few cars sent.

Either one of us could be right or wrong. It's just a theory.

 

[GeorgeSymonds]

I don't think Tesla even manufacture to order any more - they produce cars in a way they think best and then try and match the orders to the production, and they're not great at it at times so you can end up with a carpark of black cars and an order book of white ones - then they make it worse by changing the spec making the car park not easy to sell. We saw an attempt to manage this with the inability to order certain interiors in June but that did imply the ones you could order would be available, but we've seen it time and time again on MS and MX. Its entirely possible the VINs are only being allocated when the boats have set sail.

As for Tesla playing games at quarter end to massage the numbers - I wouldn't put anything past them having had a Tesla for 3 years They have M3 published inventory now in most countries - that should never happen if you have a customer for every car you make, they don't they just have as many orders as cars they make which is not the same thing..

 

[Peteski]

Where we definitely disagree is with your belief that Tesla opened the UK order book on May 1st just so they could deliver a few hundred cars in June. Personally, I think that is far more difficult to believe.

In what alternative universe would they ever open an order book and then deliver thousands of cars across the Atlantic within a month of that date?