Tesla Q2 Production vs Delivery

[flamingoezz]

Tesla increases Q2 production by 20% but falls short of deliveries

Tesla is upping production despite delivering the fewest vehicles in several quarters. There were reports that Tesla acquired a building that could be used for storage. Wishful thinking, but maybe they areplanning to use the building to stockpile S & X models so they can go heavier on production of Model 3 starting Sept 2017.

 

[JeffK]

Tesla increases Q2 production by 20% but falls short of deliveries

Tesla is upping production despite delivering the fewest vehicles in several quarters. There were reports that Tesla acquired a building that could be used for storage. Wishful thinking, but maybe they areplanning to use the building to stockpile S & X models so they can go heavier on production of Model 3 starting Sept 2017.

They are to be different production lines... they really shouldn't affect each other. The warehouses could be for storing cars (Model 3) or even just parts.

Many people seem confused about Tesla and how a company can focus on several things at once. The trick is having dedicated people for the tasks.

 

[trils0n]

From Tesla's press release:
"Due to the extreme production ramp in Q2 and the high mix of customer-ordered vehicles still on trucks and ships at the end of the quarter, Tesla Q2 deliveries were lower than anticipated at 14,370 vehicles, consisting of 9,745 Model S and 4,625 Model X. In total, 5,150 customer-ordered vehicles were still in transit at the end of the quarter and will be delivered in early Q3."

These are customer-ordered vehicles -- vehicles that have a buyer lined up. They aren't going to sit in a warehouse, they are in transit to customers.

 

[vjason]

I worked for a public company who frequently has to insert similar statements. Let's hope those 5,150 vehicles boost next quarter results or the market will hammer them (even more so than usual).

I wonder how similar quarters have looked in terms of production vs. delivery (no, I haven't gone back to compare). It may be this is only slightly more delayed deliveries than is normal, although you would hope that with steady production the delays are steady from one quarter to the next (so they don't impact any one quarter that much).

Us eventual 3 owners are all curious about this stuff as the ramp is about much more than simply assembling the cars (all obvious I know...).

 

[kaess]

I wonder how similar quarters have looked in terms of production vs. delivery (no, I haven't gone back to compare). It may be this is only slightly more delayed deliveries than is normal, although you would hope that with steady production the delays are steady from one quarter to the next (so they don't impact any one quarter that much).

Here are the numbers compiled by /u/CalculusGuy on Reddit: Tesla Model S deliveries hit an almost two-year low globally • /r/teslamotors

Period | Production | In transit (EOQ) | Deliveries
2014 Q4 | 11627 | 1463 | 9834
2015 Q1 | 11160 | 2578 | 10045
2015 Q2 | 12807 | 3878 | 11507
2015 Q3 | 13091 | 5366 | 11603
2015 Q4 | 14037 | 1925 | 17478
2016 Q1 | 15510 | 2615 | 14820
2016 Q2 | 18345 | 5150 | 14370

You will see the 2016 Q2 had abnormally high In Transit (EOQ) figures.

 

[Garlan Garner]

Tesla increases Q2 production by 20% but falls short of deliveries

Tesla is upping production despite delivering the fewest vehicles in several quarters. There were reports that Tesla acquired a building that could be used for storage. Wishful thinking, but maybe they areplanning to use the building to stockpile S & X models so they can go heavier on production of Model 3 starting Sept 2017.

I don't know how any company could store anything that they are behind on deliveries.

 

[flamingoezz]

I thought I read in another related article that Tesla doesn't post their sales numbers like other manufacturers. Maybe I misunderstood --but if that is the case, how would we know if these cars have buyers or not..

sorry, im realizing that this is probably a dumb question

I don't know how any company could store anything that they are behind on deliveries.

 

[kaess]

I thought I read in another related article that Tesla doesn't post their sales numbers like other manufacturers. Maybe I misunderstood --but if that is the case, how would we know if these cars have buyers or not..

Tesla does not produce cars for dealer inventory like other manufacturers. All vehicles are custom ordered by a buyer who places a deposit at the time of his/her order.

 

[JeffK]

Here are the numbers compiled by /u/CalculusGuy on Reddit: Tesla Model S deliveries hit an almost two-year low globally • /r/teslamotors

Period | Production | In transit (EOQ) | Deliveries
2014 Q4 | 11627 | 1463 | 9834
2015 Q1 | 11160 | 2578 | 10045
2015 Q2 | 12807 | 3878 | 11507
2015 Q3 | 13091 | 5366 | 11603
2015 Q4 | 14037 | 1925 | 17478
2016 Q1 | 15510 | 2615 | 14820
2016 Q2 | 18345 | 5150 | 14370

You will see the 2016 Q2 had abnormally high In Transit (EOQ) figures.

I hope people see this and realize that production is still up. People need to start using their brains instead of making rash decisions because they read only half of a sensationalist news report.

 

[cronosx]

Here are the numbers compiled by /u/CalculusGuy on Reddit: Tesla Model S deliveries hit an almost two-year low globally • /r/teslamotors

Period | Production | In transit (EOQ) | Deliveries
2014 Q4 | 11627 | 1463 | 9834
2015 Q1 | 11160 | 2578 | 10045
2015 Q2 | 12807 | 3878 | 11507
2015 Q3 | 13091 | 5366 | 11603
2015 Q4 | 14037 | 1925 | 17478
2016 Q1 | 15510 | 2615 | 14820
2016 Q2 | 18345 | 5150 | 14370

You will see the 2016 Q2 had abnormally high In Transit (EOQ) figures.

Now, what we can see is a steady rampup for production, and if we want to look at it, the last Q had the greatest ramp up in production.
It's a huge thing! i would cheer! the deliveries are a useless number unless the stock-pile the car, wich they don't do.

And since we have a statement that say that half the production was made in the last "days" i would say that the theorical production sate is much higher than 18k cars, i would say something like 20k.

If in the next quarter they don't have problem with the production line they could end up producing something like 20-21k cars, and this will sum up with the "missed" deliveries ( like what happened in the 2015 Q4 ) making a new record in deliveries.

It's beyound me how one can see this numbers and think "oh no! they didn't deliver! they can't meet the goal!".
I can understand something like "they should ramp up faster, they are getting only a 15% of improvement every quarter! and only 50% rampup in 1 year! it's not enought!"
but just looking at the deliveries.. now thats stupid.

 

[vjason]

Yeah, such as the life of a public company. You can never grow enough for the markets, and they will short you to death every chance they get.

Now if they could just solve some of the quality issues I read about in the X forums. Not the infamous doors so much as loose body panels and the like. I realize a QA team can't always identify things that will have issues in a few hundred miles, but can we at least check fit and finish of the vehicles?

If there is any "benefit" to living on the East coast it is a chance for those west of me to help work the bugs out of the production line. So as much as I have occasionally grumbled about waiting my turn, hopefully some of that time is returned to me in less initial service center visits to fix things that should have been caught in QA.

Now, what we can see is a steady rampup for production, and if we want to look at it, the last Q had the greatest ramp up in production.
It's a huge thing! i would cheer! the deliveries are a useless number unless the stock-pile the car, wich they don't do.

And since we have a statement that say that half the production was made in the last "days" i would say that the theorical production sate is much higher than 18k cars, i would say something like 20k.

If in the next quarter they don't have problem with the production line they could end up producing something like 20-21k cars, and this will sum up with the "missed" deliveries ( like what happened in the 2015 Q4 ) making a new record in deliveries.

It's beyound me how one can see this numbers and think "oh no! they didn't deliver! they can't meet the goal!".
I can understand something like "they should ramp up faster, they are getting only a 15% of improvement every quarter! and only 50% rampup in 1 year! it's not enought!"
but just looking at the deliveries.. now thats stupid.

 

[182RG]

I hope people see this and realize that production is still up. People need to start using their brains instead of making rash decisions because they read only half of a sensationalist news report.

Production is up, but Deliveries are what makes the cash register ring. This is financial news, and that is where the focus is with any public company.

So, what exactly are they going to do different to deliver the mythical 500,000 per year? It doesn't appear the current SvC model is going to work.

 

[cronosx]

Yes of course i can understand how someone will take any chance to gain money, and of course they don't care of the real value of the title, they are aiming the short interest, but what i don't understand is the reaction of someone who say something like "should i cancel my reservation? they didn't meet the goal!" or "they can't achive the goal of 500k since they didn't deliver enought" or "there is no more interest in model S since the delivery dropped" and on.. and on..
how can anyone be so superficial and don't look under the hood?

 

[cronosx]

Production is up, but Deliveries are what makes the cash register ring. This is financial news, and that is where the focus is with any public company.

So, what exactly are they going to do different to deliver they mythical 500,000 per year? It doesn't appear the current SvC model is going to work.

Again.. no! this doesn't means nothing of the sort!
They didn't deliver because they had some problem with the production line ( like the were doing some upgrade ) or with the delivery of raw material, it's not a distribution problem. You can say the have problem in getting the raw material, and this can make serius problem with the 500k/year or similar, but not that the SvC isn't working properly since there wasn't car to delivery and then "Boom, now we have the car".
You can say that the SvC have problem when they need to stock the car in the factory since there is no way to ship, or since the SvC are full and aren't able to make space for new delivery.. and this is NOT the case.

 

[MikeDog77]

Production numbers keep increasing despite everything going on. This is great news and I wish more investors would read the headlines and sell in order to make the stock a little cheaper.(but clearly the investors are smarter than the headline writers) It takes a 5th grade math student to look at Q32015 where they had over 5k of cars in-transit and look at the Q42015 deliveries to know that Q32016 will be a monster quarter for Tesla. But as many people said deliveries are misleading stat. Who cares about them. The only question for Tesla is can they produce cars fast enough and make a profit on them. They have proven they can sell whatever they make and they are sitting on over 400,000+ orders.

The current numbers show me that Tesla continues to produce more and more and is on pace to do about 75-90% of what they said they are going to do. So if they only make 450,000 cars in 2018 is everyone going to be calling them a failure? When they do 15 billion+ in sales?

I do think the Q2 financial results will be impressive because of the large number of Model X delivered vs the Model S.

 

[182RG]

Again.. no! this doesn't means nothing of the sort!

I understand manufacturing and supply chains...thanks! My point is that there are potential bottle necks in the entire chain, and there will be many other problems that are due to shear numbers with the Model 3 rollout. The SvC network will be a bottle neck. They already are, with service appointments being measured in weeks. It took a matter of hours to prep my last new ICE vehicle that I ordered, once it came off the truck.

My other point stands as it is. Production numbers are secondary, if you struggle delivering product and collecting $$$. That's why the financial world focuses on deliveries and the regs around revenue recognition.

 

[JeffK]

I understand manufacturing and supply chains...thanks! My point is that there are potential bottle necks in the entire chain, and there will be many other problems that are due to shear numbers with the Model 3 rollout. The SvC network will be a bottle neck. They already are, with service appointments being measured in weeks. It took a matter of hours to prep my last new vehicle that I ordered, once it came off the truck.

My other point stands as it is. Production numbers are secondary, if you struggle delivering product and collecting $$$. That's why the financial world focuses on deliveries and the regs around revenue recognition.

This doesn't make the financial world correct. They measure in black and white with hard dates. Q2 plus a few days and all the cars would be delivered. They are not struggling as much as people are claiming. An entire month into Q2 was when they finally had a model X without defects so there was a lot going on. As a consumer if you had a choice get your Model X sooner with potential defects or wait a few weeks and get a possibly defect free model?

Even with that delay and the need to fix something on every Model X that left the manufacturing line in April, they still managed to ramp up production and yes deliveries must follow production. Just because a balance sheet says they have many vehicles on hand (in transit) and not delivered at the end of a quarter, one should not interpret this negatively as you'd just be skewing the true financials. These vehicles will arrive at their destinations and Tesla will get paid.

People seem to be looking at Tesla with a magnifying glass and judging by short intervals instead of taking in the whole picture.

 

[cronosx]

I understand manufacturing and supply chains...thanks! My point is that there are potential bottle necks in the entire chain, and there will be many other problems that are due to shear numbers with the Model 3 rollout. The SvC network will be a bottle neck. They already are, with service appointments being measured in weeks. It took a matter of hours to prep my last new ICE vehicle that I ordered, once it came off the truck.

My other point stands as it is. Production numbers are secondary, if you struggle delivering product and collecting $$$. That's why the financial world focuses on deliveries and the regs around revenue recognition.

It could very well be, but it's not deducible from the number of cars in delivery ( and this is my point ). if in the nexts Q they continue to increse the number of cars in delivery, then it could show a bottleneck ( i emphatize.. could, since if in a day you produce 30% more car than the last Q, then you should have an increase of 30% in car in delivery, simple math ), but for the data we have one can only think what they said: they built a LOT of car in the latest week, so the car are on ships. If most of the car are in the SvC then, you could be right. But for now it's more probable that the car are in ships since an SvC can store a very limited number of cars.
From your statement one can conclude that they are already full, and the ships are bringing new car thas has nowere to be parked, but i don't think this is the case

 

[X Yes?]

Tesla increases Q2 production by 20% but falls short of deliveries

Tesla is upping production despite delivering the fewest vehicles in several quarters. There were reports that Tesla acquired a building that could be used for storage. Wishful thinking, but maybe they areplanning to use the building to stockpile S & X models so they can go heavier on production of Model 3 starting Sept 2017.

It was interesting on the delivery announcement the emphasis on increased production vs. deliveries. This thread brings into question what they would do with more cars: Model X inventory car purchase.

There are now inventory X's with discounts and hundreds of inventory S's available now.

 

[alseTrick]

It was interesting on the delivery announcement the emphasis on increased production vs. deliveries. This thread brings into question what they would do with more cars: Model X inventory car purchase.

There are now inventory X's with discounts and hundreds of inventory S's available now.

Hmm, maybe I'll do that with the 3. I really don't care if it's got 1,000-2,000 miles on it or if it has the latest autopilot hardware. As long as there are no major cosmetic issues due to it being a test drive vehicle, it sounds like a great idea.