Tesla Reservations Model and Demand Generation

[CapitalistOppressor]

Canadian stores, of course, simply don't exist.

In my brain I always tend to think of Canada as a part of the U.S. Like an extremely large county in upstate New York, or possibly Massachusetts... Like a great big Canadachusetts... :tongue:

But yes, I missed the store in Canada. Thought they were all "coming soon"

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As I understand it Tesla use postal codes to denote store location sales. So if an order comes from a buyer's home computer, the zip code entered determines which store gets the credit for that sale. Regardless of day.

Yes, thats essentially what I've been told. The various postal codes (for whatever country) are sorted into a sales region for each store.

 

[Doug_G]

In my brain I always tend to think of Canada as a part of the U.S. Like an extremely large county in upstate New York, or possibly Massachusetts... Like a great big Canadachusetts... :tongue:

I don't think that point of view would be terribly popular north of the border. You haven't annexed us yet. Remember, we kicked your asses in the war of 1812.

 

[DonPedro]

I don't think that point of view would be terribly popular north of the border. You haven't annexed us yet. Remember, we kicked your asses in the war of 1812.

Besides, whom would they then blame?

 

[CapitalistOppressor]

I don't think that point of view would be terribly popular north of the border. You haven't annexed us yet. Remember, we kicked your asses in the war of 1812.

In fairness, everyone kicked our butts in 1812. We were so shambolic then that we waited until after the war was over to win a battle. Probably some deep Yankee logic at work there...

 

[xtothem]

For those worried about the size of Tesla's order books - you can rest easy for at least another quarter. The image below taken from the Tesla website "Design Center" shows a wait time for the Model S and Model S Performance to be 3 and 2 months, respectively. Around April 10th (a week after the financing offer was released) the wait time was just one month less for both models. Without any VIN numbers reported this could be the best gauge for production vs. demand.

 

[K Hall]

Excellent deduction xtothem. The evidence shows that orders are accelerating and production even though it has been ramped up to 650 units a week can not keep up.

 

[Zzzz...]

Excellent deduction xtothem. The evidence shows that orders are accelerating and production even though it has been ramped up to 650 units a week can not keep up.

Yeah, but Tesla is about to start producing Model S for Europe. IIRC they should start EU production run in June.

 

[ShortSlaver]

Excellent deduction xtothem. The evidence shows that orders are accelerating and production even though it has been ramped up to 650 units a week can not keep up.

If they can produce and sell 650/week for the rest of the year then we truly have a real monster on our hands. I can hope that's the case but I'm not counting on it. That would be so insanely above projects I can only imagine what would happen.

 

[vgrinshpun]

Excellent deduction xtothem. The evidence shows that orders are accelerating and production even though it has been ramped up to 650 units a week can not keep up.

What is the assumption of current production of 650 cars/week based on?

As far as I remember this production rate was based on frunk liner production rate reported by the supplier. The timeframe reported by this supplier was, however, "early fall". The latest reference for current production rate was 500 cars/week, not 650.

 

[ShortSlaver]

What is the assumption of current production of 650 cars/week based on?

As far as I remember this production rate was based on frunk liner production rate reported by the supplier. The timeframe reported by this supplier was, however, "early fall". The latest reference for current production rate was 500 cars/week, not 650.

I've recently read a rumor of a glass manufacture shipping 600-650 units/week right now but this isn't substantiated by anything that I could put hooks into. Hope for the best?

 

[CapitalistOppressor]

Excellent deduction xtothem. The evidence shows that orders are accelerating and production even though it has been ramped up to 650 units a week can not keep up.

The last report I heard was that 650/week was planned for late Q3.

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For those worried about the size of Tesla's order books - you can rest easy for at least another quarter. The image below taken from the Tesla website "Design Center" shows a wait time for the Model S and Model S Performance to be 3 and 2 months, respectively. Around April 10th (a week after the financing offer was released) the wait time was just one month less for both models. Without any VIN numbers reported this could be the best gauge for production vs. demand.

View attachment 20557

That's a nice find, but we are also getting near to the point where European production could be included in that time frame, which would also stretch out the U.S. wait times. And we don't know if that is based on a continued production rate of 500/units/week or if they downshifted to some slower rate. I should spend time in the delivery thread and see if anyone has been on the factory tour lately. That channel has given us good snapshots on production in the past.

Devilish advocacy aside, its very consistent with the sales model I am using, and that model also requires a production increase in a few months if the new European stores being built manage to increase demand. The new "lease" program might have also recaptured some of what might have been a large number of non-cancellation/deferrals that Tesla has been carrying on their books.

 

[xtothem]

The last report I heard was that 650/week was planned for late Q3.

I wouldn't be surprised if 650/week is reached by the start of Q3. Further digging into the job postings for this week shows temporary job openings on production line positions (Casting, Stamping, Body Finishing, etc). Many are daytime positions but there are a few that have a swing shift.

To me this means a few things:
- First and most importantly, new hires across the board mean they have met 500 car/day production levels.
- Next given they are temporary positions, I believe Tesla is attempting to exceed 500 cars/day production in the very near future. If demand remains high into the fall/winter they will be retained for full time employment. If not, they get the chop.

 

[CyberDutchie]

I wouldn't be surprised if 650/week is reached by the start of Q3. Further digging into the job postings for this week shows temporary job openings on production line positions (Casting, Stamping, Body Finishing, etc). Many are daytime positions but there are a few that have a swing shift.

To me this means a few things:
- First and most importantly, new hires across the board mean they have met 500 car/day production levels.
- Next given they are temporary positions, I believe Tesla is attempting to exceed 500 cars/day production in the very near future. If demand remains high into the fall/winter they will be retained for full time employment. If not, they get the chop.

I heard several weeks ago they were laying off some factory people, which got me concerned initially. But then I thought Elon is a business man and it's all about making profits. So it's good they are adjusting hiring carefully, and if they are rehiring temps now that's a good sign too.

 

[brianman]

I don't think that point of view would be terribly popular north of the border.

Give it a few more years, Doug. We're about 8 years from saying 'f it' for border security entirely apparently.

 

[Citizen-T]

They seem to be developing a pattern of hiring a bunch of temps to increase production, then unwinding those temp positions as they get more efficient at operating at that new higher rate; presumably, converting the best of the temps to full-time positions.

We might have found a new way of tracking the production ramp. A trend to keep an eye on at least.

 

[DonPedro]

EU reservations seem very stable between 10 and 11 per day.

Between April 2 and April 22 approx. 220 reservations, which means approx. 11/day. In the period from 06Dec12 to 12Mar13 there were about 1000 reservations, which works out to 10.4 per day.

To fill 40% of 500/week capacity, EU demand needs to be uncreased to almost 30/day in the longer term. This is not unrealistic, but neither will it be achieved without effort. In Norway, stores seem to be opening in the 3 biggest cities outside Oslo (which already has a store). I am sure similar efforts are underway in other countries.

Assuming that the "2 cars per store per day" thesis is realistic (and assuming 300 opening days a year, being Europe), 17 stores are needed to generate 200/week demand.

 

[xtothem]

They seem to be developing a pattern of hiring a bunch of temps to increase production, then unwinding those temp positions as they get more efficient at operating at that new higher rate.

I was trying to articulate this very concept. You said it perfectly and I fully agree. Why they would do this.....it is better to get an additional employee than to have current employees work overtime or weekends for morale and $ reasons.

We might have found a new way of tracking the production ramp. A trend to keep an eye on at least.

The only issue with using this to forecast production is they provide no specific starting date.

 

[vgrinshpun]

EU reservations seem very stable between 10 and 11 per day.

Between April 2 and April 22 approx. 220 reservations, which means approx. 11/day. In the period from 06Dec12 to 12Mar13 there were about 1000 reservations, which works out to 10.4 per day.

To fill 40% of 500/week capacity, EU demand needs to be uncreased to almost 30/day in the longer term. This is not unrealistic, but neither will it be achieved without effort. In Norway, stores seem to be opening in the 3 biggest cities outside Oslo (which already has a store). I am sure similar efforts are underway in other countries.

Assuming that the "2 cars per store per day" thesis is realistic (and assuming 300 opening days a year, being Europe), 17 stores are needed to generate 200/week demand.

I think that Tesla is a bit more optimistic about working habits in Europe. Visiting their European Stores page, there are 13 open and "soon to be open" stores in Europe. Doing the math: 360 x 2 x 13 = 9360, which closely matches 10K cars/year that Elon Musk mentioned during the Q4 2012 conference call.

http://www.teslamotors.com/findus

 

[brianman]

I was trying to articulate this very concept. You said it perfectly and I fully agree. Why they would do this.....it is better to get an additional employee than to have current employees work overtime or weekends for moral and $ reasons.


The only issue with using this to forecast production is they provide no specific starting date.

In some ways, it's likely faster and simpler to hire a lot of temps and convert a few to full-time than it is to hire many full-time and then let the "not working out" ones go. There are all kinds of termination rules and paperwork for full-time employees. And then there's fun stuff like health care to contend with.

 

[Robert.Boston]

I was trying to articulate this very concept. You said it perfectly and I fully agree. Why they would do this.....it is better to get an additional employee than to have current employees work overtime or weekends for moral and $ reasons.

If you anticipate the need to hire more employees, then running current employees harder doesn't address that need. It appears that Tesla is using temps as other companies might use interns: get 12 interns in during the summer, see which two or three really stand out and succeed in the corporate culture, hire those and bid the others godspeed. Perfectly rational behavior when the available labor pool is large.