Tesla slowing Model S deliveries, trying to clear X backlog?

[Marcos]

This analysis is pretty intriguing:

Over the weekend, I noted in an instablog post that we finally saw a change to Model S delivery times, with all configurations seeming to show a January delivery expectation. Especially for people that live on the US East Coast, this seemed fairly logical. Unless Tesla had the exact car you were looking for in inventory, it seemed unlikely that the car could be produced and delivered in a short time, especially with the holiday period coming up.

While the change to January news might not be a surprise, I woke up on Tuesday morning seeing another change to the site, now showing expected delivery in February, seen below. So after not seeing any changes in about eight weeks for Model S expected deliveries, Tesla's site has changed twice in less than five days.

The author posits two possibilites:

1) Tesla plans to give employees time off after the holiday/end-of-quarter crunch, or

2) Tesla plans to weigh its line heavily toward the X to reduce the backlog, before resuming a more balanced output.

Another unmentioned possibility: wait time on S's have been steadily decreasing, and were down to just a couple of weeks. So maybe this new delay in S deliveries has more to do with demand, with production in danger of outstripping orders. Part of the Tesla story is built around strong demand for its cars, with long waiting lines as key evidence (kinda like the hot club with a line out the door). It's desirability fueling a bandwagon effect. But with increased factory capacity, those waiting lines are dwindling, at least in regards to the S. So why not crank out more Xs (and high-margin top-of-the-line Xs, further goosing Q1 results) and rebuild a demand queue of Ss in the process? Win-win! Well, except for someone wanting an S sooner than February.

Of course, it could also mean a dramatic rise in Model S orders this holiday season. That seems eminently possible. The airwaves are awash in Lexus and Acura "buy your loved ones this expensive-ass car to prove your love to them" ads. Once that seed is planted, maybe Tesla is getting some collateral benefits.

But as someone waiting on a production X (14XXX), I'm really hoping it's just a strategic shift in production ratios so we can all get the cars we've waited so long to receive.

 

[sub]

Tesla sells cars in more than one country. Most if not all the non US countries were
Put on hold the past 1-2 months in order to crank out as many model S as possible and get them into customers hands. They will now spend January focusing on these countries and making U.S. Customers wait.

 

[activejustin]

In my experience Apple frequently stops the current model and runs out of inventory, showing some time until you could purchase a new model when they were about to implement unannounced updates.

Perhaps Tesla is using the same strategy as Apple, drawing down the current inventory and then stopping production temporarily while some feature changes are put into place? This draw down and implementation of a wait ensures more happy customers that get features they did not even know about vs disappointed folks that just spent $70k - $120k and are immediately thinking about what they can do to turn in their just bought model to get the latest feature that they just missed out on. No doubt many people who bought just a little too soon for Autopilot are in this boat right now.

I do like how Tesla will implement a new feature and put it in cars without telling people until they are ready to announce, that results in some happy customers that might otherwise have been disappointed.

I agree that shifting over to the Model X temporarily is another plausible explaination.

 

[MikeC]

Tesla sells cars in more than one country. Most if not all the non US countries were
Put on hold the past 1-2 months in order to crank out as many model S as possible and get them into customers hands. They will now spend January focusing on these countries and making U.S. Customers wait.

+1

It's definitely for international orders to catch up, you can see from this post that non-North American orders have been waiting for some time: Website wait times for delivery change - Page 58

 

[CmdrThor]

Well given that Elon specifically said in the last quarterly earnings report that once Model X production ramped high enough they would do specifically what you posted about, I am guessing that is the case. I believe he said max capacity would be 1,000 Model S or 1,000 Model X, with a combined total of 1,600-1,800 per week. And that they would do 1,000 Model X and thus 600-800 Model S per week for a while to clear the backlog because those customers had been waiting so long. I'm not sure they will be at 1,000 Model X per week by January, but supposedly they are supposed to get there in Q1 2016.

 

[mikeash]

This happened last year too around this time, maybe more like late November/early December. Projected delivery dates went from December to Late December and then suddenly jumped to March. It was probably unrelated to Model X then.