Those who argue that there has been large inventory buildup in some areas are correct, but ignore the Q1 logistics issues that stemmed in large part from the Suez canal effects. I am not an expert on shipping matters, at least a couple of us seem to be. From what I know the primary effects of the Suez Canal were two: 1. increase in shipping times between China/South East Asia and Europe and 2. Increase in price, resulting from decrease in supply of available ships. Those two also reflected lessened availability of RoRo in particular so had disproportionate effect on automotive shipments.
Those two factors had collateral impact also, reducing supply of parts and slowing finished goods production and shipping in other areas. Those in turn helped cause seemingly finished goods that were waiting for critical components in some cases and impacting negatively other shipping even outside the directly affected areas.
When considering also the shifting patterns of consumer sentiment in some markets purchasing preferences changed, in some important cases, diminished, so high inventories of some tings rose and others dropped.
Unquestionably Tesla did have unusually high supplies of some Model Y cars, low in others. During the quarter, for instance, I bought a new Model Y. My preferred color, inside and out and equipment were unavailable within 60 days. I compromised, many probably did not.
As Tesla matures, inventory imbalances will inevitably rise. They are beginning to appear as a direct function of 'unwinding The Wave' and vastly increased popularity.
Despite the moaning about inventory buildup, the combination of all these factors means that the "Traditional Tesla Build to Order" simply does not apply when they are dealing in millions of vehicles. So, an inventory of 30 days is NOT, repeat NOT a negative effect. It results directly and inevitably from the unwinding process.
We and the world were told 2024 would be a year of transition...and so it is. Notwithstanding the excellent work several people have done in forecasting Tesla sales and production, the business model itself is changing as Tesla matures, so for the moment
@Troy and others were off for the quarter. They'll adapt to the revised business model.
Lastly, as Tesla goes through this transition we'll see seeming discrepancies in Model Y and Model 3 because those are high volume, built to plan vehicles. Building to plan saves huge expense. It also results in higher inventory levels as variants increase. That will appear for Cybertruck too, eventually. This transition, though is preparing for, above all, the new smaller vehicle(s), the factory changes, additions and new factories.
As we look forward we'll certainly see tesla inventories reported at 30-45 days as these processes evolve. When that happens, as Douglas Arms warned "DON'T PANIC!". Just remember that Tesla has a direct sales model so store inventory, shipping times, production efficiencies will all yield gradual increases in inventory levels.
Remember that other OEM's report sales when transferred to dealer, not end sale. Remember that the balance sheet and P&L for Tesla include the entire supply chain.
2024 is a frightening year in many ways. and is even more for those of us who were not paying attention when Tesla so clearly told us what was happening. The implications are inevitably delaying the high growth and high margins we have grown to regard as semi-divine principles. Key: watch Free Cash Flow. if Tesla manages positive cash flow in Q1 we'll know all is doing well. Inevitably Free Cash Flow will be lower because of supporting this business transition, but if it is still positive we know the total logistics planning and management is still functioning as designed.
The financials are the important part. The production and deliveries are just two metrics. Further, Tesla Energy shows the transition is happening there too, as both production changes new products and variants appear and new factories appear. Q1 did show TE with highest ever completions, but at a lower rate than last year. That too is transitional.
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