Company guided stable S/X production for the next few quarters. That means roughly 26k. Do you think 4k Model 3 production is realistic? I don't know of any observations that would confirm such a large production.
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Third quarter deliveries 2017
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Company guided stable S/X production for the next few quarters. That means roughly 26k. Do you think 4k Model 3 production is realistic? I don't know of any observations that would confirm such a large production.
dc_h
Active Member
The used sales are really going to be interesting. Dubai bought 50 apparently used Model S units and used sales report seem to be getting pushed hard.
Look: Tesla cars are the latest taxis in Dubai
Look: Tesla cars are the latest taxis in Dubai
Elon also said he expects the 2nd half of the year to outpace the first for S+X. I expect 26k+ S/X deliveries because of that and production is usually always 1-2 thousand higher to fill the pipeline. So I expect ~28k S/X and <2k M3 produced and around 28k cars delivered. I don't expect 4k M3 for Q3, but I wouldn't complain, of course.
Which Elon quote are you referring to? And was it about deliveries or production? From what I remember, Tesla guided for deliveries outpacing first half and did not say anything about production. Here is how they phrase it in the shareholder letter :
I agree the wording is a bit confusing here but reading closely, S/X guidance is about deliveries. In their conference call they also said about S/X production that investment is a) low b) focused on cost reduction anyway.
So I think it is more consistent with deliveries increasing but production staying the same. They can easily afford to because their inventory outpaced new store creation and 18 months after it's initial introduction the Model X inventory is also at acceptable levels. In short : the pipeline is full. There were earlier three quarters were they sold more than they produced (4 if you agree that one was special because of full X ramp up) so it isn't like they don't have the experience.
One thing we are both counting on is M3 deliveries and that is were they are cutting it realllly close. I have recorded 45 individual VIN sightings. 5 in the 300 range which are most likely validation cars not sold (manufacturers plates etc, ...), one 217 and the remaining 40 all under 200 delivered to customers. Statistically that is more than enough information to be highly confident that they only put at most 250 cars into customer hands. It's still possible to deliver the remaining 1200 or so (assuming production went according to plan) in the next 10 days. But it is also possible that Tesla is holding on to those cars a little longer just to get some feedback on the first 250. If so, we will end up with egg on our face.
2017Q2 shareholder letter said:
I agree the wording is a bit confusing here but reading closely, S/X guidance is about deliveries. In their conference call they also said about S/X production that investment is a) low b) focused on cost reduction anyway.
2017Q2 conference call said:
So I think it is more consistent with deliveries increasing but production staying the same. They can easily afford to because their inventory outpaced new store creation and 18 months after it's initial introduction the Model X inventory is also at acceptable levels. In short : the pipeline is full. There were earlier three quarters were they sold more than they produced (4 if you agree that one was special because of full X ramp up) so it isn't like they don't have the experience.
One thing we are both counting on is M3 deliveries and that is were they are cutting it realllly close. I have recorded 45 individual VIN sightings. 5 in the 300 range which are most likely validation cars not sold (manufacturers plates etc, ...), one 217 and the remaining 40 all under 200 delivered to customers. Statistically that is more than enough information to be highly confident that they only put at most 250 cars into customer hands. It's still possible to deliver the remaining 1200 or so (assuming production went according to plan) in the next 10 days. But it is also possible that Tesla is holding on to those cars a little longer just to get some feedback on the first 250. If so, we will end up with egg on our face.
I think this is still fine and on topic. Agree on not seeing a turn around for used car sales gross margin. I would already be happy if it simply stabilized. All in all still a relative small price to pay to hold up the resale value of the brand but if it keeps growing that would be a future cause for concern. Withdrawing the resale value guarantee to private buyers likely is a first step Tesla took to eventually let this sort itself out.
Tesla guided for negative margin on the 3 this quarter. It's going to be pretty steep as well because it will draw down overall GM to below 20% according to guidance.
I think increasing deliveries goes hand-in-hand with increasing production. Inventories don`t grow on trees either and they would need to replace those sold. They have repeatedly said in ERs/calls that they intend to replace loaners and demo cars at stores with fully loaded models and that they have been working hard to increase the number of cars available there for test drives - X in particular was not even available at most stores until recently. I would assume they have some flexibility in S/X production rates without needing to open up a new line.
Well that`s my theory anyway. Of course I can`t know for sure.
I agree on Model 3 - it is a big risk. I also have not heard any VIN higher than low 400s i think. So they better be ramping right now and deliver next week or we could be in trouble. Not in the grand theme of things, of course. If deliveries slip 1-2 weeks into October, that does not matter materially, but would generate a lot of bad press for missing Q3 guidance.
At the end of last quarter, inventory loaner&demo stood at nearly 13 000. So the inventory doesn't need to grow on trees : it's already built in earlier quarters. They can sell 3000 cars out of inventory without serious repercussions on the loaner fleet. The renewal of the loaner fleet with fully loaded models is orthogonal to that.
We'll know in about 13 days!
If there were a hold but only temporary and relieved by the time they need to release delivery numbers then I think the damage will be minimal. If there still were a hold in place by then I agree that will be ill received. Another thing they could buy themselves some time with is opening the configurator to non-employees. I think that news would dominate the news cycle.
dennis
Model S Plaid
I keep having to remind folks that Elon's Q3 Model 3 forecast was for production, not deliveries. So 30-July, 100-August and 1500-September produced. We know they are delivering some M3's outside of Fremont, such as to the SpaceX folks near Austin. That means not all M#'s produced in Q3 will be delivered in Q3. I also reported on another thread that today I witnessed VIN 000310 being delivered to a customer at the Fremont Delivery Center. So either not all of the 300 series produced were for engineering validation or they have completed that validation and since these were production examples (not release candidates) they are being sold to employees.
With all that said, i am of the belief that Tesla is at least 1-2 weeks behind the ramp necessary to produce 1630 Model 3's in Q3. If so, it may cause a short term hiccup in the SP, unless S+X deliveries exceed WS expectations, which they might well do.
Europe had a good first 2 months of the quarter - total is about what Q2 was. If the rest of the continent is doing as good as Norway is doing in September, though, then this will be a very strong quarter for Europe.
Norway looks pretty good so far.
I have:
600+13050+9900=23550 (3+S+X)
This is 1k more MS in Q3 over the 12050 in Q2 due to some M3 reservations switchups to MS now and inventory build and possible Sept discounting. A few posts here indicated that some in Norway have gone with MS over M3 recently due to worries about incentive lifespan. Of course, as quarters go, we never know how well the discounts and push goes until it's over. Could surprise up to 24000. The wealth effect of ramped TSLA stock value may have triggered some buying.
Tracking Vin #s, I have about this at this point.
Q2 13365 12030 (MS/MX)
Q3 14735 11000 (about 1k more Q/Q)
A lot of Q3 Vin #s are inventory builds - so they need to sell them through active means (sales lots, phone calls to reservation holders, emails to interested parties, etc.) A lot of 90D movement (clearly seen in Norway registrations) indicates discontinued cars may have been offered at helpful discounts.
The quarterly voting here tends to end with actual numbers near the lower edge of the bell curve, so 24000-24500 is most probable.
I have:
600+13050+9900=23550 (3+S+X)
This is 1k more MS in Q3 over the 12050 in Q2 due to some M3 reservations switchups to MS now and inventory build and possible Sept discounting. A few posts here indicated that some in Norway have gone with MS over M3 recently due to worries about incentive lifespan. Of course, as quarters go, we never know how well the discounts and push goes until it's over. Could surprise up to 24000. The wealth effect of ramped TSLA stock value may have triggered some buying.
Tracking Vin #s, I have about this at this point.
Q2 13365 12030 (MS/MX)
Q3 14735 11000 (about 1k more Q/Q)
A lot of Q3 Vin #s are inventory builds - so they need to sell them through active means (sales lots, phone calls to reservation holders, emails to interested parties, etc.) A lot of 90D movement (clearly seen in Norway registrations) indicates discontinued cars may have been offered at helpful discounts.
The quarterly voting here tends to end with actual numbers near the lower edge of the bell curve, so 24000-24500 is most probable.
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I'm infamously bad at these predictions. But I bet on the low end: I think they'll have visible Osborning and minimal model 3 deliveries. To be clear, I think this is irrelevant on the 6-month time horizon because I think the buzz on Tesla in Q4 will shift a huge number of S / X, and the Model 3 ramp up will go well in Q4.
ValueAnalyst
Closed
"visible osborning" is contrary to management commentary during the most recent earnings call. In addition, search data indicates significant increase in Model X demand throughout 3Q. Further, as small piece of the big puzzle as it may be, Norway data shows strong deliveries. Finally, Model 3 deliveries across the country have reached to more than 400, the last week will likely be even stronger, and given the two-week delay between production and deliveries, I expect Tesla to have produced (which is what market participants will be looking for) more than 1,000, which is enough to avoid panic in the shorter term.
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ValueAnalyst
Closed
Thank you for this information.
Could you please explain how you estimated 9,900 Model X deliveries? That seems to be the primary difference between our predictions.
Please keep in mind that the company delivered 10,000 Model X's in 2Q17, the product today is better than it was earlier this year, Supercharger and sales/service center coverage has continuously improved throughout 2017, July's Model 3 deliveries event has dramatically widened Tesla's brand awareness, and osborning will likely be very minimal from Model 3 on Model X. Finally, search data shows interest in Model X is quickly approaching that of Model S.
Thanks in advance. I look forward to your response.
ValueAnalyst
Closed
Given the lack of news that Tesla has started producing Model 3 at higher rates going into the final week of 3Q17, I'm revising my Model 3 deliveries estimate to 1,000.
My new prediction is:
Model S 14,000
Model X 12,500
Model 3 1,000
Total 27,500
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VA, part is viewing the MX decline in "hot" Norway. MX may be of interest, but my main view is Model 3 folks are getting itchy and wanting to get a discounted MS rather than wait for a similarly priced M3 without free supercharging or other aspects. They have seen the smaller back seat and no hatch. The MS makes for a better experience, it seems, at not much more cost. Especially when working deals with the sales staff on loaners or inventory listings.
Bizarre comment.
With a week still to go in Norway, and ~600 cars delivered last week, there is a very real possibility that this will be the best quarter yet in terms of MX deliveries.
With a week still to go in Norway, and ~600 cars delivered last week, there is a very real possibility that this will be the best quarter yet in terms of MX deliveries.
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