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It's not really bad overall. Many things could have led to this. Could have been logitical issues delivering, could have been timing of production for these specific models. could be that some of these that are listed "in inventory" could have required some rework, so were not available to be delivered to a customer yet (frankly, I could totally imagine this amount remaining in this category at this point). Could be many things.
I think a short will try and make the point that for a truly interested BUYER, in the USA at least what with the 7500$ federal tax credit going down 50% TOMORROW, they should have could have most likely found buyers for these cars (not assuming ones that need rework) and so it COULD be an indication of more muted demand at this specific point in the YEAR, Car Release cycle, geographically, etc.
I'm not really concerned with it, but I can see how others could make an argument that there should be at this point on THIS day, basically SOLD OUT signs across the country - and there are not.
BOBTHEJOCKEY
Member
I am very bullish on the company but when I see something that doesn't make sense I ask questions so that maybe I can learn something. I am just starting to learn how to use this website. It's a lot better than arguing with my financially idiot friends on facebook.
mickificki
Member
Fred's a very very special person.
BOBTHEJOCKEY
Member
We don't know how many cars are left unsold. The whole I heard from a guy routine get's old...but it does move the SP...short term anyway.
I guess my point was that it is not bad. This is another ridiculous Tesla being held to a different standard item. Any other auto manufacturer would be thrilled to have so little inventory. Three days of production in inventory is nothing. As you rightfully point out, there are many possible reasons why there is inventory. Just very frustrating at times how absurd the info cycle is on Tesla, and how items that would not even be reported for other car manufacturers become breaking news for Tesla. Oh well, just another “normal” day for Tesla I guess.
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I'm not a supply chain expert, but if I compare this to auto industry benchmarks mentioned before, this is a really good number.
Plus, if I apply common sense per which this is most likely less than 5% of the total deliveries, and it's not inconceivable that every 20th delivery appointment has been moved or cancelled due to people's plans changing (grandma going to hospital, just not showing up because it wasn't urgent as their tax situation wouldn't allow for the full 7.5k credit anyways, not getting together the money, or or or), this can hardly be bad news.
That is, as long as you're not Fred after having realized that bad news generate more clicks on my awesome "news" site than good news.
engle
Member
Sharing my reply to Anton Wahlman on SA. Normally I ignore him, but his post was so lame so I decided to reply this time.
Tesla Offers To Forgive Your Lease Payments If You Take Delivery By Dec. 31 - Tesla, Inc. (NASDAQ:TSLA) | Seeking Alpha
"Hey Anton!
Your short thesis is sure getting a lot weaker, which makes me, even more, Uber(pun-intended) bullish on TSLA!
You attend "new vehicle launches, press conferences, and industry events", with free hotel and F&B paid by the companies trying to play "catch-up" to Tesla or be disrupted, possibly even put out-of-business.
Of the "Kia Niro EV: Early January; Kia Soul EV (230 mile range version): April; Audi eTron: January; Nissan LEAF (230 mile range version): June; and Mercedes EQC: June in Germany", without even looking at these new offerings, I would guess that the Kia and Leaf are ugly and wouldn't bother to check them out. Personally, the Kia and Leaf brands don't appeal to me and never did before Tesla, either. I used to drive Mercedes, starting with my 1983 380sl Roadster, which I still own. Audi is made by the criminal Volkswagen enterprise, so I would not consider that, either. I would take a look at EQC and compare the specs to Tesla.
As far as buying out the customer's lease for customer loyalty that is standard in the industry among Mercedes, BMW, and the rest. I did that with some of my Benz's, too, so it is no big deal that Tesla is also smart to do it. Remember, Teslas have higher resale values than all the others. Tesla gets a new sale at high margin, plus they get the lease return back 5-6 months early to re-sell. On 9/28/2018, I returned a 2016 Model X P90D early that was due 3/28/2019. It saved me ~$12K in monthly payments (including sales tax). I bought a new Model 3 Dual Motor when the Performance model I was supposed to get was unavailable. Tesla still did the ownership loyalty deal with me, saving me $11K for Dual Motor instead of Performance.
Doing things like that to accommodate your customer when you make a mistake is fantastic goodwill and builds a customer relationship for life, not just with me, but with my son and relatives, too. One of my cousins and her husband just bought "hers and his" Model 3's, for example. My 66 y/o DDS friend bought a Model 3 exactly like mine last weekend. I even let her test drive MY CAR so she would qualify for the 3-day return policy by not test driving Tesla's car. I spent several hours with her teaching her how to use the touchscreen and drive her EV. Would I have done that back in the day if she bought a Mercedes from a stealership after she saw mine? Are you kidding? No Way!!
What you and the other TSLA bears always fail to appreciate is the extremely high customer engagement and support of the Tesla Brand, and the viral nature of Tesla sales. Tesla is recognized as the clear technological leader in EV's with an eccentric genius named Elon at the helm. Now we also have Larry on the BOD with his ~$1B in stock -- totally aligned with shareholder's interests.
2019 will be a banner year for TSLA, no matter when the Model 3's arrive en masse on Europe's shores. I predict that TSLA will trade above $450 sometime in 2019 and may even reach $500/share by the end of the year. There are multiple catalysts that will move the stock higher next year."
Tesla Offers To Forgive Your Lease Payments If You Take Delivery By Dec. 31 - Tesla, Inc. (NASDAQ:TSLA) | Seeking Alpha
"Hey Anton!
Your short thesis is sure getting a lot weaker, which makes me, even more, Uber(pun-intended) bullish on TSLA!
You attend "new vehicle launches, press conferences, and industry events", with free hotel and F&B paid by the companies trying to play "catch-up" to Tesla or be disrupted, possibly even put out-of-business.
Of the "Kia Niro EV: Early January; Kia Soul EV (230 mile range version): April; Audi eTron: January; Nissan LEAF (230 mile range version): June; and Mercedes EQC: June in Germany", without even looking at these new offerings, I would guess that the Kia and Leaf are ugly and wouldn't bother to check them out. Personally, the Kia and Leaf brands don't appeal to me and never did before Tesla, either. I used to drive Mercedes, starting with my 1983 380sl Roadster, which I still own. Audi is made by the criminal Volkswagen enterprise, so I would not consider that, either. I would take a look at EQC and compare the specs to Tesla.
As far as buying out the customer's lease for customer loyalty that is standard in the industry among Mercedes, BMW, and the rest. I did that with some of my Benz's, too, so it is no big deal that Tesla is also smart to do it. Remember, Teslas have higher resale values than all the others. Tesla gets a new sale at high margin, plus they get the lease return back 5-6 months early to re-sell. On 9/28/2018, I returned a 2016 Model X P90D early that was due 3/28/2019. It saved me ~$12K in monthly payments (including sales tax). I bought a new Model 3 Dual Motor when the Performance model I was supposed to get was unavailable. Tesla still did the ownership loyalty deal with me, saving me $11K for Dual Motor instead of Performance.
Doing things like that to accommodate your customer when you make a mistake is fantastic goodwill and builds a customer relationship for life, not just with me, but with my son and relatives, too. One of my cousins and her husband just bought "hers and his" Model 3's, for example. My 66 y/o DDS friend bought a Model 3 exactly like mine last weekend. I even let her test drive MY CAR so she would qualify for the 3-day return policy by not test driving Tesla's car. I spent several hours with her teaching her how to use the touchscreen and drive her EV. Would I have done that back in the day if she bought a Mercedes from a stealership after she saw mine? Are you kidding? No Way!!
What you and the other TSLA bears always fail to appreciate is the extremely high customer engagement and support of the Tesla Brand, and the viral nature of Tesla sales. Tesla is recognized as the clear technological leader in EV's with an eccentric genius named Elon at the helm. Now we also have Larry on the BOD with his ~$1B in stock -- totally aligned with shareholder's interests.
2019 will be a banner year for TSLA, no matter when the Model 3's arrive en masse on Europe's shores. I predict that TSLA will trade above $450 sometime in 2019 and may even reach $500/share by the end of the year. There are multiple catalysts that will move the stock higher next year."
What do you do when 100% of your portfolio are your core shares? And any new money you can bring is less than mouse nuts? And swapping to leaps is not possible without market time gap, as your broker enforces shares/options settlement date difference, i.e. will not let you sell shares, buy options on the same day?
It's a rhetorical question, just so you consider that your advice doesn't work for some people that are fully invested
Yes, this is an added challenge if fully invested, but, fortunately, it does not mean the approach does not work.
There are times I am fully invested. I make a disciplined use of margin at those times... to buy trading shares and/or sell puts. The use of puts adds cash to my account, so, while increasing my use of my margin buying power, it actually offsets margin debt, and I tend to pay little to no margin interest on my small to non existent margin debt despite making ample use of these irrational dips for trading (which, fwiw, margin interest can be tax deductible).
Keeping this activity of trading shares/selling puts by use of margin to 20% or less of my buying power, I've not had sleepless nights about my investments. Bear in mind, I'd only max that 20% guideline after a 30-40% drop in the share price, as I buy trading shares/sell puts in steps during selloffs (that is, it's more conservative than use of 20% of margin buying power based on recent highs in the stock).
Wouldnt this be expected going into today? How many states are like Illinois where 0 deliveries were made yesterday because the dealerships arent allowed to be open on Sundays. I would expect that the Tesla stores in Illinois will be delivering cars until they run out or midnight tonight.
Hey you...take your logic and smarty pants talk outta here
engle
Member
As far as Fred's "3 days of inventory" - that is easy to explain.
Besides trying to close as many Tesla sales in Q4 as possible, the company is producing as many vehicles as they possibly can in Q4. They may be doing another "Model 3 Burst Production" right now. I will drive by the outboard logistics lot on my way to the Fremont Delivery Center this afternoon to check it out.
Something I forgot to reply to Anton's post is that while it may be true that (almost) everyone in USA who wants a Tesla is buying it now in Q4 to get the full $7,500 IRS credit, he neglected to mention the viral nature of Tesla sales. All of these new Q4 USA vehicles will generate viral sales among friends and family of 2019 Q1-Q2 models with a $3,750 IRS tax credit. If a buyer is price-sensitive, they can forgo the $5,000 AutoPilot option initially, save their money and add it later if they want it. Since the IRS tax credit does not affect sticker price, it is kind of a delayed gratification situation anyway.
Besides trying to close as many Tesla sales in Q4 as possible, the company is producing as many vehicles as they possibly can in Q4. They may be doing another "Model 3 Burst Production" right now. I will drive by the outboard logistics lot on my way to the Fremont Delivery Center this afternoon to check it out.
Something I forgot to reply to Anton's post is that while it may be true that (almost) everyone in USA who wants a Tesla is buying it now in Q4 to get the full $7,500 IRS credit, he neglected to mention the viral nature of Tesla sales. All of these new Q4 USA vehicles will generate viral sales among friends and family of 2019 Q1-Q2 models with a $3,750 IRS tax credit. If a buyer is price-sensitive, they can forgo the $5,000 AutoPilot option initially, save their money and add it later if they want it. Since the IRS tax credit does not affect sticker price, it is kind of a delayed gratification situation anyway.
EVNow
Well-Known Member
Nasdaq has gone up some 40 points in the last hour from the low point of 6570. In the meantime TSLA has essentially traded around 327/328. So, if Nasdaq were to come back down to 6570 or below, TSLA could lose a few more dollars.
Not an advice
Not an advice
X Fan
Active Member
Headline could be better....ie, Tesla has reduced inventory to less than 3K....
I don’t know. You have to pour it in the top to get it to come out of the bottom. It takes a while to fill the European pipeline before deliveries start coming out of the other end. Since much of the production will go to Europe and China and you won’t see lots of deliveries till February I think January deliveries will be a small fraction of December deliveries. US deliveries will fall off a cliff because of tax incentive reasons and lack of inventory. It will all look much better in February but January will be brutal. This is one time where quarterly reporting will benefit Tesla.
JMHO.
dc_h
Active Member
I’d rather see a bearish John Peterson article than a bullish Tripp article.
My Apple store in western Chicago burbs is packed. Discounted XR likely driver.
Yeah the “Apple is doomed” diatribe was bizarre. Was I reading a TSLA note or an AAPL note?
@Hogfighter, if TMC had a prize for best succinct post, this one would get my vote. What's hard is deciding which of the three paragraphs I like the best.
Burning through cash like an ex spouse is priceless. Thanks!
Singer3000
Member
At the end of q3 Tesla had 8,048 Model 3s “in transit to customers”. So from a cashflow perspective, this seems like quite a positive leak to me. Especially when you consider that a) the average ASP of those unsold units will be lower than Q3, and b) in all probability the like-for-like COGS per unit will also have reduced.
Not much more needs to be said about Fred really. Post-then-think is ok if he’s on his way to a New Years party I guess.
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