US Tesla Sales Continue Downward Slide.

[ecarfan]

The easiest way to note that Tesla is production constrained is to observe the monthly cadence of deliveries across the globe. If they were demand constrained and they were making inventory sitting on lots (note the overall production numbers), then there wouldn’t be this global 3rd month of a quarter spike. That spike is sometimes greater than the first two months combined. Instead, you would get something more like seasonal trends. Then QoQ and YoY comparisons within a region can make some sense. You can also observe the how deliveries happened after known factory shut downs, like when the AP2 hardware was released and the factory was down for about 2 weeks. Clearly, Tesla is still demand constrained with the Model S and X.

Thank you for that very sensible analysis. One has to look at the big picture to understand Teslas sales numbers.

Since when are US sales the only important metric? You folks aren't the centre of the universe, no matter what your incompetent mentally challenged president says.

So true. The #lyinglunatic is deeply delusional and in my opinion is clinically insane. Not in touch with reality.

I also agree with @David29 regarding the importance of expanding Tesla Service Centers and how that effects sales. I have relatives in London Ontario that I believe would buy a Tesla if there was a Service Center in their city (they have driven my S and loved it). But the closest one is in Toronto, which is a 2 hour drive away. I have advised them not to buy a Tesla based on that. I say that not because I believe that a Tesla car is unreliable or requires more frequent service and repair than other cars. It is reliable and on average doesn't require more service visits. But in the first few years of ownership it is very likely that at least one service issue will come up and two hours is just too far to go.

Over the next five years I believe Tesla will open Service Centers in all major metropolitan areas in the countries they sell in, which I might define as over 500,000 people who are largely middle class and could afford a base Model 3. The company can only expand so fast.

 

[David29]

This all makes sense, but I'm skeptical.

The people who want a dealership nearby may also be the people who get nervous when confronted by a user manual or who expect a battery to make sense in MPG. I hear objections to EVs all the time, but they are usually rationalizations and excuses to obscure the basic fact that they simply do not want an EV. In and of itself, a local show-room is not going sway these people. I presume and hope that time will either educate or kill off these people, but I don't encourage Tesla to run after and try to placate the ignoranti class. When they are ready and motivated, they will seek out enough education to become comfortable with the Tesla way of selling and servicing cars.

This reminds me of a conversation I had at a car show last week with a Nissan employee. He said that a good number of Leaf sales are to municipal governments for use by their employees. It would be a good use case, because the cars get used a fair amount but don't travel too far and typically return each night to a central parking location where they can be charged. So if this begins to happen enough, people who might otherwise ignore EVs will get exposed to them at work, and -- assuming the experience is positive -- will help to "spread the word" and reduce the level of ignorance, to use your term. What I do not know is whether Nissan provides incentives for such sales. It might be an avenue for Tesla to pursue with Model 3 -- get into a fleet sales or lease model that would expose many "ordinary" people to EVs and thus help spread the word and hopefully drive up interest. (Personally, I would like to see electric utilities use EVs as much as possible for meter reading and similar chores where they use light-duty vehicles now.)

By analogy, my first exposure to computers was through school and work. I used several different computers long before the idea of a home PC emerged. Same with "smart" phones. I had a Blackberry for work long before I bought a personal smart phone. I expect that was the case for lots of people who eventually bought PCs and smart phones. So maybe the same thing will happen for PCs....

 

[techmaven]

This reminds me of a conversation I had at a car show last week with a Nissan employee. He said that a good number of Leaf sales are to municipal governments for use by their employees. It would be a good use case, because the cars get used a fair amount but don't travel too far and typically return each night to a central parking location where they can be charged. So if this begins to happen enough, people who might otherwise ignore EVs will get exposed to them at work, and -- assuming the experience is positive -- will help to "spread the word" and reduce the level of ignorance, to use your term. What I do not know is whether Nissan provides incentives for such sales. It might be an avenue for Tesla to pursue with Model 3 -- get into a fleet sales or lease model that would expose many "ordinary" people to EVs and thus help spread the word and hopefully drive up interest. (Personally, I would like to see electric utilities use EVs as much as possible for meter reading and similar chores where they use light-duty vehicles now.)

By analogy, my first exposure to computers was through school and work. I used several different computers long before the idea of a home PC emerged. Same with "smart" phones. I had a Blackberry for work long before I bought a personal smart phone. I expect that was the case for lots of people who eventually bought PCs and smart phones. So maybe the same thing will happen for PCs....

While true, my fear is that the limited range and poor cycle life of the Leaf may hurt adoption. Possibly just as many people would then dismiss the idea of buying a personal BEV due to the rapidly diminishing range of Leafs. Exposing many people to range anxiety of the highest order amongst modern EVs may be counter productive to adoption. Not to mention the poor state of long distance travel due to the compromised choices with DCFC. The Bolt on the other hand would help adoption. As would the Model 3.

 

[McRat]

Since when are US sales the only important metric? You folks aren't the centre of the universe, no matter what your incompetent mentally challenged president says.

Canada keeps moving up as one(?) of the largest producers of high-sulfur oil if not the largest. Canada is producing aboot 0.10 bbl per day per capita. The USA requires low sulfur at the pumps by law. We produce 0.028 bbl per day per person but it's much lower sulfur.

Let's burn the POTUS at the stake with high sulfur Canadian oil!!! That'll clean up the air in hurry.

Then we can claim the POTUS is a racist because burning stakes is a KKK thing! Double win.

Finally, since the POTUS is a male, we can claim he gets more attention than burning females at the stake, and can label him a misogynist too! 3 strikes, and get Hillary in office to sell our US Assets to JPMorgan for 10c on the dollar, with a 5% commission to Hillary's 'charity'. She remembers Charity Begins at Home better than anyone.

The intense desire to staff Wash DC with criminals by the DNC is sickening.

Foreign countries like the DNC because they are easier to bribe. It's not that RNC officials are honest, it's that DNC officials do not care if they are caught as most are amoral and exempt from prosecution.

 

[ItsNotAboutTheMoney]

So increasing the investment in sales and service facilities, and continuing the fight to allow sales where they are now prohibited, will require major efforts and investments to maintain and grow sales volumes.

Serivce centers. Service centers. Service centers. Stores are nice to have, but service centers are really why Tesla sued Michigan.

For cars, a store's function in the Internet Age is to give test drives. But cars are buy once, service many, so people will be a lot more willing to go to extra effort to test drive a car than to take it for service.

If Tesla can win on service centers it'll allow them to take care of a large concern for potential owners.

 

[McRat]

90/10 rule. 10% is 90% of income. It's more religion than business when you spend money to sell Ferraris in Missouri.

 

[schonelucht]

Look at global sales. A sale in Dubai or South Korea takes away a sale somewhere else. Tesla is still production constrained, so looking at a single region doesn't make sense.

I have a hard time accepting that Tesla is 'production constrained' when it produced 3700 cars more than it delivered last quarter. Overall, there are nearly 17000 S/X that Tesla produced but did not deliver. Of that over-production, nearly 12 000 were added the last 15 months. The simple fact that Tesla is able to expand the loaner fleet, the international pipeline AND build up an inventory while keeping average wait times relatively flat speaks volumes.

Tesla is not production constrained on the S/X and it likely hasn't been for at least 12 months.

 

[ecarfan]

I have a hard time accepting that Tesla is 'production constrained' when it produced 3700 cars more than it delivered last quarter. Overall, there are nearly 17000 S/X that Tesla produced but did not deliver

The process of delivery is not instantaneous. Cars built within days of the end of the quarter cannot be delivered to the customer before the quarter ends because of the time required to physically transport the car and then schedule the customer to come in and pick it up at a time that works for the customer and for the delivery center staff. Tesla counts a "sale" as a car delivered to the customer. No delivery, no sale.

 

[schonelucht]

There is definitely quite a wait right now. Today my spouse called Tesla to ask how long it would take to get a custom configured X100D if ordered today. She was told "3 months"!

Sounds like sales staff not really knowing what they are talking about (what's new). Wait time for the US today is 6-8 weeks. See the website and see in the model S order tracker : of the 33 current orders, not a single one has a quoted delivery time in october. In fact more than half of the current orders are already produced and in shipping (18 to be exact and likely more since not everyone updates the spreadsheet). And right now is positively the worst period to order as a Californian customer in terms of wait times.

 

[schonelucht]

The process of delivery is not instantaneous. Cars built within days of the end of the quarter cannot be delivered to the customer before the quarter ends because of the time required to physically transport the car and then schedule the customer to come in and pick it up at a time that works for the customer and for the delivery center staff. Tesla counts a "sale" as a car delivered to the customer. No delivery, no sale.

This is balanced by deliveries produced the last few weeks of Q1 but delivered in Q2. Fact remains that Tesla produced 3700 cars more this quarter than it delivered. The company is not production constrained.

 

[ReddyLeaf]

Perhaps Tesla is purposely slowing US sales, building up an inventory of gliders or partial builds in anticipation of a super sales pulse for the quarter when they reach 200,000.

 

[Uncle Paul]

Elon addressed this earlier. Said that they were finding the new 100 batteries, with the new technology and more power, more difficult to make, and that was slowing down production.
Now they are better able to churn them out, and production should speed up.

In addition, they were working their butts off to get the new Model 3 line finished, and are currently running about 2 weeks ahead of plan.

They have also been fighting the excessive heat at the Gigafactory. Too hot to pour concrete and workers cannot be at full productivity. Gigafactory makes not only batteries, but also motors and power train components.

Cherry picking individual numbers, and crying "the sky is FALLING!" to some feels out of line.

 

[McRat]

Elon addressed this earlier. Said that they were finding the new 100 batteries, with the new technology and more power, more difficult to make, and that was slowing down production.
...

Some with up to $30k discounts in inventory as new or new demo:

Buy a new Tesla today | Tesla

If there is a shortage of the batteries, that is really odd since some of these are 2016's.

 

[SageBrush]

Tesla counts a "sale" as a car delivered to the customer. No delivery, no sale.

I was thinking about this in the context of the upcoming federal tax credit expiration phase-out. In conjunction with Tesla's apparent switch to a Tesla initiated car titling for the owner, a car manufactured within days of the end of the two tax quarter window for a full credit might slip in. The same would then hold true for the ensuing tax quarters of the credit phase-out.

I get the impression that it takes ~ a month to deliver a car after production. That is a lot of cars, a lot of money, and potentially a lot of sales, that Tesla can manipulate into a higher tax credit.

 

[ItsNotAboutTheMoney]

I was thinking about this in the context of the upcoming federal tax credit expiration phase-out. In conjunction with Tesla's apparent switch to a Tesla initiated car titling for the owner, a car manufactured within days of the end of the two tax quarter window for a full credit might slip in. The same would then hold true for the ensuing tax quarters of the credit phase-out.

I get the impression that it takes ~ a month to deliver a car after production. That is a lot of cars, a lot of money, and potentially a lot of sales, that Tesla can manipulate into a higher tax credit.

Well, there are two parts to it:
(1) The counter is based on the vehicle being sold for use in the USA. So, until a customer has gives the final signature and handed over the money it doesn't count
(2) During the transition the amount is based on the quarter in which the title is acquired.

So, to be really helpful to customers Tesla would want to:
(1) Control the final signature to ensure that 200,000 occurs at the beginning of a quarter.
(2) Ensure that title documents are sent as soon as possible when at the end of a transitional quarter. To be _super_ nice Tesla should sort delivery and signature according to the length of time it takes between signature and the state issuing the title.

(In Maine, our 2013 Volt Title was issued 23 days after purchase, but that interval did include the Thanksgiving holiday which would mean the BMV would be closed for 2 days and more of the relevant staff on vacation. I _think_ it would now be quicker. You can expedite the application with a $10 rush fee although I don't think it makes as much difference as it used to.)

 

[SageBrush]

(1) The counter is based on the vehicle being sold for use in the USA. So, until a customer has gives the final signature and handed over the money it doesn't count
(2) During the transition the amount is based on the quarter in which the title is acquired.

Right. That is why I suggested that Tesla take payment electronically and then file for registration/title with the destination state.
I think that would stamp the date, but someone versed in the federal tax credit should be consulted to be sure.

This issue actually came up for earlier this year. I bought an EV in California in December but it didn't reach me until January. However, since I had signed the contract, paid, and the broker filed for title in December Colorado deemed me eligible for the tax credit.

 

[HabitualUser]

That's like saying Apple was worried about iPhone 6s sales in August 2016.

It's more like saying Apple is worried about iPod sales in 2006, right before the iPhone was launched

 

[alevek]

Hummm, looks like somebody else noticed....
Tesla’s stock (TSLA) tumbles as Goldman Sachs claims Model S/X demand peaked

 

[techmaven]

Hummm, looks like somebody else noticed....
Tesla’s stock (TSLA) tumbles as Goldman Sachs claims Model S/X demand peaked

You do know that this peaked Model S theory has been batted around a lot, right?

Here's Paulo Santos from 2014.

Feb, 2014: Evidence Of Peaked Model S U.S. Deliveries Continues To Pile Up - Tesla Motors (NASDAQ:TSLA) | Seeking Alpha

Ever since Q2 2013, U.S. deliveries for the Tesla (NASDAQ:TSLA) Model S have looked like they have peaked. This was confirmed by stagnated U.S. deliveries, Tesla stopping to issue order reports, VIN deceleration and the fact that Tesla projections for future overall deliveries were consistent with continued stagnated U.S. deliveries.

October, 2014: https://seekingalpha.com/article/2605115-who-is-telling-the-truth-elon-musk-or-wards-auto

The gist of my "peaked deliveries" thesis is that deliveries in the U.S. peaked in Q2 2013 and have been lower ever since.

 

[RiverBrick]

Whatever your opinion is on demand for the S/X, It's a lie or ignorance to claim a drop in sales for a single year over year quarter constitutes a "continued downward slide. "

Unless TMC accepts "alternative truths," the title of this thread should be edited.