Website wait times for delivery change

[bonaire]

Well, I'm in Los Angeles and right now I'm seeing February for all Model S models.

I expect heavy Model X production in January. It's time to make the donuts.

 

[dakh]

Elon IS a long-term investor...so am I, and most others on this board - from what I see.

As as for optimization and logistics, I am confident being on the inside, they know what they doing with their math and logic ( objective function ), and I suspect, being on the outside, we don't ! So, second guessing them on these kind of details, from the outside, is futile.

You're such a buzz kill! :tongue:

 

[vgrinshpun]

As a catch-up after the trip without computer access, there were the following updates to the ordering pages:

• Estimated delivery time for all variants of cars in US changed from January to February (2 days after the previous update on 12/12/2014)
• Estimated delivery time for all variants of cars in Canada changed from late December to February (29 days after the previous update on 11/18/2015)
• Estimated delivery time for all variants of cars in Japan changed from March to Late March (15 days after the previous update on 12/02/2015)

As for the discussion on the reasons for NA deliveries being changed by the whole month in just couple of days, I think the it is most likely because Tesla needs to tend to the overseas orders after putting them on back burner during the last month(+) that they apparently worked almost exclusively on NA orders in order to maximize deliveries in Q4.

 

[Quant]

Thanks Vgrinshpun ! Hope you had a great time wherever you were...and your updates here are greatly appreciated. So, thanks again !

Re your discussion above of the reasons my best guess would include all of the following :

1. Yes, TSLA has clearly prioritized NA deliveries and maybe Denmark ( due to sunset of tax benefits and so it's a one time thing ) , putting all other destinations on the back burner until Jan.

2. I suspect TSLA knowing people may ALL still not be available for deliveries the last week of Dec ( since customers don't have such a deadline vs. prioritizing their holiday plans ) did NOT want to take a chance on missing SOME of the late December deliveries, and thereby missing their estimates.

So, I think, for example, if they thought 17,500 as a minimum for the quarter was needed ( or 18 K ), they probably ensured they gave themselves a cushion for misses due to freighting and coordinating actual delivery with the customers. Since, only then can they include it, from an accounting standpoint as ' delivered '.

So, if they planned on this all long, and they did in fact meet their own internal minimum of deliveries , they might just move say 300-500 of the planned cushion, that may have been a safety margin onto Jan 2, 4, 5 etc......particularly IF they planned to shut down S assembly in Freemont for a week in Jan.

In addition, for NA, since this wait time for deliveries are only for the S, for NA in Jan, Feb....X deliveries may be planned to pick up for NA and focus S delivery in 1 Q 16 for Europe and Other markets.

3. So, for 1 Q 16, what TSLA corporate sees a bit more clearly is S + X deliveries, whereas we don't yet have that combined clarity. And I suspect that may hold true at least for March of 2016. So, we will begin to have partial vision Jan- Mar.

4. Finally, I believe the VW scandal, and just seeing more TSLA 's on the road in markets like Suisse, Germany, Netherlands , Norway etc...may already have being boosting overall TSLA European demand...and that's without the X really getting zero visibility in the stores or roads of Europe. So, some of that may also have been going on, which we on the outside cannot see.

5. So, I think the wild card here will be in late March, after Model 3 and Y are announced, along their starting price points and reservations opened up. IF, my instinct is right, I think in late March and April onwards, we may see another boost in demand for both the S and X, after the Model 3 and Y unveiling as some Europeans in Germany, Suisse etc may initially want to get the 3, but within a few months decide to upgrade to the S, for example, just like we saw with the impact of the X in Oct and Nov.

Of course,that's all just based on what we know , and I am sure Elon and the team will surely have other demand boosters , because marketing and product development will always be at work, and will be continuous and dynamic for overall demand and branding.

 

[vgrinshpun]

This is quite crazy - there was another update for the NA estimated delivery time which moved out to the Late FGebruary. Within last week NA delivery estimates moved out by 2 months! I am at loss to adequately explain this. It appears that Tesla backlog is back to about three months, in spite of the record deliveries to be had in Q4. This is not possible without humongous jump in Model S reservations across all regions, severe cut in MS production allocation in order to facilitate very swift MX ramp-up, or unexpected planned shutdown of the MS production altogether, or some combination of the above. This is really intriguing.

 

[Bgarret]

This is quite crazy - there was another update for the NA estimated delivery time which moved out to the Late September. Within last week NA delivery estimates moved out by 2.5 months! I am at loss to adequately explain this. It appears that Tesla backlog is back to about three months, in spite of the record deliveries to be had in Q4. This is not possible without humongous jump in Model S reservations across all regions, severe cut in MS production allocation in order to facilitate very swift MX ramp-up, or unexpected planned shutdown of the MS production altogether. This is really intriguing.

View attachment 104886

Thanks Vgrin....I think you mean late February....late September may be accurate for the X....P90 that is.

so in other words, Tesla is nearly sold out of Q1 - X & S, with the exception of 1 month of North American deliveries. Not bad.

 

[vgrinshpun]

Thanks, Bgarret - fixed the error.

 

[Lesifass]

Thanks for tracking the delivery estimates! I regularly come here to get an update on the current situation and wanted to let you know that I really appreciate your work.

If the current backlog is caused by increasing S/X demand, the Q4 shareholder letter will hopefully give some bull-ish details. Too bad it's still quite a long time until we get to read it…

 

[FredTMC]

Thanks for tracking the delivery estimates! I regularly come here to get an update on the current situation and wanted to let you know that I really appreciate your work.

If the current backlog is caused by increasing S/X demand, the Q4 shareholder letter will hopefully give some bull-ish details. Too bad it's still quite a long time until we get to read it…

Thx for the website updates! guys, it seems obvious to me that the MX backlog is the driver behind the ever increasing wait times

thoughts?

 

[Quant]

Well, this is good news, in my opinion, However, we on the outside, are not playing with a full deck, re overall demand and S vs X overall production capacity and their allocation. It will get more difficult for us to know what's happening with the extra variables due to the X ramp and European assembly line.

i suspect that in about 6 weeks, by the time of the next earnings call, website wait times in NA will probably be late March and all other markets will probably be April or later. That assumes demand stays strong and that the global equity, commodity and currency markets don't all take a sustained dive from here, due to the Fed and the oil supply glut ( as late Jan, Feb and Early March is when oil usually sees its seasonal trough in prices ).

 

[SebastianR]

Firstly, thanks a lot for your great work - much appreciated!

This is quite crazy - there was another update for the NA estimated delivery time which moved out to the Late February. Within last week NA delivery estimates moved out by 2.5 months! I am at loss to adequately explain this.

I think this merely means that they now have the supply chain in order to produce the X. Think about it: if you can produce both cars, then it is only rational to make as much of the Model X as possible & deliver to people who put down their deposit long ago: Some Model X Signature holders have complained that their X70 will only be made in essentially another year from now. You really don't want to annoy these people too much. And 3 months is not really that bad at all. I would actually expect the Model S to jump to some 4/5 months (at least at times) until the X backlog is resolved.

 

[vgrinshpun]

Firstly, thanks a lot for your great work - much appreciated!



I think this merely means that they now have the supply chain in order to produce the X. Think about it: if you can produce both cars, then it is only rational to make as much of the Model X as possible & deliver to people who put down their deposit long ago: Some Model X Signature holders have complained that their X70 will only be made in essentially another year from now. You really don't want to annoy these people too much. And 3 months is not really that bad at all. I would actually expect the Model S to jump to some 4/5 months (at least at times) until the X backlog is resolved.

Well, this is definitely a possible explanation, but once an attempt made to work through the numbers, it becomes quite clear, that there is something unusual going on, as each explanation that I've came up with does not quite work considering the math.

Let's take your example and further assume that for the next month factory will be building exclusively overseas orders (unlikely because they need to gradually shift from the back loading deliveries toward the end of the quarter, but let's assume that this is the case). This means that instead of three months worth of NA orders, Tesla has two moths. Let's also assume that building MX will be heavily prioritized, so that within one month the MS production will go from current 1200 cars/week to just 400 MS/week. This, of course also assumes that MX will be fully ramped up just within one month to about 1200-1400 cars/week - an extremely tall order, but let's assume this just to demonstrate how math does not work even for this extreme case. Let's also assume that allocation of the production for NA orders will be about 60%.

So the above means that within one week the total NA order uptake was 8 x 400 x 0.6 = 1,920 cars, which is equivalent to the yearly rate of incoming NA orders of 96K - crazy high and improbable.

I tried to spin numbers several different ways and math just does not work. There is something unusual going on - this can be explained neither by prioritizing over seas orders, nor by reducing MS production due to prioritizing MX production. Even combination of the above, as demonstrated by the example, does not add up...

 

[SebastianR]

Well, this is definitely a possible explanation, but once an attempt made to work through the numbers, it becomes quite clear, that there is something unusual going on, as each explanation that I've came up with does not quite work considering the math.

[...]

So the above means that within one week the total NA order uptake was 8 x 400 x 0.6 = 1,920 cars, which is equivalent to the yearly rate of incoming NA orders of 96K - crazy high and improbable.

Not sure I fully understand your example. But here goes mine: Let's assume there is one part in the Model X (windshield, seats whatever) that can't be sourced in the required numbers: it makes sense to make a lot of Model S and "anti-sell" the Model X. Now let's assume within a matter of days/weeks this supply chain constraint is lifted (supplier can finally meet quality, supplier is able to ramp up, shipping constraint is resolved - whatever). In this case, it makes sense to ONLY make the Model X since these people have been waiting for long time.

If we assume there are some 20k solid Model X reservations (the reservations numbers over in the Model X forum are much higher than 20k - but let's be conservative), then it makes sense to push all new Model S orders to the "back of the line". This would easily explain a >8 weeks increase in delivery time even if you assume that Tesla only makes Model X at a rate of 2400 a week (which we all know is unrealistic - I know).

In short: I don't think the increase in delivery times has much to do with any order rate but an ambitious attack on the Model X backlog. But I really like the news as to me this is the most credible indication that we will now see the Model X in numbers.

 

[flankspeed8]

Does anyone think that since these cars are all built to order we could ever see dynamic pricing? I wonder if that would even be legal in some states. Makes for an interesting idea in the future to deal with sales/seasonal slumps if they were to ever materialize.

 

[vgrinshpun]

I fully understand your example. In order to see why it can't explain what just happened to the NA MS order wait time, you need to work through the numbers in my calc. Either I am making a math mistake somewhere, or there is something unusual going on... This is a real puzzler.

 

[AlMc]

My quick back of the napkin math:
Assumption (reality??): 1,600 vehicles per week
First 8 weeks of Q1: 1,000 Xs/week for NA=8,000
600 Ss/week for Non NA =4,800
Last 4 weeks: 1,000Xs and 600 Ss all for NA delivery =6,400

Total deliveries and vehicles in pipeline= 19,200

****If my weekly rate is too aggressive substitute an average of 1,400/ week
and the number is 16,800

 

[doctoxics]

Thanks vgrinshpun for the good work. One possible explanation for increasing delivery times, at least in part, is the ever increasing pipeline as Tesla markets increase World-wide. If the pipeline is cleaned out (sold) in Q4, doesn't the refill of the pipeline in Q1 contribute significantly to the increase in delivery times?

 

[Quant]

I agree with Vgrinshpun ....and I just cannot see 1000/ wk of Model X production in either Jan or Feb.

So, that's leaves us with an increased order rate.

 

[bh1783]

I agree with Vgrinshpun ....and I just cannot see 1000/ wk of Model X production in either Jan or Feb.

So, that's leaves us with an increased order rate.

I think another possibility is filling the pipeline. If you look at Tesla's site they just opened a bunch of new galleries in Germany(Leipzig, Dresden, etc.) and they also opened a pop up store in Mexico City.

It's also likely that the factory will be idled the first week of January to give the workers rest(they did that last year).

 

[Spidy]

I feel like everyone is ignoring that Europe did not move and has not moved in those latest updates.

21.10.2015 Europe December => January Website wait times for delivery change - Page 58

05.11.2015 Europe January => February Website wait times for delivery change - Page 58

26.11.2015 Europe February => March Website wait times for delivery change - Page 61

Within a month Europe deliveries moved out 3 months. And now it has been March for almost a whole month.

I think until Europe changes we don't know what the US delivery dates actually mean. They could have some shipment goal they want to reach and therefore allocate a lot of production spots in January & February for European cars.

Maybe delivery time is also a selling factor and they want to even out those more.