MacGreiner
5YJ
I wonder if they are cannibalizing assembly staff to help bolster the 3 production ?
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Website wait times for delivery change
- Thread starter Chickenlittle
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It is hard to imagine there won't be some disruption of Model S/X at some point with Model 3 coming on line. Having said that, there have been very healthy numbers of VINs being issued (~15K Model S and ~12K Model X/3 month period last I checked) which are consistent with a strong (and possibly very strong) quarter, depending on what happens with production in the next few weeks.
v - the 1050/wk number you state - is that a known production throughput, vin # assignment rate or something else?
For MX, I have vin assignments at an average under 1000/wk or less from Feb-mid May and shot up with an inventory-style burst in mid-May with two 1000 series taking 1,2 days each not associated with any sort of option reveal or supercharger changes. cause of this could be Vin # skipping (ie. Clean Vin) or big big inventory plans. To support the Vin # assignments for Inventory, I will call out "at least" 580 in the 1000 series of 49xxx will be US inventory and that is part of the production you may be seeing. That 49xxx vin # series would have been assigned roughly 4/20 - 4/26. Many 49xxx are easily seen at the https://ev-cpo.com/classic/ site under MX New Inventory for USA - sort by vin.
The spike on the right is not "7000 in a week" it was 1-day to complete 1000 Vin # assignments for 52xxx series and the suspicion is that most if not all is inventory plan.
Using 3x1000 smoothing.
Using 6x1000 smoothing
Finally, for 2017, the average days per 1000 vin # has been 8.14.
Starting with 34999 on 12/22/16 through 54999 on 5/31/17 or so. (20000 over 160 days)
In H1 Q1 was 8.5 and Q2 has been 7.6 inclusive of the "bump" in May.
20000/160=125/day=875/wk MX Vin # assignment rate for H1 (through 5/31/17)
In conclusion, if they are producing 1050/wk then it is building "old vins" or they are having a higher rate at the end of the quarter than the beginning. Overall, we must look "wider" and see what quarterly and half numbers are and is it due to custom orders or inventory production ahead of active selling this summer. Also, as custom orders slow down and customers are satisfied by selling off the lot from inventory, then make more inventory even as custom orders slow. A plant such as Tesla cannot slow down at this point. Inventory ahead of Model 3 could indicate an "all hands on deck" approach to getting Model 3 out in volume and only building custom MS/MX orders in spare time during July - large inventory deployment can satisfy a majority of sales goal. Remember too there is no MS/MX sales guidance given by Tesla yet for H2. H1 is handled, but H2 is Model 3 focused.
Conclusions also can be made that Model X sells well off the lot - people come in and see it and pick up from inventory much like we all have bought new cars from showroom inventory for decades. And the new inventory plan supports this. If inventory sells more cars, then that's what you have to do. I've never been one to impulse buy a $70k-140k car off the lot - but I am sure there are those who do. Lastly, there was a few items posted about Tesla wanting to build sets of non-custom Model 3 inventory and reservation holders could "grab them" to satisfy their reservation rather than making custom orders the way that confirmations get done. The ease of making many of the same cars goes back to the Model-T and higher throughput with less individual optioning can speed the line. The new growing inventory plan for MS/MX could be a way to practice this in smaller scale and opening up the entire inventory database of available cars might be wise for Tesla to do for MS/MX in July into August as the Model 3 focus grows.
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Based on my post just one-up here, I think they intend to blast MS/MX out through end of June and slack off them into July to put a lot of hands on Model 3 production to make sure that comes together well. That's why I think they have a lot of inventory coming - to allow interested buyers to pick from a large inventory base of MS/MX. I would not be surprised to see MS/MX estimate delivery dates jump to August soon. I think a pretty critical unknown is how Model S orders will fare once Model 3 comes out - especially lower-priced ones (75 and 75D).
Ulmo
Active Member
This explains the large push for CPO cars to fill sales with used cars to take place of new ones (huge price floor drop down to 40K from 50K before; expected because of the age of the cars, but it was a big sudden jump (realized in the last week sometime?), and last year, Tesla had been very precious about holding onto its CPOs with large inventory of CPO not even being listed (was the claim)). I wonder how much of this manufacturing and ordering pattern is known to Tesla vs. prudent. Also, putting CPO closer to output path gets them further out of the way of Model 3's (when they start rolling off line) and your Model X new inventory buildup theory as well (such as places to park them before they ship, places to ship them, etc.). It could also help with intermixing movement of vehicles if they do intermix (CPO, new inventory, special & eventually M3) by being able to dispatch sets of movement faster as the sets grow to carriage size. And finally, probably the biggest reason, CPO's and Model X new inventory shipping can be a way to ramp up the channels for Model 3 once they appear. A lot of what you said makes sense with a lot of what Tesla has been doing.
You didn't mention Model S VIN's; if they are not spiking recently, then I suppose they are flooding the channels with CPO (mostly Model S) and Model X (as new inventory) so that stuff that becomes market ready is a healthy mix of Model S and Model X (regardless of source); the choice they had was what type of models to flood the channels with, and they kept balance (but used different sources).
This is obviously the collective "we"; I've never done that. My motto has always been (and should have been religiously adhered to) that I always buy used.
Ulmo, Model S Vin # spiked a while back to create a good amount of pending Vin #s to be built for inventory (graphs below are # (at least) of inventory per 1000 vins by vin and date). Spike was the 193xxx series (1 day) along with I am guessing 200xxx-202xxx).
The used car glut does expand next year - Summer 2016 was rich with 2-year lease deals. Late 2018 will be thousands of incoming off-lease cars going for Model 3 or repeat lease, Model Y reservation, etc. I don't see 2-year leases being repeated this year due to the tightening credit market but you never know. Maybe they will sell $1B in stock to enrich Tesla Finance and self-lease 12,000 cars in Q3.
To get ready for Model 3, I think they had to have a target of building down as many custom orders as possible along with building substantial inventory as well so that the focus is Model 3 in the beginning to do it right. Mess up Model 3 and things get ugly with the stock and positive buyer perceptions really rely on a vaunted stock price. I've worked at a company in the past where people stopped buying their software because the stock price dropped as a primary reason (along with pressure from competitors, of course which caused the stock to drop as well).
I could possibly do research on which models are more prevalent but you can also see counts at ev-cpo.com/classic pretty easily. Most are 75D and even a good amount of 75 (MS) and also 75D MX for the inventory. This seems to be the buffer-zone between higher priced Model 3 and low-end MS/MX. So customers who want to pick from existing inventory have a "reasonable" priced car to buy. They also tend to build a lot of P100D models (S/X) at the end of the quarters - might be to get a quick bunch of cash from the ABL on them for a week or two the close the quarter and then repay it the next quarter upon deliveries of "in-transit" cars. ABL offers 85% of sticker price and the P100D models are priced high but don't cost nearly that much in input parts to build (not much more than a 75). You're paying for thrills with the P100D but not much extra in parts to do it.
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Doesn't really mean a lot. Looking at the VINs Tesla seems to have build pretty much everything up to 20300 and VINs are maybe up close to 206000.
And Model X 55XXX were assigned last week and one scheduled for production next week. We also already see 54xxx inventory cars. So doesn't look like they have many weeks of production to go trough here either.
Maybe they are doing a 2 week factory shutdown then it would make some sense.
And Model X 55XXX were assigned last week and one scheduled for production next week. We also already see 54xxx inventory cars. So doesn't look like they have many weeks of production to go trough here either.
Maybe they are doing a 2 week factory shutdown then it would make some sense.
There has been a steady flow of Model S VINs in Q2 at about a 15K/quarter clip and from @dennis's posts in the Demand thread I see that in Q2 there has also been a 2 and 1/2 week average from confirmation to production start. All in all it looks like a healthy order book going into Q3 without wait times for customers being overly long -- a nice balance. I assume they will have at least a one-week shutdown this quarter as they usually do and possibly longer with Model 3 production coming on line.
Isn't it quite early for such a change? Anyone keeping track of usual quarterly changes? Are people on the left coast also seeing October? Does this mean faster sales or suspended production?
I bookmarked this post by @Troy a while back. Pasting a snippet from it:
The average transit times for each region (from factory to delivery) are as follows:
USA, California, 5 days
USA, Pacific excluding CA, 7 days
USA, Mountain Time, 9 days
USA, Central Time, 11 days
USA, Eastern Time, 18 days
Canada, 32 days
Japan, 41 days
Australia or New Zealand, 43 days
Europe excluding the UK, 47 days
China or Hong Kong, 50 days
UK, 55 days
I created this list by processing a few pages of data from the delivery tracker spreadsheet HERE. I needed this data for the Model 3 Delivery Estimator project.
So very surprised that the dates moved so early.
This change did happen today, as it was late September yesterday.
From 8-K
On August 18, 2017, Tesla entered into an incentive compensation plan (the “ Compensation Plan ”) with Jon McNeill, Tesla’s President, Global Sales and Service, pursuant to which Mr. McNeill will be eligible to receive variable compensation upon the achievement of certain target levels of (i) vehicle deliveries during the third and fourth quarters of 2017, (ii) operational and financial metrics relating to vehicle service performance and costs during 2017, and (iii) customer satisfaction scores during 2017, with an aggregate target payout amount of $700,000. The spe cific target levels pursuant to the Compensation Plan are to be separately determined, and payments pursuant to the Compensation Plan will be made in cash, stock options or restricted stock units.
It very much appears like the reason for the delivery month jump is due to sales. Quite likely that McNeill is doing a terrific job of selling and Tesla wanted to reward him... Alternatively, if production is paused why would Tesla tie his compensation to sales?
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dennis
Model S Plaid
I have been following this metric for 2 years and this is the first time I can remember it moving out of the quarter during the second month. While on the surface it is a bullish indicator, I have been burned twice before when it moved to the next quarter in the first week of the last month. Both times it was because of production issues, not excess demand, and the quarterly delivery forecast was missed.
Another thing to consider is that Tesla most likely fulfills more than half of the S/X purchases now from inventory cars. All of my friends who have purchased in the last 90 days have bought inventory cars. As a result the wait times for custom orders is a less reliable indicator of supply/demand (im)balance than it was over the past two years.
Very valid points.
Just to add to the picture, though, we have two additional developments covered in today's 8-K which seem to further support the idea of accelerating MS/MX sales.
I am cautiously optimistic that this time around the change in delivery time could indeed be yet another sign of the growing demand.
After considering what you wrote, there is an alternative theory that is compatible with all findings so far.
- There is an S/X refresh coming end of Sep. This will lead to some pause or temporary slowdown in production. So delivery dates need to be moved out.
- Tesla wants to flush out it's pretty substantial inventory ahead of it. Not flushing out the inventory leads to a sizable loss of value as refreshed cars come out. Hence tying McNeil's comp to deliveries to motivate him with 700K lollipops.
- Inventory flush actions have become very apparent over last few weeks. Attractive leases. Sales folk trying to sell on the idea of tax credit expiry. etc.
So Q3 deliveries are up in the air as it very much depends on the inventory uptake. This can't be estimated based on VIN counts or custom order delivery dates.
dennis
Model S Plaid
Agree with your theory 100%. The other anomaly this would explain is Tesla's statement that Q3 S/X GM would be negatively impacted by product "mix shift". The need to flush inventory leads to higher discounts and thus lower GM.
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