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Website wait times for delivery change
- Thread starter Chickenlittle
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It may well be that Tesla's uncovering of the distorted picture of current demand in China took Tesla's view of 2015 Model S sales from comfortably 50K+ it looked like in early November 2014, to 40-50K now. As a long-term investor, this has no impact on me as even the low end of the range in no way disrupts Tesla's opening to sell millions of vehicles per year in a decade when they have multiple manufacturing plants and multiple vehicle offerings in the heart of the consumer market. Remember, at the time Model S deliveries began, Tesla's ambition was for 35K global sales per year... of Model S and X combined.
So how do you conclude demand is not picking up? If you go by lines on the order tracker here at TMC it has doubled. If you go by website wait times maybe you will say that it is down but maybe production is up more than Tesla guidance suggests. In any event, Elon basically said production would remain at these levels and then double in Q4. I would predict there is more than enough demand to get through Q3 and then in Q4 it all depends on how the Model X launch goes. There is plenty of pent up demand for the Model X.
That's fair to say. Then what's the SP anticipation at that time with 35K combined model S + X demand? I'm not saying current Model S demand isn't steady or strong compared to a few years ago. But it definitely fall short the "hype" expectation, you can check what DaveT, Vigrin's crazy prediction in 2014 as an example.
FredTMC
Model S VIN #4925
Let's put aside model X demand, those demand can't be materialized until late Q3. Q2 production guidance is still around 1k/week which is the same with Q4Q1, but we didn't see model S wait time increased to reflect demand increase. Also Telsa didn't disclose order backlog in Q1 shareholder letter, that's the signal the end of Q1 backlog is less than 10K compared to end of Q4 for model S.
Maoing, at that point in time, the share price was based on a binary view of Tesla either rising to success or circling around the drain of bankruptcy in early 2013, with varying estimates of the probability of each scenario. Today Tesla's price is most largely based on estimates of Tesla's level of success circa 2020 with the Model 3 platform, and then to a lesser extent 2025, estimates, and then to a lesser extent, about near-term events, some having possible material impact on the business, most being nothing but noise. That is, for a year and a half, estimates of 2020 outcomes (and to a lesser extent 2025 outcomes), have put Tesla in the $240 range (consistent with the average one year price target of ~$270), while short-term events have moved it +/-$50 from there.
Electrifying
Member
Could you proofread your post for proper English so it's easier for us to understand ? It took me a while to figure out you were trying to say " It has really puzzled me that 70D is such a great product but even that could not propel the demand further to a parabolic growth trajectory". Normally I hate to be a grammar nazi. But too many of your posts contain such errors.
chickensevil
Active Member
I don't think English is his first language. The nuances of grammar and the English language is so hard that people with English as their first language have a hard enough time using it properly, I tend to cut people a wide berth of slack, especially in a forum like this where many people weren't born and raised in an English speaking country.
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We all are hoping for a number that finds itself comfortably north of the Mercedes S Class (that is, over 60k), and I think that is still obtainable. But I wouldn't read into wait times being an issue too much. Elon has said they have many different levers they can pull to stimulate demand should it be needed and we still haven't seen them resort to advertising in a traditional sense. Elon has also said that his target wait time is to get it to be measured in weeks, not months, so I think 6 weeks is a decent metric.
One other thing I would point out that they have *finally* started doing in full force, is pushing orders out in a steady stream instead of piling them all up. We really have seen this happening in Q2 (although to a lesser extent is was happening in Q1). This is bringing wait times down across the board and making for a more consistent delivery. It should also fix the customer complaints from those pesky end of Q pushes.
What this means, we might actually be able to start getting a more *true* estimate of the backlog instead of some crazy high number that was based on flawed assumptions. If they are truly pushing orders out as they come in (or mostly), and not batching by region anymore, then this could make it easier to take: wait-time X weekly production = total backlog. If that is the case, then worst case would be 6,000, which is still not bad, given that there is a looming new product coming out which many people think there is going to be additional changes on the Model S front from. So if I were in the market for a new Tesla, I would be waiting to buy and this could be contributing to some of a drop in immediate demand (if there is indeed a drop).
More likely, they haven't fully finished with the whole "end of quarter" pushes, and some of the decrease in wait times is caused by them shifting sales to favor US... again... as we get close to the end of the quarter. Keep in mind a couple quarters ago I seem to recall wait times falling under a month for the US if you ordered a Performance version and lived in the US. So it could very well be that we are still getting some of that affect starting to show up where they will keep allocating to the US for as long as they can get away with it. I wouldn't be surprised at all to see us hit June and have US June Delivery as an estimate.
Bottom line, while the change to even out the deliveries over time should help us with estimating backlog, I don't think we are quite there yet to gleam any real concrete data on the backlog. And note: Tesla not disclosing the backlog doesn't mean anything. I got the feeling that they did it in Q4 to quell concerns over demand issues. There wasn't really a whole lot of talk about demand in Q1 (or lack thereof) so they likely didn't feel the need to say anything.
I was supercharging at the factory last friday, and got an impromptu tour. I've seen it twice before, once when it was launched, and once with Teslive, in operation. Nevertheless it was completely stunning to me to see it last friday. The cars now move along, nose to tail, suspended from the roof on a monorail type thingy. There are more robots than anyone could count. They name the big ones, but even with the Avengers and X-men they're running low on new names. Anyway, I can't remember what I can and can't say, so I won't say any more, except even if you've seen it before, take every chance to see it again.
Oh, yeah, I remember why I was writing this. As Chickensevil sort of said above, the factory now flows much more than it used to. Therefore the cars flow too. They don't need the end-of-quarter rush any more, and except for operating longer hours and introducing more efficiencies, it probably wouldn't mean anything.
And my stock in Kuka (KUKAF) is doing OK. Apparently they're sold out for the next year or so. It doesn't surprise me one bit.
Oh, yeah, I remember why I was writing this. As Chickensevil sort of said above, the factory now flows much more than it used to. Therefore the cars flow too. They don't need the end-of-quarter rush any more, and except for operating longer hours and introducing more efficiencies, it probably wouldn't mean anything.
And my stock in Kuka (KUKAF) is doing OK. Apparently they're sold out for the next year or so. It doesn't surprise me one bit.
You absolutely can't make this assumption (regarding the demand). We've discussed this before. Since Tesla updates site with iteration of 1 to 3 weeks, the information on the backlog is accurate only on the day the wait time changed from the previous prediction. With every passing day this prediction becomes inaccurate, and becomes accurate again on the day it is updated next time. Additionally, you have to consider wait time across all regions, as only this information gives a true information on the factory backlog and demand.
The last time US delivery was updated (to late June) was on 04/29/2015. Conservatively assuming that late June is the beginning of the third week in June, the wait time was 7 weeks for NA, and at least 11 weeks for the rest of the markets. Assuming about 50-50% split between NA and the rest of the market, the overall wait time was about 9 weeks.
Based on the updated wait time tables (I did them on Sunday, but did not have time to post), the wait time is more than 5 weeks for NA, and about 13 weeks for the rest of the markets. So the average now is more than 9 weeks.
The other part of the equation, of course, is current production rate of the factory, which could be higher than what it was at the end of April.
Once again, you can't made conclusion on what demand looks like after the introduction of 70D. It seems that you are cherry picking data to fit your narrative.
Another thing that you seem to ignore is that Tesla did not ever mention that they have expectation of having MS demand higher than 50K/year. The other 50K/year is (quite conservatively) projected to be for MX. This producing total demand of 100K of MS/MX per year. One thing to note is that almost all of the analysts PT heavily discount this 100K/year in 2016. The only PT that considers 100K/year, as far as I know, is from Stifel - $400. The bottom line is that your implication that current SP "needs" demand higher that is currently observed, is really off the base. All of this, of-course, is even before we start talking about energy storage.
The sky is not falling...
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Truly convincing and very specific line of argumentation
BTW, my screen name is misspelled: there is no "i" between V and g.
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sundaymorning
Active Member
You absolutely can't make this assumption (regarding the demand). We've discussed this before. Since Tesla updates site with iteration of 1 to 3 weeks, the information on the backlog is accurate only on the day the wait time changed from the previous prediction. With every passing day this prediction becomes inaccurate, and becomes accurate again on the day it is updated next time. Additionally, you have to consider wait time across all regions, as only this information gives a true information on the factory backlog and demand.
The last time US delivery was updated (to late June) was on 04/29/2015. Conservatively assuming that late June is the beginning of the third week in June, the wait time was 7 weeks for NA, and at least 11 weeks for the rest of the markets. Assuming about 50-50% split between NA and the rest of the market, the overall wait time was about 9 weeks.
Based on the updated wait time tables (I did them on Sunday, but did not have time to post), the wait time is more than 5 weeks for NA, and about 13 weeks for the rest of the markets. So the average now is more than 9 weeks.
The other part of the equation, of course, is current production rate of the factory, which could be higher than what it was at the end of April.
Once again, you can't made conclusion on what demand looks like after the introduction of 70D. It seems that you are cherry picking data to fit your narrative.
Another thing that you seem to ignore is that Tesla did not ever mention that they have expectation of having MS demand higher than 50K/year. The other 50K/year is (quite conservatively) projected to be for MX. This producing total demand of 100K of MS/MX per year. One thing to note is that almost all of the analysts PT heavily discount this 100K/year in 2016. The only PT that considers 100K/year, as far as I know, is from Stifel - $400. The bottom line is that your implication that current SP "needs" demand higher that is currently observed, is really off the base. All of this, of-course, is even before we start talking about energy storage.
The sky is not falling...
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Truly convincing and very specific line of argumentation
BTW, my screen name is misspelled: there is no "i" between V and g.
Thanks for refuting the same ole rinse and repeat one trick pony, V. God bless.
No. Guidance is for 12500 cars this quarter or a production slightly below 1000 cars/week. Taking holidays into account we are probably on the same 1000 car/week schedule we've been on for (roughly) the last 6-7 months. With wait times relatively steady I think Tesla has found the sweet spot where production capacity and demand are well balanced.
When looking at the TMC spreadsheet and other postings, the first week of April looked like a slow week(ie. very few "Started Prod"), similar to first week of January. It could be a week of production of cars for say China or other non-english speaking countries who would not share here on TMC.
So, production per week is possibly higher than 1000/wk, for weeks worked, given a start-of-quarter week off which is typical in the auto industry. I think July may have the same if not possibly slightly longer for the holiday - a nice break would be July 1-10 to help setup for final preparation for MX production. Did anyone have a factory tour during Apr 6-10?
So, production per week is possibly higher than 1000/wk, for weeks worked, given a start-of-quarter week off which is typical in the auto industry. I think July may have the same if not possibly slightly longer for the holiday - a nice break would be July 1-10 to help setup for final preparation for MX production. Did anyone have a factory tour during Apr 6-10?
Gerasimental
Member
Hey, I was living about 2 minutes walk from you last summer and possibly will do so again this summer :smile:
I think vgrin's point that the website only updates occasionally and is necessarily inaccurate between updates, along with the increased production pretty much sorts this out.
Maoing, you were complaining not long ago that production was too low, as in well below 1000/wk, (I believe your argument was that production was being held back to create the illusion of high demand) but now are claiming that production is now not up from Q1Q4 (and are therefore arguing the non-increase in NORTH AMERICAN wait times indicates weakening demand) when we know it's at 1000/wk. You can't have it both ways.
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