What happened to the cpo inventory?

[MsElectric]

Not trying to wear a tin-foil hat or anything but could CPOs largely vanishing from the list and replaced with inventory vehicles suggest that Tesla is trying to clear out inventory/showroom cars before the Model 3 unveil which could also coincide with a possible Model S front-end refresh either at the same time or shortly thereafter? Would make sense to have all the vehicles get the new Tesla front-end look since I'm almost positive Model 3 will have the same look as Model X does.

Everything I've observed leads me to believe a Model S refresh is not "imminent." It is at least about 9 months to a year or more away.

I thought we'd see a refresh soon but in between getting Model X production up and the Model 3 design finalized I doubt they'll want to juggle a Model S refresh on top of everything else they are working on. Tesla needs revenue and Model S is what brings them a significant portion of their revenue now. Remember how long it took them to ramp up production back again just after the new seats and the D drivetrain? They absolutely don't want to slow down the Model S production line right now.

Don't expect a Model S refresh until Model X production has ramped up significantly.

Also don't think them listing all these inventory cars on the CPO Web site is such a big deal. Though a welcome change, those cars have always been available in Tesla's internal inventory that you can always browse at a Tesla gallery. I hope what we are seeing now is a welcome change where they list their entire inventory on their Web site so you don't have to go to a physical tesla store to look up the current inventory like it is 2006

 

[henderrj]

Concerning the raft of new cars available for immediate purchase. What if the "refresh" is on the minor end - maybe seats as good as that reported to be in the X, doors with storage, center console as standard. Things along that line. But I see a problem with my theory - it would make sense to dump inventory cars if such a change was imminent but Tesla is not dumping them. They are exactly the price as if custom ordered. Maybe Tesla has finally reached the point where they would like to appeal to those buyers who want to walk in to look and drive out as owners. Thoughts?

 

[green1]

The only explanation posted so far which makes any sense whatsoever, has been the idea that Tesla basically replaced their whole inventory loaner fleet with CPOs and put the inventory cars up for sale. The reason this makes sense is that Tesla can count Inventory cars as "new" and push higher quarterly sales numbers, whereas CPO cars don't count.
Unfortunately for Tesla, this is a one time deal, they can push numbers for this quarter, but it only works for one quarter (2 tops) before they have no "spare" inventory cars to push that way any more. But this is what publicly traded companies are all about, all that matters is the current quarter.

 

[MsElectric]

The only explanation posted so far which makes any sense whatsoever, has been the idea that Tesla basically replaced their whole inventory loaner fleet with CPOs and put the inventory cars up for sale. The reason this makes sense is that Tesla can count Inventory cars as "new" and push higher quarterly sales numbers, whereas CPO cars don't count.
Unfortunately for Tesla, this is a one time deal, they can push numbers for this quarter, but it only works for one quarter (2 tops) before they have no "spare" inventory cars to push that way any more. But this is what publicly traded companies are all about, all that matters is the current quarter.

Can they go onto issuing reports only every 6 months? They'll get more done this way without all the quarterly distractions

This is why Elon prefers to keep SpaceX private...

 

[twonius]

Considering the imminent reveal of the Model 3 my hypothesis is that they're building up some used model S inventory, planning to use the wave of new Model 3 depositors to soak up the coming wave of lease turn-ins from 2013-2014. Considering these cars with options will probably price out similarly to a used Model S it makes a lot of sense, especially when it could be a few years before they take delivery.

Why just take a deposit when you can also make a sale off used inventory (which is often higher margin)?

I guess we'll see in a month or so.

 

[HankLloydRight]

Considering the imminent reveal of the Model 3 my hypothesis is that they're building up some used model S inventory, planning to use the wave of new Model 3 depositors to soak up the coming wave of lease turn-ins from 2013-2014. Considering these cars with options will probably price out similarly to a used Model S it makes a lot of sense, especially when it could be a few years before they take delivery.

Why just take a deposit when you can also make a sale off used inventory (which is often higher margin)?

I'm sorry, but this makes no sense whatsoever.

Again, what does making a $1000 deposit on a M3 that won't be delivered for 2+ years have ANYTHING to do with someone buying a CPO or Inventory Model S today?

You think someone is thinking "hey, while I'm at it, since I'm already making a deposit on a M3 for 2018, sure, I'll buy a Model S now" ???

Does not compute. If those people really want a MS to hold them over, they would have done it already..it's not depending on the March 31st reveal.

It puzzles me how people are trying to link the M3 reveal to every-other-run-of-the-mill business decision Tesla is making with their other lines.

Sometimes a cigar is just a cigar. NOT EVERYTHING TESLA IS DOING IS LINKED TO THE M3 REVEAL.

 

[Skotty]

Just about got my statistics components all working for my own software. Here's a brief look from before/after the Great Purge of 2016.

2/11/2016

Count distinct occurrences of values. -- trim
S85 occurs 144 times
P85+ occurs 115 times
P85 occurs 89 times
P85D occurs 37 times
S60 occurs 35 times
P90D occurs 3 times
90D occurs 3 times
85D occurs 2 times
Average Value -- price
72,860.31

2/28/2016

Count distinct occurrences of values. -- trim
90D occurs 158 times
P90D occurs 73 times
70D occurs 36 times
P85D occurs 29 times
P85+ occurs 29 times
P85 occurs 22 times
S85 occurs 17 times
S70 occurs 9 times
85D occurs 6 times
90 occurs 4 times
S60 occurs 4 times
Average Value -- price
103,740.82

 

[mmd]

The only explanation posted so far which makes any sense whatsoever, has been the idea that Tesla basically replaced their whole inventory loaner fleet with CPOs and put the inventory cars up for sale. The reason this makes sense is that Tesla can count Inventory cars as "new" and push higher quarterly sales numbers, whereas CPO cars don't count.
Unfortunately for Tesla, this is a one time deal, they can push numbers for this quarter, but it only works for one quarter (2 tops) before they have no "spare" inventory cars to push that way any more. But this is what publicly traded companies are all about, all that matters is the current quarter.

I've also been thinking, if this a change brought about by the new CFO, to use CPOs as loaners instead of using new inventory cars. The relatively cheaper CPO cars definitely depreciate less compared to the new inventory cars when used as loaners. Yes, the latest top-of-the-line inventory car awes the owner and may motivate him or her to upgrade to a new one, but it has a cost in terms of higher depreciation of those high value cars. For Tesla owners, even a low end Tesla is probably better than any gas car from Enterprise.
If this is a permanent change, to use CPOs as loaners and try to sell the inventory cars with as few miles as possible to improve profitability, then it could really be an end to the cornucopia of CPOs we had in the past. It remains to be seen, how many CPOs can be absorbed this way. Waiting till end of March seems wise for now.

 

[srthomas21]

Tesla has offered me several inventory Teslas...

It does seem like they are selling off the service/demo cars. I've been offered several different cars with miles ranging from 300 to 3000. They are being sold as new and have discounts attached to them. You can lease them and get all the incentives for them in addition to the discounted price.

I bet they are selling off the loaners/service cars and replacing them with CPOs.

 

[Skotty]

I've also been thinking, if this a change brought about by the new CFO, to use CPOs as loaners instead of using new inventory cars. The relatively cheaper CPO cars definitely depreciate less compared to the new inventory cars when used as loaners. Yes, the latest top-of-the-line inventory car awes the owner and may motivate him or her to upgrade to a new one, but it has a cost in terms of higher depreciation of those high value cars. For Tesla owners, even a low end Tesla is probably better than any gas car from Enterprise.
If this is a permanent change, to use CPOs as loaners and try to sell the inventory cars with as few miles as possible to improve profitability, then it could really be an end to the cornucopia of CPOs we had in the past. It remains to be seen, how many CPOs can be absorbed this way. Waiting till end of March seems wise for now.

This could backfire. The average price for a car in the system went up by roughly $30,000. That increase is roughly equivalent the average total price of a new car in America. Sales will go down. The question is, how much?

SIDE NOTE -- the previous stats I posted are slightly off (I posted results before completing testing of my new software). Each of the counts should be 1 less than they are (oops, started counter at 1 instead of 0). I think the averages are right though.

 

[MsElectric]

This could backfire. The average price for a car in the system went up by roughly $30,000. That increase is roughly equivalent the average total price of a new car in America. Sales will go down. The question is, how much?

SIDE NOTE -- the previous stats I posted are slightly off (I posted results before completing testing of my new software). Each of the counts should be 1 less than they are (oops, started counter at 1 instead of 0). I think the averages are right though.

Those who were looking to buy will just wait until the prices go down to the levels where they were. It seems $50K-$70K is about the sweet spot for a lot of CPO buyers. The CPO inventory will go back up and those $40K and $50K CPO cars will return to the CPO inventory. Tesla is likely receiving hundreds of Tesla trade-in vehicles each month and they will go into the CPO inventory sooner or later.

 

[neroden]

The only explanation posted so far which makes any sense whatsoever, has been the idea that Tesla basically replaced their whole inventory loaner fleet with CPOs

And expanded the loaner fleet. Turns out Tesla owners get very irritated when they get a loaner which isn't a Tesla. It also turns out that Tesla owners don't really care if their loaner is the shiniest and newest Tesla. So this is a move made for customer satisfaction with the service.

and put the inventory cars up for sale. The reason this makes sense is that Tesla can count Inventory cars as "new" and push higher quarterly sales numbers, whereas CPO cars don't count.

Not just the sales numbers, of course. The former (high-specced, new) loaner cars are *worth more* than the CPO cars and selling them makes more money for Tesla. I expect that Tesla's loaners will be "low-specced" CPOs from now on.

They may have to keep S40s and S60s out of the loaner fleet (because people have range needs) and they may eventually have to switch to only having loaners with Autopilot if people get too dependent on that, but on the whole I think the loaner fleet will be made up of low-specced CPOs which Tesla would not realize much profit by selling.

Unfortunately for Tesla, this is a one time deal, they can push numbers for this quarter, but it only works for one quarter (2 tops) before they have no "spare" inventory cars to push that way any more. But this is what publicly traded companies are all about, all that matters is the current quarter.

Yeah, it's one-time, but it's a cash infusion, potentailly.

- - - Updated - - -

Everything I've observed leads me to believe a Model S refresh is not "imminent." It is at least about 9 months to a year or more away.

I thought we'd see a refresh soon but in between getting Model X production up and the Model 3 design finalized I doubt they'll want to juggle a Model S refresh on top of everything else they are working on.

I don't expect a "refresh" of Model S until after Model 3 is produced. We'll hopefully still see work on *fixing the damn bugs* -- getting rid of all those drivetrain noises, and of course fixing the major defects in the software -- and I expect a continued focus on making the car cheaper to manufacture -- but I don't think they have engineering time for a full-scale "refresh". Seatback pockets might show up or something little like that.

 

[Skotty]

I'm going to keep a running stat on the number of CPO cars (and not inventory), and see how it changes over time. Hopefully you all are right and we will see the numbers steadily rise back up.

 

[brianman]

I expect that Tesla's loaners will be "low-specced" CPOs from now on.

Just a quick note: This would be quite a turn from the initial loaner fleet description by Elon on April 26, 2013.

Creating the World's Best Service and Warranty Program | Tesla Motors

Fully loaded Model S Performance 85 cars or Tesla Roadsters as loaners

The best way to experience service is, of course, not to experience service. If your car does need service, then it should be swapped with a car that is ideally better in some or many ways. To this end, Tesla is building a fleet of top of the line Model S loaners. These will not be our basic model – they will be state of the art with all the best features and options.

Nor will this eventually become an aging fleet of overused cars. The Model S loaners will be available for immediate purchase at a price that is lower by $1 per mile driven. If you like the service loaner more than your other car, we will happily trade in your Model S and you may keep the loaner. This ensures that the service fleet is constantly refreshed and gives customers the best optionality.

For an added bit of fun, customers in most markets will have the choice of taking home one of our Tesla Roadster sports cars when their car is in for service. Few experiences are more sublime than driving a beautiful electric sports car on a road along the ocean or through a forest with the top down on a summer day and hearing only the sounds of nature.

 

[green1]

Just a quick note: This would be quite a turn from the initial loaner fleet description by Elon on April 26, 2013.

Creating the World's Best Service and Warranty Program | Tesla Motors

It would, but it would be far from the first time that Tesla has retroactively changed a policy that people expected them to keep their word on...

 

[neroden]

Just a quick note: This would be quite a turn from the initial loaner fleet description by Elon on April 26, 2013.

Creating the World's Best Service and Warranty Program | Tesla Motors

Yep. Honestly I think it would be an improvement, though. And his initial announcement clearly had not thought things through. There certainly aren't enough Roadsters to use as loaners in more than a couple of locations!

Tesla keeps having problems with their loaners being bought out under them, so that they don't have enough loaners, and then they give people ICE loaners from Enterprise, which makes people *mad*.

Tesla doesn't want to have substandard loaners (which is why they'll probably have to keep S60s out of the loaner fleet, and probably eventually take non-Autopilot cars out) but if the loaners are a bit below top spec -- ordinary rather than "P", not optioned to the max -- they are better able to guarantee that everyone who takes their car in for service *gets a Tesla loaner*. And that matters more to the customers, given the number of us who have sworn that we never want to drive an ICE car again.

 

[green1]

Tesla keeps having problems with their loaners being bought out under them, so that they don't have enough loaners, and then they give people ICE loaners from Enterprise, which makes people *mad*.

That was their choice though, there was no need to actively sell the loaners to first time Tesla buyers, they just did that to meet quarterly targets. Had they wanted to keep their original word, the loaners only would have been available for sale to the person who was actually driving it at the time, and their trade in car would fill it's spot in the loaner pool until a replacement could arrive.

Elon's vision was quite do-able, Tesla just chose not to actually do it.

 

[brianman]

Just a data point:
IIRC, I had a 60 loaner at least once. Note that it was something I would have asked for at the time -- just like I have a standing request to take them up on the Roadster loaner option if/when it ever surfaces.

- - - Updated - - -

Elon's vision was quite do-able, Tesla just chose not to actually do it.

I think you've hit on something interesting, so I'll run with it a bit (though it probably needs a separate thread):
(A) When "Tesla using Elon as spokesman" promises something outlandish, I don't really worry if it doesn't arrive.
(B) When "Tesla using Elon as spokesman" promises something possible though not necessarily profitable, it bothers me when they don't deliver.

As an example, I think Lolachampcar was one of the folks that (early on) in the HP discussion was not upset because his napkin calcs told him there was something fishy with 691hp. Thus, being in (A) for that issue made him not as upset.

I think one might argue that more generally that the (A) and (B) camps are often the ones arguing with each other in various threads.

It would be nice if Tesla (via Elon and others) would just promise stuff they can actually deliver -- rather than rely on people filtering everything into the (A) category so they don't get upset.

I don't want them to hold back on cool demos and "thing we're thinking about" but what they put on the spec sheets on the website and what they promise, they should deliver. Period. An example of the cool demos category is "charging snake". While some reacted with "creepy", nobody (so far, AFAIK) has reacted with "OMG they talked about that months ago and I bought a car assuming it would have it within X years and Tesla failed to deliver."

 

[green1]

I think you've hit on something interesting, so I'll run with it a bit (though it probably needs a separate thread):
(A) When "Tesla using Elon as spokesman" promises something outlandish, I don't really worry if it doesn't arrive.
(B) When "Tesla using Elon as spokesman" promises something possible though not necessarily profitable, it bothers me when they don't deliver.

I don't really believe that it's up to the public to have to differentiate. If Tesla promises something, they should only do that if they intend to actually follow through, and they should do so. If it's something that falls in to your (A) category, they shouldn't promise it. That doesn't mean they can't talk about it, but that's like concept cars, people know they won't be as shown, but it's ok, because nobody says "this is exactly what we'll do" The charging snake is a great example, because it's one of those things that he indicated was sort of pie in the sky "someday there will be something" without saying "we're doing this now"
And of course the worst ones are the ones where Tesla actually delivers on a promise, and then revokes it later for some reason, those are the ones that upset people the most.

 

[brianman]

It would be nice if Tesla (via Elon and others) would just promise stuff they can actually deliver -- rather than rely on people filtering everything into the (A) category so they don't get upset.

I don't really believe that it's up to the public to have to differentiate. If Tesla promises something, they should only do that if they intend to actually follow through, and they should do so.

I think you're agreeing here. If not, please clarify.