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Tesla Motors, Inc. (TSLA) Message Board

  • n0m0renancy n0m0renancy Mar 13, 2013 11:31 PM Flag

    Not Demand Constrained

    At the end of 2012 Tesla had 15,000 Model S reservations. At the end of 2011, they had 8,000 reservations and delivered 2,654 units in 2012, so the net 2012 increase in reservations was 9,654, less than half the production capability at year end.

    At the end of second quarter 2012, the reservation count was 11,500. Tesla reported 2,900 new reservations in the third quarter, but the quarter end count only increased to 13, 200, so the net increase was 1,700 (indicating 946 cancellations during the quarter.)

    Tesla reported 6,000 reservations in 4Q12, but the backlog only increased by 1,800 (from 13,200 to 15,000) so with 2,400 units delivered in the fourth quarter, the net increase in reservations was only 4,200, indicating a near doubling in cancellations from the previous quarter to 1,800.

    Averaging the quarter beginning and ending reservations, the third quarter cancellation rate was ~7.5%: 946/[(11,500 + 13,454)/2)]. The fourth quarter cancellation rate was ~11.5%: 1,800/[(13,454 + 17,654)/2] It seems that the more configuration requests issued, the higher the cancellation rate. They are indeed eliminating non-serious reservation holders.

    Michigan Model’s 3Q12 gross reservation increase was 3,480 vs. Tesla’s official 2,900, or an overstatement of 20%. MM’s increase for 4Q12 was 6,968 vs Tesla’s official 6,000, or an overstatement of 16%. The overstatements are likely because Tesla does not issue continuous reservation numbers, particularly internationally

    MM’s tally of new reservations shows 1,430 for January 2013 and 1,206 for February 2013 implying an annual rate of slightly less than 16,000, BEFORE APPLYING ADJUSTMENT FACTORS FOR OVERSTATEMENTS AND CANCELLATIONS.

    Bottom line: Tesla can run production at full capacity for awhile because of the backlog built up since 2009, but unless net reservations (new less cancellations) increase by mid-year, Tesla will have to curtail production before Model X deliveries begin.

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    • What we don't know is how many of these reservations went through and became a sale. It doesn't look like there is a big backlog at this moment except for some particular configurations. They just need to do a good marketing job to keep the orders coming. It's no doubt an attractive car Tesla just need to make good effort to get the right message to ALL potential buyers.

      • 1 Reply to carlk_120
      • HaHa. "just need to do a good marketing job..." HaHa. If you look back over the last two years at the comments by a scoundrel of the greatest magnitude, a blackard of the worst type, an obvious paid hustler, shillll and scammer, and nay a lie and a cheat of multiple names and configurations that old rogue Ballcoach, you might glean that Tesla hasn't a clue as to how to go about selling cars. Just my humble impression from having read his comments.

    • Here's my thumbnail calculation for the order backlog. The backlog of non-red 85 kWh's is essentially zero. If 60% of reservations are 85's, then there is still a backlog of about 1550 non-red 60's and 40's. Add to that about 600 reds for a total US backlog of 2150. In Europe, there have been 3770 reservations. Assuming a retention rate of 75%, it brings the total backlog to 5000. So how long will it take to work through the backlog? New reservations are coming in at 280/wk. Plant capacity is 400/wk. So the backlog gets consumed at 120/week That takes us out to the end of the year at full capacity. Not sure whether this is cheerleading or bashing.

    • If orders could be filled in, say, 6 weeks what do you think that would do to the reservation rate? Tesla has been very good at guerrilla marketing, particularly to the people who can afford to buy the product. Do you think well done advertising will do anything to the reservation rate? Why do you guys use past results of a ramping company to forecast that that state of development is permanent, especially since it appears not to be?

      It might be to Tesla's advantage to tweak the Model S in appearance and equipment to produce variants in keeping with a high end car also at minimal expense. Some of the functional variations required for different markets should be possible in software. Tesla should be able to produce language/character set variants including Chinese more cheaply for national markets than other manufacturers, again because it's all software, both screens.

      I don't know how successful Tesla might be, but I wouldn't bet against them either. An established ongoing company is highly susceptible to financial DD, something like Tesla is a wild card with the reservation that one has to survive today to be here in some tomorrow. That is, it's more speculative than an established dog biscuit manufacturer. There are ghosts of startups around here that were good ideas as well as not so good but didn't make it. A famous flameout, Trilogy, sounded like a great idea but they couldn't build it (a mainframe on a wafer). They even had a mahogany row.

      Thanks to the Roadster, Tesla has escaped a whole class of problems. Their original insight that one could make a better car by being electric has remained valid. They apparently took a beating on the "make" part in spite of all the experience they hired, though we don't actually know why. If that's behind them it becomes difficult to make forecasts of numbers and citing four or five significant digits in forecasts is nonsense apparently included to lend bogus verisimilitude to them.

      • 1 Reply to maguro_01
      • Mag
        "Why do you guys use past results of a ramping company to forecast that that state of development is permanent, especially since it appears not to be? "

        Because Tesla doesn't give us present information.
        (And the universe doesn't give us future information.)

        " Their original insight that one could make a better car by being electric has remained valid."
        In some ways yes, some ways no.

        "They apparently took a beating on the "make" part in spite of all the experience they hired, though we don't actually know why. If that's behind them it becomes difficult to make forecasts of numbers and citing four or five significant digits in forecasts is nonsense apparently included to lend bogus verisimilitude to them."

        The crux of it is "If that's behind them" some think yes some no.
        P.S.
        I'm impressed. I'm not sure how long its been since I've seen 'verisimilitude' in a sentence.

    • I wonder what they will do when they capacity exceeds demand. IE, they start stacking them up somewhere. They have no dealer lots.

    • However you want to spin the reservation numbers they have a butload of reservations. i doubt if any other car company has half its 2013 planned production pre-sold. I don't see any way to spin these numbers into a negative.

    • why do you think the rates of the entire year will match the notoriously slow months of Jan-Feb? I'd think Q4 reservations would be higher then Q1.

      If they had 15,000 reservations going into 2013, and they got 2600 new reservations so far 2013, that puts them at 17600 reservations subtract 10% cancellation rate 16000, that means they only need 4000 more reservations (after cancellations, 4400 before) to sell out for 2013...no? (approximate numbers used).

      Sentiment: Buy

 
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