Tesla’s Cybertruck pickup truck Unveiled This Evening (11/21)

[bwilson4web]

Calm my friends. A little skepticism does not a Tesla FUDster make. But it does help to include sources when available.

So I paid $6k for 'full self driving' beating the price increase to $7k by one week. But HW 3.0 is not available for installation and due to my hubris, I haven't been driving the car for nearly a month. I'll post the details when the car is back on the road and I've done my 1000 km test.

Am I a Tesla and TSLA fan, sure thing. But we're not seeing anyone dragging the middle ages muck from screeching Alpha here. So let's calm and be friends bringing facts and data with sources. <GRINS>

Bob Wilson

 

[Pushmi-Pullyu]

..."About one in every four Model 3 orders is canceled, Gill said, double the rate from a year ago.". So it was. according to this article, 12.5% the year before and 25% in the period that the article talks about . That appears to be 37.5% to me unless I am reading it wrong.

Say what? You're adding the percentage from one time period to another?

Okay... you've asked me in a civil manner not to be snarky. So let me just say that's not how math works.

Nor would it be correct to average those figures, since those are cumulative amounts. A later figure is always going to be more accurate than an earlier figure, because the later figure will include the latest added reservation amounts and the latest cancellation amounts.

And hence I would like to see some validation for 74%. This CNN article does not provide the validation.

What would be the point? Ultimately that leads back to the numbers Tesla reports, and you've made it very clear you don't trust the numbers Tesla reports, despite the fact it would be a violation of SEC rules to report a material statement which is factually wrong. For example, at one point Elon claimed there were (at the time of the Model 3 "delivery" publicity event) over 500,000 Model 3 reservations, but he had to correct that to 455,000, because not correcting that error would have put Tesla in violation of SEC rules.

I however will say that 74% seems to be very high and, pardon me if I do not buy into it without further evidence.

Perhaps we're talking past each other. I'm figuring from the number of total reservations, accumulated over time, vs. the number of cancellations, also accumulated over time.

Until all the reservations are exhausted, either by conversion to orders or by cancellation, we won't have final figures. Tesla had sold, by August 2019, 276,193 Model 3's. Obviously that is much, much lower than the estimated 550k-600k maximum reservations (not including cancellations) which Tesla had at its peak. The running reservation total has dropped precipitously from that peak, since Tesla is no longer taking reservations (nor needs to) for domestic orders.

So, how are you counting the "conversion rate"? If you mean how many Model 3's has Tesla currently sold vs. the cumulative number of reservations, then quite obviously it's a lot less than 50%. Most overseas reservation holders are still waiting for their chance to order the trim level they want.

But that's not what a "conversion rate" means. It means the percentage of reservations which ultimately get converted to orders, as opposed to those which get cancelled. That's a binary counting method: Either it's converted to an order, or it's cancelled. Those who still have reservations and are still waiting don't count toward the percentage. Did some Tesla basher on Shrieking Alpha perversely just divide the total number of Model 3 reservations by the cumulative total current number for Model 3 sales, and ignore all those who are still waiting for an opportunity to convert their reservation to an order?

It wouldn't surprise me if that's how they came up with such a meaningless low figure. That sort of deception is typical of them.

 

[interestedinEV]

This is getting no where as you refusing to even listen to my reasoning or address the numbers I have crunched. You have not addressed the issues that I have raised but instead putting words in my mouth and misstating what I have said.

Let us just take the points you made

Say what? You're adding the percentage from one time period to another?

Let us say there were 100,000 reservations and in year one 12% were cancelled or in raw numbers 12000. In year two, 24% were cancelled or 24,000. So a total of 36,000 were cancelled, which is 36%. The article clearly says it was double of last year. There is no ambiguity about that.

Ultimately that leads back to the numbers Tesla reports, and you've made it very clear you don't trust the numbers Tesla reports, despite the fact it would be a violation of SEC rules to report a material statement which is factually wrong. For example, at one point Elon claimed there were (at the time of the Model 3 "delivery" publicity event) over 500,000 Model 3 reservations, but he had to correct that to 455,000, because not correcting that error would have put Tesla in violation of SEC rules.

Again, putting words in my mouth and not addressing the facts. Where I have disputed that there were 455,000 reservations or any other number from Tesla? Where have I disputed Tesla"s sales numbers? Tesla as far as I know has never provided the conversion rates (number of reservations that been converted to orders). In my calculations, I have quoted and used the 455,000 numbers. If Tesla has provided a conversion rate, have please show me where they have provided that rate. If they have provided rate, that would be the final word. Your numbers will not matter any more and my estimates will not matter any more.

What would be the point?

The major point of this discussion was that you threw out a 74% number for conversation of the reservations for Tesla Model 3. To be very clear, conversion means how many of 455,000 reservation resulted in actual purchase of a Model 3. I am questioning the 74%. I do not see how you obtained the number, or what the corroboration is. If I say something (as I have), you have been quick to jump and demand some validation or verification of the statement. I am asking to provide the same clear and unequivocal verification of the statement rather than personal attacks.

I crunched some numbers, and I posted both the numbers and my assumptions. My estimates could be wrong but I have provided the basis for estimation. My numbers say about 20 to 30% conversion rate and I am the first one to say that it is an estimate and is most likely wrong. That said, based on my rough calculation, I cannot see it being 74%, but I could definitely see it being higher than 20-30%.

The reason we are taking about this number is to see if there is estimate that could be made for the Cybertruck. If they have about 200,000 orders and there is a 74% conversion rate, then they will be selling about 148,000 trucks to the reservation holders before they start selling it to others. If the conversion rate is say 25%, then they have an order backlog of about 50,000 units after which they will sell to others.

Tesla is shouting the number of Model 3 sales they have from the rooftops, so to speak. You just refuse to trust anything Tesla says, even when it comes to material statements like this.

Again, not dealing with what I said and trying to evade the question. I have used Model 3 sales numbers from InsideEv which should be very close to what Tesla says. I have posted it on this thread. I have no reason to doubt the Tesla sales numbers and at no time have I ever challenged that. Can you please show me where or when I have questioned the sales number? What I said was that if there was really a 74% conversion rate i.e. 74% of the reservation holders ended up by buying the Model 3, Tesla would be shouting it from the rooftops. Again back to my original question, where has Tesla provided the conversion rates?


Now let me say something. Model 3 is a popular car and it is selling very well. Even if they had a 20-30% conversion rate, the bottom did not fall out of the market. Tesla is continuing to sell well, averaging over 12,000 cars a month in the US for 2019. That is a very good number. Once the reservation backlog was satisfied, they continued to find new customers and new markets. The reason why Tesla Model 3 is selling well is that is providing a good price value to the customer.

With the Cybertruck, given that it has stainless steel body, armored glass etc., I have as (@bwilson4web eluded to) a healthy skepticism that they can keep the price point of $39,000 or will actually be able to get it out by late 2021. Now let us assume that it comes out in mid 2022 and is priced at $45,000. Is that failure? Not in my books (Repeat not in my books), that would be pretty impressive as today you cannot get a truck with those specifications at that price today. If they were to come out at $60,000 or somewhere close to where Rivian is, then I would be a lot more critical. In my postings, I have defended Tesla and Elon many times, yet you have ignored each and every one of them.

Again, I am not sure that we will get anywhere. If you can provide me a basis for the 74% number, then you have made your point. If you cannot, I an entitled to be skeptical of that number and of whatever point you are trying to make using that number. Calling me names will not help. Facts will.

 

[Re-Volted]

I was very surprised to read the claim of 200,000 paid reservations in the 24 hours after the Cybertruck Reveal event, given the very large number of comments posted by people hating the design.

If that claim of 200,000 paid reservations within 24 hours is even close to being true, then we can already proclaim the Cybertruck to be a hit! And let's blow a huge Monty Python-style raspberry to all the haters.

Keep going Tesla!

IMHO if they flattened the roof, lose the point on top before production, it would greatly improve the side window, maybe allow a moon roof, and improve the looks. Maybe making demand too strong.


Sent from my iPhone using Inside EVs

 

[Re-Volted]

Elon tweeted 146,000 at 2:54 PM. That's several hours less than 48 hours.

So, not as good as the rumor of 200,000 orders in 24 hours or less, but still more than good enough to show the Cybertruck is already a marketing success!



When did Tesla ever ask $500 for a reservation deposit? It was $5000 for the Model S and $1000 for the Model 3. I don't recall what it was for the Model X.

But that's not the important issue here. What is important, at least to me, is this: I don't understand why those who seem to have an axe to grind against Tesla -- sorry, "interestedinEV"; nothing personal, but that does appear to include you -- keep bringing up the point about "it's only $100". Yeah, so what? $100 is certainly sufficient to separate the wheat from the chaff. It's not like Tesla is claiming that somebody merely clicking on a website to show interest has made a "reservation", as Faraday Future and some other wannabe startups have claimed. Even though it's not a fortune, $100 is still "earnest money", and it's a good way for Tesla to judge the market for the Cybertruck.

To me, as a Tesla fan, the lower $100 reservation fee is a very positive sign, as that means Tesla is no longer depending on getting much in the way of up-front money before putting a new model into production. I regard that as a very good sign that Tesla isn't even remotely strapped for cash; that they now have no cash flow problems.

Trying to paint that very positive sign as a negative, seems very biased to me, and very wrong-headed.

Keep going Tesla!
[emoji41]

I upvoted interestedinEV answer because I agree with your take on choosing $100 for reservations. I'm probably going to be able to afford a $40k rig, but can't float them $500 or $1000. $100 I can do. If they only got 10,000 reservations the truck would be dismissed as a niche vehicle and Tesla consider bailing on the radical version. Hundreds of thousands puts it into the category of "ok, maybe I'm not afraid to join that crowd, even though I don't like the pointy roof"
Must have a little skin in the game though, free reservations are meaningless, no better than "likes".


Sent from my iPhone using Inside EVs

 

[Pushmi-Pullyu]

Let us say there were 100,000 reservations and in year one 12% were cancelled or in raw numbers 12000. In year two, 24% were cancelled or 24,000. So a total of 36,000 were cancelled, which is 36%. The article clearly says it was double of last year. There is no ambiguity about that.

You're right, there's no ambiguity. You've got it completely wrong, period.

According to your argument, if there was a 10% cancellation rate every year for 10 years, then that means nobody at all bought the car -- a 100% cancellation rate. As I said, you can't add percentages!

Usually, when working with fractions (including percentages), one multiplies them to get an answer. But even that wouldn't be correct in this case, since the percentages given are cumulative.

Furthermore -- and let's not mix things up; this is a second problem with your method -- the number of reservations isn't fixed. More accumulate over time, or at least did for some years. I don't know if Tesla is still taking reservations overseas, but they certainly were last year. Since the total number of reservations isn't a fixed number, that's a second reason why adding percentages from two years will give a nonsensical answer.

Tesla as far as I know has never provided the conversion rates (number of reservations that been converted to orders).

I think you're correct that Tesla has never provided any conversion rate. It's been industry watchers that do that. How did I arrive at my figure? Well, I go into that in my next comment, below. But since my figure is pretty close to the number given in the article I cited, I presume they used the same method to arrive at an answer.

If you're using some other method of calculation, then it's possible it might be a valid, if different, viewpoint. But certainly not if it involves adding percentages! If you don't understand why that's wrong, then you need to stop arguing with me and learn more about pretty basic math. Until then, either me arguing with you, or vice versa, is pointless.

 

[Pushmi-Pullyu]

The major point of this discussion was that you threw out a 74% number for conversation of the reservations for Tesla Model 3. To be very clear, conversion means how many of 455,000 reservation resulted in actual purchase of a Model 3. I am questioning the 74%. I do not see how you obtained the number, or what the corroboration is.

To be honest, I don't remember how I figured that. It's been a long time.

Seems to me the correct way to figure it would be the ratio of reservations converted to sales over a given period vs. the number of cancellations over the same period. But since Tesla has only occasionally given us the total number of reservations, and they keep accumulating (or at least they were still accumulating them last year), we can only calculate (or even estimate) the figure for a period in which Tesla choses to disclose (a) the total number of reservations, (b) the total number of reservation cancellations, and (c) the number of sales for that period.

That can't be done any longer, because Tesla is now accepting orders without reservations, at least for domestic orders. So it's now impossible to calculate the conversion percentage. Rationally, we can only discuss conversion percentages as snapshots of the past, when all Model 3 orders came from reservations.

"interestedinEV", you apparently are trying to make the term "conversion rate" mean the percentage of reservations which haven't been converted to an order, either by cancellation or by holding onto the reservation. That's simply wrong, because that would assume all of those still holding reservations will cancel the order, which obviously they won't. If you don't agree, then point to some authoritative and objective source which figures a "conversion rate" in the manner you are claiming it should be figured.

I'm certainly not going to accept as authoritative any blog post or comment from "Shrieking Alpha", or any other site which allows naked short-selling or naked stock-pumping blog posts to be published, unedited, as "articles".

 

[interestedinEV]

According to your argument, if there was a 10% cancellation rate every year for 10 years, then that means nobody at all bought the car -- a 100% cancellation rate. As I said, you can't add percentages!

Usually, when working with fractions (including percentages), one multiplies them to get an answer. But even that wouldn't be correct in this case, since the percentages given are cumulative.

If you're using some other method of calculation, then it's possible it might be a valid, if different, viewpoint. But certainly not if it involves adding percentages! If you don't understand why that's wrong, then you need to stop arguing with me and learn more about pretty basic math. Until then, either me arguing with you, or vice versa, is pointless.

These can be additive if the same base is used. You are using a certain base for a period. What you are saying is that the base is different in a different period. It won't be additive in that case. The article is not clear if the base is original base or not and so I assumed the base remains the same. Now there is nothing in the article that suggests that my assumption is wrong, and in all fairness, nothing that says it is right. So I have assumed the same base and hence it is additive. Now even if the base changed slightly, it will not make a big difference.

So to clarify, if there were 100,000 reservations, 10% were lost were lost first year, so it is 90,000 left, so if again 10% were lost of the 90,000, then only 9,000 were lost. So in the hypothetical case, it would be 19,000 orders that were lost for 19%. If that was the basis of the article, you are right to that limited extent. And that is nitpicking, and will not substantially change facts. In that case it may not purely additive as base is not the same, but as we are talking about a 2 year period, it does not make a material difference. .


So I used 455,000 as the base, which was the number reported by Tesla in March/April 2019.

You apparently are trying to make the term "conversion rate" mean the number sold vs. the total number of reservations. That's just not right, because that would assume all of those still holding reservations will cancel the order, which obviously they won't.

Again, I have not come out with a definitive number, it looks to me that it could be between 20-30% because of various assumptions. The 455,000 was the number in March/April 2018. There could have been reservations after that but they are not counted. There could have been reservations cancelled before they 455,000 number was polished. There were some people who had reservations made before the 455,000 number came out and they may have not converted it into orders even today. I do not know why they would do it, but let us say some might. All those will serve to make percentage lower.

Let me throw out another number. Worldwide till June of 2019, about 255,000 Model 3s were sold. Assuming that all the Model 3s sold world wide From January 2018 to June 2019 were to reservations holders (which is really not a plausible assumption as many have bought it without reservations and reservations were not needed after July 2018, when only 38,000 cars were sold. So it would logical to assume many if not most of those who bought the car after July 2018 were non reservation holders). I hope you will agree that 455,000 was a reservation numbers provided by Elon. 255,000 is a verifiable number. Even with this absurd assumption (that all sales were to reserve ration holders till June 2019), 255,000/455,000 is about 60%, not the 74%. Now you can continue to argue your case, that not all reservation holders have withdrawn the money etc etc. The simple fact is that we have not yet reached 74% of the 455,000 number even total sales even today. Yet you continue to argue. As I have mentioned above there may be some reservations still pending from the 455,000 number but why would someone want to keep it for this long, have their money tied up? As pointed out reservations become unnecessary from July 2018. What would people get by keeping their reservation.

You apparently are trying to make the term "conversion rate" mean the number sold vs. the total number of reservations

No, conversion rate is how many reservations were converted into orders. Tesla had a backlog of 455,000 in March/April of 2018. By July 2018, anyone could reserve a Model 3 and get delivery, so it suggests that many people who were offered a car did not take it. At that time less than 38,000 cars were sold. If I use the 38,000 number as the total number of reservations converted into orders, I would have come up with 9% conversion rate. I did not. I assumed that many people converted their orders even after July and that is why I took between 100,000 to 150,000 which would be well into Feb. 2019. With that I get about 20-30%. May be it was 40%. I cannot for the life of me see it being close to 74%.



You have not provided any basis for 74% number. You and I interpret the CNN article differently. Forget seeking alpha. My back of the napkin calculation says between 20-30% with many assumptions (and you have not looked at my numbers).

I am done arguing as it serves no point, you appear to be arguing for the sake of arguing. The reason why this argument started was the meaning of the 200,000+ orders for Cybertruck. There are some in the media who believe that it is significant, there are others who do not much see into the 200,000+ reservations at $100 a pop.

Here is one that does not see it as mattering much

https://www.msn.com/en-us/money/com...rvations-dont-mean-much----for-now/ar-BBXk32J

I like this article below which takes a more balanced approach. I agree with the article. It acknowledges that while the number of 200,000+ orders is impressive as it shows a lot of interest, it may not mean much to predict the actual buyers. He dismisses the arguments of the Tesla Naysayers but does not buy the cool-aid of the Tesla Cheerleaders. I think the truth is somewhere in the middle and that is too premature to read too much into the number but it cannot be dismissed either.


https://cleantechnica.com/2019/11/2...rvations-≠-purchases-but-they-mean-something/

Most importantly, I think people on both sides are putting too much in their opinions of what the figures mean — or at least it reads like that. I don’t often end up the “moderate” who sticks to the middle of an issue, but I think that’s really the place to be on this one.


Take Preorder Numbers with a Grain of Salt
The first thing to emphasize is that the $100 preorders are definitely not reservations,......


… But They Mean Something!
Despite what I just wrote, preorders do mean something. At the very least, they mean that a ton of people are interested in the Cybertruck.


I am happy to come back to this thread in about 2.5 years time and see what the situation is.

 

[R P]

Geez, you guys sure know how to make a simple matter complicated. The M3 conversion rate has no relevance to what will happen with the Cybertruck. That will all be determined by what the final product will be, and what the competition looks like in 2 years. We don't know that right now.

My son (who got an early M3 reservation and went through with the buy) put in a reservation for the Cybertruck. It was just $100, and fully refundable, so really nothing to lose. If the truck turns out great, and the competition doesn't (incl price for value), he will go through with it, plain and simple. That's what happened with his M3. There was no competition when it came time (there was a year later), and he badly wanted a BEV, so he completed the sale.

Meanwhile Elon Musk gets to use about 2 mil of other people's money again, to keep his company afloat. I thought he might try raise more cash with another stock offering after the qtr 3 beat, and truck announcement. But the stock price has not cooperated the last couple days. Maybe he will announce something soon about the semi. I think he desperately wants to see $420.

 

[interestedinEV]

The M3 conversion rate has no relevance to what will happen with the Cybertruck. That will all be determined by what the final product will be, and what the competition looks like in 2 years. We don't know that right now.

I agree with you. That was my point. I will add one more criteria, What the final cost will be? Can Elon deliver all the features he has promised at that price?