Tesla expands to EU and Asia

[bwilson4web]

Tesla expands to EU and Asia and the article takes the most negative view ... ran out of customers:

. . .
Tesla CEO Elon Musk dismissed the issue of demand a number of times on that call. “The demand for Model 3 is insanely high. The inhibitor is affordability,” he said. “It’s just, like, people literally don’t have the money to buy the car. It’s got nothing to do with desire. They just don’t have enough money in the bank account. If the car can be made more affordable, they will... the demand is extraordinary.”

So, according to Musk, the problem in the US is pricing. When that’s addressed, the demand will be there, just like it was when Tesla sold about 140,000 higher-priced Model 3s in 2018 during the first full year of production.
. . .​

There is a difference between speculation and having the facts and data. In about six weeks, we'll have the Q1 - 2019 production numbers. In ten weeks, we'll have the financials. We'll also see the big bond payment pass into history. Meanwhile, Tesla continues to tweak and tune their manufacturing.

My expectation is:

1. Steady production for Model S/X - elimination of the 3d shift means more efficient production and improved margins.
2. Increased production of Model 3 - not a huge number but reflective of improved efficiencies. Improved margins will support another price reduction AFTER the Q1 financials are released.
3. Continued growth in utility scale, battery sales.

Bob Wilson

 

[bwilson4web]

Too late to edit this in:

• Slightly lower Model S/X because the 75 kWh versions were given to the Model 3
• Slightly higher Model 3 because it cannibalized the lower grade Model S/X

In effect the overlap between upscale Model 3 and downscale Model S/X has shifted those units to the Model 3. The higher Model 3 margins works.

Bob Wilson

 

[Pushmi-Pullyu]

Tesla CEO Elon Musk dismissed the issue of demand a number of times on that call. “The demand for Model 3 is insanely high. The inhibitor is affordability,” he said. “It’s just, like, people literally don’t have the money to buy the car. It’s got nothing to do with desire. They just don’t have enough money in the bank account. If the car can be made more affordable, they will... the demand is extraordinary.”
​

Well, that's... um... certainly trying to put spin on it, to put it politely!

The fact that all too many people find the Model 3 to be out of their price range for buying a car certainly does affect demand. I'm sure that many, many more people would buy a Rolls-Royce or an Aston Martin or a Lamborghini or a Ferrari if they weren't so expensive, too!

"There ain't nothin' more powerful than the odor of mendacity... You can smell it. It smells like death." -- Tennessee Williams, Cat on a Hot Tin Roof

"I could be great like Tennessee Williams / If I could only hear something that sounds like the truth" -- Elton John, "Lies"

 

[marshall]

Too late to edit this in:

• Slightly lower Model S/X because the 75 kWh versions were given to the Model 3
• Slightly higher Model 3 because it cannibalized the lower grade Model S/X

In effect the overlap between upscale Model 3 and downscale Model S/X has shifted those units to the Model 3. The higher Model 3 margins works.

Bob Wilson

According to Bloomberg, they went for about 4,400 to about 5,400 vehicles a week over the last month. That's a good size increase. If this production rate continues to hold up, maybe you are being too conservative.

 

[Pushmi-Pullyu]

According to Bloomberg, they went for about 4,400 to about 5,400 vehicles a week over the last month. That's a good size increase. If this production rate continues to hold up, maybe you are being too conservative.

Bloomberg isn't a credible source for information on Model 3 production within the most recent four weeks or so. Long term I think they are reasonably accurate, but you only need to read the various notes posted by Bloomberg to that website to understand the most recent figures are always wild guesses.

​

 

[Pushmi-Pullyu]

Near the beginning of the year, I estimated global Model 3 sales for 2019 at between 300,000 and 400,000, and likely closer to 300k. It's interesting that Tesla is now claiming it's going to have the Model 3 into production at the Shanghai Gigafactory by the end of the year -- the claim seems to be for full auto assembly, not just "final assembly" at the Tilberg, Netherlands plant.

But I'm very doubtful of that. New auto assembly plants simply don't get built, equipped, and tuned up for large-scale production within 12 months. Not even in China.

Anyway, I see no reason to adjust my guesstimate at this time.

We can of course expect Tesla to concentrate on sales in Europe and China and other overseas markets, because the pent-up demand for the higher trim levels of the Model 3 in the U.S. and Canada have mostly been exhausted, whereas it hasn't been even touched yet for overseas market. Note that is not saying (as Tesla bashers do) that domestic demand has fallen off a cliff; it merely means domestic demand for the higher trim levels available without lease has plateaued. That's a lot of qualifiers there! And a lot of potential for more domestic sales once Tesla opens up some of those other options, such as leasing and/or selling the Standard Range trim levels.

​

 

[bwilson4web]

Elon reports another 4,000 Teslas headed to Europe. My rough count, each brick are 5x50 ~= 250 and; 4 bricks ~= 1,000 cars.

Bob Wilson

 

[marshall]

Bloomberg isn't a credible source for information on Model 3 production within the most recent four weeks or so. Long term I think they are reasonably accurate, but you only need to read the various notes posted by Bloomberg to that website to understand the most recent figures are always wild guesses.

​

I'm well aware of the limitations and I suspect bwilson is too. However, it's the best estimate that I've seen published.

As bwilson has stated many times, the reported quarterly is what counts.

 

[bwilson4web]

I'm looking at an alternate way to track sales given both Tesla and GM report only quarterly. In contrast, Toyota reports sales on a month-to-month basis:

I was trying to find out which cars suffered from the orders of magnitude growth of Model 3. This turned out to be a hard problem because the Model 3 took time to come online. A lot of non-Tesla sales (including luxury gassers) were suppressed during the ramp up so correlation is nearly impossible. However, the decrease in Prius Prime numbers looks like it was impacted but it was aided by Toyota's neglect. But then there is the curious local peak of Tesla sales every three months.

The local peaks should correspond to the quarterly sales reports. So I'm going to propose a different way to more accurately displaying sales:

• quarterly-to-quarter draw a straight, horizontal line that averages sales across the three months
• when the next quarter comes out, draw the horizontal line
• rotate the previous quarter line to join the preceding line

There will be a gap on the right that can't be helped. However, putting a marker in the middle of each line will make seeing the trend much easier. This should significantly reduce the misleading, quarterly peaks. It will take a day or so to assemble a spreadsheet and graph the effect from July 2017 to current, an example.

Bob Wilson

 

[Pushmi-Pullyu]

Elon reports another 4,000 Teslas headed to Europe. My rough count, each brick are 5x50 ~= 250 and; 4 bricks ~= 1,000 cars.

Are all those cars in the rows Teslae?

It's one thing to say, as an abstract number, that Tesla will be delivering several thousand cars to Europe every month. It's quite another to see ~1000 cars all sitting in one holding area!

 

[bwilson4web]

Bob Wilson