Cars
Published in July 3, 2020 |
by Paul Fosse
July 3, 2020 by Paul Fosse
I was browsing the Tesla site at the beginning of the third quarter, noting that new car inventory was very low according to tesla.com and ev-cpo.com. Tesla didn’t run out of inventory the same way it did a few quarters, but they cut it pretty low. Given that they offered some incentives, such as free Supercharging for a year on inventory Model 3 sedans, it appears they put a lot of pressure towards the end of the quarter. [Editor’s note: This article was written before Tesla released its Q2 production and delivery numbers, but is still relevant and interesting to take a look at.]
Tesla Design Studio Screenshots
I thought it was funny that since Model Y is getting a lot of great reviews, including the Wall street journal Wondering if the Model Y is the best car in the world, you can order one from the website and get it in less time than the other three models Tesla has been making for some time. (I should mention that if you’re ever in a rush for the other three models: Model S, Model X, or Model 3, you can select from limited inventory and get a car, but it may not have the options or color you prefer)
I think this issue is because the Fremont factory is supplying cars for the whole world (except China in the case of Model 3) for those other three models. It is normal for Tesla to dedicate all of its production during the first half of each quarter to European, Australian and Asian markets such as Japan and South Korea. If Tesla doesn’t take them to a ship at the beginning of the quarter, it won’t have many cars to deliver in the third quarter, since shipping times are around 30 days. Financially, it’s best to get the money for the cars before the end of the quarter, so that cash balances, margins, and profits are higher while inventories are lower. So, for now, Tesla feels the need to make cars for remote markets at the beginning of each quarter. This also streamlines manufacturing, as loading ports and some other parts are exclusive to other markets (such as right-hand drive in the UK, Australia, and Japan).
Keep in mind that Tesla’s long-term plan is to have production on the three main continents: North America, Asia, and Europe, both to reduce shipping time and costs and to take advantage of local incentives that may only be available to those who manufacture in the area. Elon has also cited the ability to recruit engineering and design talents as another reason to have locations around the world. However, Tesla is not there yet.
So why is this global shipping and delivery routine important in relation to the Model Y’s short wait time? The Model Y’s relatively short wait time is in part because it’s only available in the US and Canada. European and Chinese customers will have to wait for their own factories to produce Model Y for their markets. So after satisfying the order book, Fremont-made Model Y SUVs can be shipped to customers in the US without delay.
That begs the question: Why doesn’t Model Y have a larger order book? I would give the following reasons.
- Tesla has never really promoted the vehicle. When I attended the presentation event in March 2019, the presentation was very smooth and I was really selling the car. Tesla was clearly concerned about the Osbourne effect, in which it was hurting its current sales by announcing a better vehicle that is not yet available.
- The 7-seat version is not yet available. As I said from the beginning, I think it is a key to the high sales of this model. Although there are rumors that the 7-seat version will come out sooner, the design studio still lists the option as available in 2021.
- The standard-range rear-wheel drive Y model starting at $ 43,000 is not available. Similar to the 7-seat version, it may be an older version, but in the design studio, it is listed as “Early 2021.”
- The lease is not yet available. Tesla typically does not offer leases on its vehicles until they have been available for some time and the company needs to generate additional demand. Elon Musk and his team have repeatedly stated that the lease negatively affects Tesla’s finances. I am hopeful that as Tesla becomes financially stronger, it may become less concerned with these impacts and offer leases sooner. I don’t like leases for my purchases, but many do, and it would help Tesla accomplish his mission.
conclusion
It’s pretty simple.It’s a fortuitous situation for Tesla customers in the United States that they can get the Model Y faster than the other Tesla models. I will look forward to the 7 seat version and I also hope my son will make a little more money so I can buy my Model 3 when I get the Y. I will make sure to give him a good price.
If you decide to order a Tesla, use a friend’s referral code to get 1,000 free Supercharging miles on a Tesla Model S, Model X, Model 3 and now Model Y (you can’t use it on Cybertruck yet). Now it’s also worth $ 250 off solar panels or a sunroof! If you don’t have friends with a Tesla, use mine: https://ts.la/paul92237
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About the Author
Paul Fosse Software engineer for over 30 years, he first developed EDI software and then developed data storage systems. Along the way, I also had the opportunity to help start a software consulting company and manage the portfolio. In 2010, I became interested in electric cars because gas was becoming expensive. In 2015, I started reading CleanTechnica and became interested in solar energy, mainly because it was a threat to my investments in oil and gas. Follow me on Twitter @ atj721 Tesla investor. Tesla Reference Code: https://ts.la/paul92237
