Tesla Completely SOLD OUT (Almost)
Sometimes there is a reason to report on rumors. This is one of those times. There are many rumors swarming the interweb about Tesla and its inventory. And I am going to guess what they mean.
Inventory is products produced but not yet sold — remember that. The most used tool to guess Tesla production has been the Bloomberg tracker. But while stories from the Tesla factories in Sparks, Nevada, and Fremont, California, are about rising production levels to 6,000/week and higher for Model 3 + 1,000/week each of the Model S & Model X, the tracker shows an inviting downward slope — if you like skiing.
The rumor is that Tesla has been producing a consistent 6,000+ units/week of the Model 3 in this last month of the year. Combined with normal Model S & X production of 1,000/week each, that is 8,000 new Teslas each week. The math whiz kids say that translates into another record production quarter. In Q3 2018, the production was just over 80,000. With the weeks starting at 6,000/week and ending with at over 8,000/week this quarter, a production of 90,000 Model S.3.X is a fair, optimistic guess.
Talks about logistics hell are also a thing of the past, and the plan was to get all production to Tesla stores before the end of the year. Early in the month, the US East Coast was favored. In the last days, the production was for the West Coast. You can’t sell cars that are on trailers crossing fly-over country. Tesla’s goal was to have the absolute minimum number of cars as possible in transit at year’s end. I expect the number of cars en route to Europe and China was also supposed to be the lowest possible.
Another story I encountered was about Tesla stores/dealerships/galleries devoid of anything able to move of its own accord, with only the color samples left to help people ordering a new car. Test drives or loaner cars? Nope. They could help a last-minute buyer to lower their tax liability. All gone.
The last rumor that surfaced today was a Tesla inventory of over 3,000 Model 3s in the USA. Wall Street tanked TSLA(!!!), according to some ill-informed shorts. While there was a stock price reaction, it was well within the normal volatility for TSLA, and the stock rebounded to almost the exact same closing price as the day before. But was even $1 drop in share price the right response?
Normally, at the end of a quarter, there’s about 2–3 weeks worth of production “in transit.” That would be 15,000 to 20,000 Tesla vehicles with the current production levels.
Normal inventory = showroom cars (mostly sold) + test-drive cars (mostly sold) + loaners (mostly sold) + cancelled orders (mostly sold) + cars in transit (mostly sold). Yep, the financial analysts who try to decipher Tesla’s balance sheet are going to ask some hard questions about the shrinking inventory line.
We normal people don’t care about the inventory line on the balance sheet. We are betting what will be the inventory at midnight, when the last showroom on the West Coast closes its doors. How many of those final 3,000 will be sold today? How many of the stores that advertised they were staying open till midnight closed early because they were sold out?
My bet is fewer than 1,000 new Tesla vehicles are now in inventory in the USA. And most locations ended up SOLD OUT.
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