Troy Teslike has tracked the Tesla order backlog for years. Something changed massively in December. The order backlog dropped from 190,000 to 74,000. One might think the order backlog would bounce up again as the year went on, since there’s often a rush to buy electric cars at the end of the year, then a hangover effect, and then a bounce back in time. However, in this case, the data and chart go to the end of May and there’s still no bounce. So, what’s the reason for this?
Hi everybody. Based on my calculation, Tesla's order backlog was 75K units on May 31, up from 68K on April 30.
— Troy Teslike (@TroyTeslike) June 20, 2023
Note that these are not official numbers, but rather estimates based on published wait times on Tesla’s website as well as production rate estimates.
As far as why the order backlog has dropped like it has, there may be a few things at play. First of all, Tesla production may have finally caught up to consumer demand for Tesla cars. Without a big order backlog, Tesla vehicles are basically being produced and then almost immediately shipped to buyers. Tesla ramped up production at its gigafactories in Germany and Texas in the past half year, to go along with more incremental production improvements in China and California. Perhaps, without major changes, the production levels Tesla has reached have lined up very closely with new orders. In many ways, that’s good. However, if we assume that’s the case, one does have to wonder how much longer Tesla can see rapid sales growth — until new models like the Tesla Cybertruck and a lower-cost, smaller model (Model C?) bring in a broader, bigger market.
Another factor at play is that Tesla has finally been able to “unwind” much of the delivery wave it has been needed to use since it started delivering the Model S in 2012. Tesla had to plan and implement different rounds of production and delivery to get cars from California to buyers in its three main markets — the US, Europe, and China. Then, when the Shanghai gigafactory got built and production ramped up, that factory could be used for the Chinese consumer market and later on for the European consumer market. Once Tesla made the next step and did the same thing in Germany, it could really start dissolving this complicated logistics system. US-produced cars could largely be used for North America, cars produced at Giga Berlin could largely be sent to European buyers, and cars produced in China could largely be used for China and markets relatively “nearby.” With all three of these factories (as well as the newer Giga Texas factory) steadily producing thousands of cars a week, there is much less of a need for long waits as buyers’ cars are shipped halfway around the world.
Naturally, the second factor is good news, while the first factor is fine for now but presents some concern in that a sudden, unexpected drop in demand could be disruptive to Tesla’s finances. Of course, a longer-term decline in demand would also be problematic, since expensive production equipment needs to recoup its costs. In general, most people expect Tesla to keep growing — in terms of consumer demand, production, and sales. However, the future can surprise, and strong growth is not guaranteed. We’ll see what happens. In the meantime, any thoughts you have on Tesla’s order backlog are welcome down in our comments section. We’re always learning from readers, and I look forward to learning more on this topic.
Featured image courtesy of Troy Teslike.
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