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Why is the number of orders then very public and now very secret?

Why is the number of orders then very public and now very secret?

Actually it is more than 4 months since they had 373000 orders.

Would it be detrimental to publish new figures?
Would the stock be too volatile?
Do they need to have the stock escalate following the Reveal #2?
Are they alarmed at the cancellation rate?

Headline: M3 cancellations hit 200000 in 3 months?

What then?

JeffreyR | 18 august 2016

The typical demand curve is not very impressive after the initial spike for most things. So not much to tout. Think of the people that have not reserved yet. Let's say that there are over 500K reservations now. If you have not reserved yet, would it be better to guess there are around 400K or know there are over 500K? If they had a huge rash of cancellations that would be part of their quarterly reports as that would be material to the stockholders. Tesla knows the typical conversion rate from R, MS and MX. So they won't say anything until the next Reveal or there are other big reasons.

SUN 2 DRV | 18 august 2016

Because the trend was very steep and exciting then and now probably very shallow (negative??) and thus boring and not newsworthy.

topher | 18 august 2016

If you knew that there were 1M orders, would you bother?

Thank you kindly.

Blue85DCalifornia | 18 august 2016

Because every announcement of orders would result in a round of negative publicity speculating how badly Tesla will miss promised delivery dates. Tesla is screwed, and they know it, so the less said, the better.

Linemanap | 18 august 2016

Blue are you for real? how in the world can you spin 300k perorders as being a bad thing. Tesla didn't have to ramp up their production time line to get those preorders people put down there money thinking they would get their cars 2019 2020. If Tesla didn't know what they where doing they would have failed years ago like so many experts predicted

johndoe | 19 august 2016

I expect the pre-orders are going up and will be in the vicinity of 1 million. Tesla has nothing to gain by releasing new numbers. Tesla are substantially accelerating their plans, and they would not be doing this if reservations were going down.

jdanielp_uk | 19 august 2016

I would be quite surprised if Tesla didn't announce something when the true number of reservations passes half a million, which I don't think it has yet. I wouldn't be at all surprised if it passes a million prior to any vehicles actually being delivered.

Ross1 | 19 august 2016

Ross | August 18, 2016
More to the point but off topic: how many do they have now?

1 million?

The Princess has agreed with me.
I think. Almost. Sort of. Well.

lolachampcar | 19 august 2016

I'll take a version of Blue's comment.

Tesla announces an uptick in reservations. The news says that is not nearly enough to demand is faltering.
Tesla announces a reduction in orders as some of the speculators fall off the list. The news reports that demand was a hoax and it is not really there.

I agree with Blue in that it is a no win situation for Tesla. Anything they say will be spun into a negative; it is just how it is in Tesla land.

jdanielp_uk | 19 august 2016

It's a no win situation in terms of media negativity perhaps, but any publicity is good publicity... Telsa don't advertise so the more that they are mentioned in the press, even in negative terms, the more rational thinking people will become converts.

Badbot | 19 august 2016

I would not mind Spin Doctors so much if they were forced to sit on a good wood auger before they started spinning.

KP in NPT | 19 august 2016

I agree with the above re: the press - I also don't think we need up to date figures. I would expect a new round of figures after the final reveal, even if it's just to set expectations.

SUN 2 DRV | 19 august 2016

Currently Tesla doesn't NEED any more reservations. They are better off saving their exciting news to drum up more excitement and increase reservations closer to the actual ship date.

Haggy | 19 august 2016

Tesla got plenty of buzz when the Model 3 was announced, not to mention when it was announced that it was going to be announced. That caused orders. Nothing has happened recently that would appeal to the "I'll wait until I see it myself" crowd, and the rest mostly reserved when it became possible. There are likely some who had to save up for it, but without news, there's no driving force.

Tesla was surprised at the volume of orders they got, and some of the orders have turned into Model S 60 sales. So in addition to what's trickling in, there are also deposits being redirected to sales. Tesla wants to convert as many sales as possible to 60 sales, and if it's working well for them, then the reservation count is going down. Publishing it and explaining it away would result in no gain and twisted press taking it out of context. The press would say it's another case of Tesla showing bad numbers and trying to justify them.

johndoe | 19 august 2016

@joehuber
I agree.

TeslaTap.com | 20 august 2016

I also expect they can get another 400K+ orders if they had test drives. Most possible owners are unwilling to consider a car unless they have a test drive. Should be entertaining when that happens too!

Ross1 | 20 august 2016

There are 1 billion cars in the world.
One thousand million.
If one person in a thousand wants a M3, that is 1 million buyers.
If one person in a hundred, that is 10 million cars.
These figures are global.

One quarter of these are in USA.
So if one person in a hundred wants a M3, that is 2.5 million cars.
If four in a hundred, it is 10 million in the US alone.

Back in the day, Ford sold 16.5 million cars.
VW Beetle: 21 million.
Toyota Corolla: over 40 million.
Ford F-Series truck: over 40 million

To put this further into context: Ford F-Series trucks roll out for the USA market alone at about 800 000 per year.

500 million cars have been added to the world since 1986.

So, Model 3 at 500 000 per year? What do you reckon?

Figures from various sites, some from Wikipedia.

How many cars are there in the world?
ARTICLE
PHOTOS
How many cars are there in the world?

by Tim Beissmann New Cars Editor19 Aug 2011
20SHARES
Here’s a good piece of trivia for a Friday. How many motor vehicles (that’s cars, trucks and buses) are operational in the world? The answer…

One billion.

That’s right. According to data compiled by US publication Wards Auto, the world vehicle population topped one billion for the first time ever in 2010.

The milestone was achieved on the back of a 35.6-million-vehicle increase for the year, which saw the global registered fleet rise from 980 million to 1.015 billion.

The 3.6 per cent year-on-year increase (the second-largest in history) was thanks mostly to China’s booming industry and high demand for new cars.

The number of motor vehicles in operation in China skyrocketed more than 27 per cent in 2010 alone, increasing 16.8 million units to more than 78 million.

The massive increase in China accounted for almost half of the global increase for the 12-month period.

China has now overtaken Japan into second position overall in terms of total registered vehicles, with Japan sitting on 73.9 million.

The US still has the largest vehicle fleet by far. Almost 240 million vehicles are registered in the US, although that grew by less than one per cent in 2010.

Brazil enjoyed the second-largest volume increase for 2010, with an additional 2.5 million vehicles on the road. India’s percentage increase was the second-largest in the world, up 8.9 per cent from 19.1 million to 20.8 million.

The number of vehicles in operation in the world has doubled since 1986.

bj | 20 august 2016

@Ross - interesting stats which put the size of the challenge into perspective, but what is your point (if any?).

I think Norway is instructive of the dynamics here. Over the past year, one-third of all new car sales in Norway were BEV or PHEV which is quite incredible. In some months it has been more than 40%. But the BEV/PHEV proportion of the total vehicle fleet in Norway has only just reached 3%, easily the highest in the world. So it's taken about 5 years to swap out 3% of the entire fleet. Now this will accelerate as the percentage of BEV/PHEV sales increases, but even at 100% it will take a further 10-15 years to substantially swap the fleet out, and there will always be a long tail (5-10% who don't change out, for whatever reason).

I'm a huge advocate for EVs and would think it's fantastic if everyone drove one, but it might be 20 years before a majority of cars on the road in advanced economy countries are BEV/PHEV and 25-30 years before we could say that on a global scale, possibly even longer. I hope I'm wrong and it happens sooner. And whether that's good enough to avoid catastrophic climate change I leave to the experts to comment.

Haggy | 20 august 2016

It's not so much how many cars are on the road, but how many will be sold per year in the future. That's estimated to be about 75 million/year. If 3% of the market wanted to buy a Tesla, Tesla wouldn't be able to come close to making enough cars. If 1% of the market wanted to buy a Tesla, that's about 50% more cars than Tesla plans to be able to make if they ramp up to 500,000 cars/year.

The interest is there. The demand is there. Once the cars (M3) are on the road demand will be higher. There will be those who are concerned with being able to charge, or not having a garage, which might rule out 1/3 of the US if you assume that nobody without a house with a garage would buy one. But even if you do that, that would leave 66% of the market, with Tesla going after a fraction of a percent of it.

I expect that demand will outstrip supply for a long time. If it opens up an opportunity for other EV companies, that will drive the demand for EVs even higher.

Ross1 | 20 august 2016

@ bj:
You got it.
But I did pose a question:

"So, Model 3 at 500 000 per year? What do you reckon?"

carlk | 21 august 2016

I agree with @Blue85DCalifornia. Only Tesla needs to know since it's the only one that will make cars for those orders.

bj | 21 august 2016

@Ross - I see your point now. Model 3 at 500,000 per annum is nowhere near enough to make a real dent in changing out the global car fleet. But it's a very good start, by early-mid 2018 there will be more Tesla BEVs on the road than every other car maker's BEVs combined. For any car maker to hold 50+% market share in a given class of vehicle is unheard of. So two things:

1. Tesla ramp up needs to continue over time, i.e. to 1M per year, then 2M then 5M then...
2. Other car manufacturers need to start making proper EVs, and lots of them. Which they will do as Tesla continues to eat their lunch. It's that, or die.

Ross1 | 21 august 2016

Thanks @ bj.

However, housekeeping:
You said: For any car maker to hold 50+% market share in a given class of vehicle is unheard of.
T Model Fords 100 years ago held 90% of the whole car market (and sold either 15 or 16.5 million, depending on whom you believe.)
:)

minervo.florida | 21 august 2016

This is considered to be the greatest product launch in the history of mankind. Over $400 million in deposits and billions in sales and product is 1.5 years away.
NO other car manufacturer ever had anything close, this is just crazy. This launch is changing the car world as we speak.

Consider 75% of the population still knows nothing about Tesla and less about the Model 3.

Elon said he can stimulate more demand with more product info but sees no reason to do so at this time.

See what happens after info number 2, and later after consumers can actually drive the great car.

You haven't seen anything yet.

m3fan | 21 august 2016

Met an influential government politician in rural England the other day, who was very anti-ev and anti-BEV in particular. No amount of logical reasoning would help - not even the success of the M3 even before its available. Its going to take a while before we see radical change in adoption if these influential types are so heavily biased (or bought?) by competing interests.

PeterPlt | 21 august 2016

Fun thread with lots to think about! Two added points:

1. If someone was considering placing an order but wanted to know more about the car/technology/cost, they'd wait for the next reveal. So, we are in a lull. Tesla doesn't need to do anything during that period to prompt more orders because it costs money and will make only a very minor difference.

2. Tesla is almost certainly looking at building more manufacturing capacity (beyond what is already known) east of the Mississippi, in the EU and Far East. So, large numbers of orders/backlogs are needed to press the business case for rapid growth!!!

In the meantime, it sure is fun being part of something special. ;-)

bj | 21 august 2016

@Ross - yes, touché. Perhaps I should have said "in the postwar era".

bj | 21 august 2016

@contact - what was the key reason for him/her being "very anti-ev and anti-BEV in particular"? Losing their big oil donations? They like pollution? They don't like technology change? They don't like any form of change whatsoever, including the date changing every 24 hours?

georgehawley.fl.us | 22 august 2016

Tesla has a boatload of resrvations for the M≡. Everyone on earth knows this.
Mission accomplished. The exact number isn't needed except by production planners.

Ross1 | 22 august 2016

@ bj:
You could have said post war era but you could have more accurately have said "since The Model T Ford...
but since I am starting to sound like....forget it.

sp_tesla | 23 august 2016

"Ross | August 22, 2016
but since I am starting to sound like.."

Your New Zealand friend :)

kjones | 31 august 2016

2020 will be to late for me.
I'm thinking early 2018 at the latest.

Ross1 | 5 september 2016

I would still like to know how many orders they have.

Short story:
Suppose they have a million or more orders already, any slipup , late promises, recalls could have a seriously crippling effect on Tesla.
Read: go to the wall.

ewcontrol | 5 september 2016

Don't forget about the basics of the market economy. It is quite easy to adjust a demand by pushing up the price. Tesla will do it as well as soon as they will feel that the demand is constant at least for number of years.

Ross1 | 5 september 2016

I think it is set in stone as a "$35000 car".
They cant readily change that without being seen as liars.
But they could reduce the spec considerably for the base model.

carlos | 5 september 2016

Because some of us are starting to have doubts about the feasibility of this product. $1000 of my money seating in their bank account does not hurt me in the least, but at some point (after reveal part 2), I may choose not to stick around. Most analysts agree, this company is in very serious trouble unfortunately.

JeffreyR | 5 september 2016

@carlos worried, "Because some of us are starting to have doubts about the feasibility of this product...."

There is always a rational fear that bad events could put Tesla at risk.

They have their major factory in Fremont, and a few other facilities spread across the Bay Area. I was here for the 1989 Loma Prieta earthquake and other quakes too. If "The Big One" hits the Bay Area that will put a dent in Tesla's production for weeks.

But, that is not very likely.

Or the economy could have another recession that could slow demand for Tesla's vehicles way down. The Great Recession is a big part of the reason that GM had to be bailed out (other systemic issues did not help). Since Tesla needs cash any big drop in demand would be difficult to contend w/. But not impossible.

The Model ≡ is the culmination of Elon's original Secret Tesla Motors Master Plan. So unless Tesla goes completely out of business, then the likelihood of the Model ≡ not being built is about zero. To put it another way, Tesla's goal for the past ten years has been to make enough money to build the Model ≡.

What would be at risk would be The Great Ramp Up where Tesla accelerates their already lofty goal of making 500K cars—MS/MX/M≡/MY(?)—by 2020 to 2018. The reason Tesla needs The Great Ramp Up is to convert 400K+ reservations into sales. Since they know that demand is there, and can prove it to investors, they can show there is an opportunity cost to not ramping up production as quickly as possible.

So keep your spirits up and keep asking friends, family, and complete strangers, "Have you reserved a Model ≡ yet?" It's a great conversation starter, and never gets old.

Ross1 | 6 september 2016

Soon it will

"It's a great conversation starter, and never gets old."

topher | 6 september 2016

"Most analysts agree, this company is in very serious trouble unfortunately."

Yup, that what all shorts say. They need the price to drop before the short squeeze that is coming when the vote on the merger takes place. Sadly for them, most analysis don't agree.

dd.micsol | 6 september 2016

The way I see it-the start of m3 preorders was a great punch in the stomach for other auto manu that didn't give 1/2 a f$$$ of detail to their EV design, performance, and engineering. Tesla unveil 2 will crush them. I expect this number of preorders to double in the 48hrs following unveil 2. In the end, don't really care how secret they keep it.

Haggy | 6 september 2016

Most analysts agree that Tesla's goal of eventually making 20,000 Model S cars is unattainable and they will be lucky if they an sell 5000. Most analysts agree that Tesla won't be around by 2014. Most analysts disagree that a company that's making five cars a week that are as expensive as a Mercedes S class will be outselling the Mercedes S class within 3 years.

Fast forward to 2016 and the analysts continue to be wrong and it makes some people wonder if they know how to read a balance sheet or if they read Tesla's annual report and 10K.

Ross1 | 6 september 2016

@topher:

Thank you kindly.

ccsccs7 | 6 september 2016

@Ross: <3

Nexxus | 7 september 2016

@Haggy,

+1, I also love how these same analyst's never lose their jobs over being wrong all the time. They just move on to other non-sensical prophecies.

dsvick | 7 september 2016

@Go_Peddle - "I also love how these same analyst's never lose their jobs over being wrong all the time. "

Because, in a lot of the cases it isn't so much about being right it's about drivgn traffic to their web site, and nothing does that like doom and gloom.