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Is increase in "test drives" a sign of "decreasing orders"?

Is increase in "test drives" a sign of "decreasing orders"?

I was wondering if the number of Model S orders is now declining based on the fact that they seem do be doing more agressive selling in the form of increased test drives. At one time it was my understanding that they could not build them fast enough to keep up with the orders that were coming in. Is this no longer the case? And if so what is the reason? Has the peak demand for Model S's occured and is now declining or has production increased so much that they need to be more agressive?

Frank

lph | January 20, 2014

I read the opposite. Allowing more test drives means that their capacity has increased.

Joshua Burstyn | January 20, 2014

I'm not sure that analysis is correct. I'd say increased test drives are caused by increased demand and better product awareness.

Remember - Tesla does no advertising; everything is driven by their website, reviews, awards and word of mouth. At the beginning only EV affiocandos or car entheusiasts were aware of the brand. Now it seems the flood gates are open and the general public wants to know more about the brand and its products. This is a good thing.

In general more test drives == more sales. Tesla has not become more aggressive in anything except production.

Mike T | January 20, 2014

I agree with @Jewsh. I see it as more marketing. What was your reaction after a test drive? I was sold and was selling!

SamO | January 21, 2014

Tesla is still production constrained. What this means is that Tesla is selling every car it can, as fast as it can. More orders are coming in and they are having to delay orders anywhere from 4 weeks to 4 months before delivery can take place.

In the meantime, they are doubling the number of stores, service centers and superchargers in the next 12 months.

Pretty sure all test drives are a good gauge of is interest in finding what all the ruckus is about.

Frank.B.Smith | January 21, 2014

I have not taken the test drive yet. Scheduled for Feb 2nd. I am already sold on EVs and love Tesla but the Model S is not practical for my driving circumstances or budget. I am a candidate for the Gen III Tesla. I bought a Think City to hold me over until the Gen III is available.

Haeze | January 21, 2014

Right on Frank ! That is the advice I have given to a lot of the people who test drove my car, then asked about its price and thus, their shoulders drop.

Go ahead and buy a cheap, economical, perhaps even used car that will last you for 3-5 years, and buy the Gen III when it comes out. It is shaping up to be a very nice car !

This will allow them to save up some spare cash to drop down on the Gen III when it comes out, and get them in at the Signature level with all the options.

Joshua Burstyn | January 21, 2014

@Haeze, @Frank.B.Smith:

Well it depends; are you buying to make a point and fund further EV development or is this a matter of practicality? Furthermore, what is your appetite for risk? Tesla still has much to do to become as established as existing manufacturers. Then there's how much you value driving an awesome ride and your propensity to buy large vehicles. (The Model S isn't exactly small...)

All in all I can see both sides. Hopefully your Model S test drive will be satisfactory and you'll be ever more convinced to get a Tesla. :-)

Brian H | January 21, 2014

Jewsh;
"as established as existing manufacturers". Chrysler? GM? Thanks, but no thanks. Dead men walking.

Joshua Burstyn | January 21, 2014

@ Brian H:

You'll note I never mentioned whether or not the "established" car makers are good or not. The intention was to point out that the GMs and Chryslers of the world can tolerate a few bad quarters. I don't think Tesla can tolerate that much fail.

jordanrichard | January 21, 2014

Frank, where did you get the stats on the number of test drives? Tesla is not like Ferrari, purposely restraining production to keep the "exclusivity" and prices up.
Place an order for one now, and it will be March before you will get it. It's certainly not because it take 6 weeks to build the car.

You will thoroughly enjoy the test drive and be blown away.

Bikezion | January 21, 2014

Established automakers? Aren't they too big to fail? They can suffer more than a few bad quarters, the government will prop them up and let us fund them, the dumb masses will think the $7500 tax credit ruined the established makers profits, and the shareholders will take it in the shorts.....again.

Frank.B.Smith | January 22, 2014

@JordanRichard. Nothing scientific I just have never heard of a test drive in Maryland and now they are having several. If the company was still having troubles building them fast enough to fill incoming orders I would not expect them to want even more orders.

SamO | January 22, 2014

@FBS

That's why you aren't the CEO of a $20B company.

jordanrichard | January 22, 2014

Frank, I can see how one would think that. Sort of like a store saying that business is booming, yet they are still advertising sales on their products. The thing is, if Tesla turned people away from test drives, then rumors would start that Tesla doesn't need anymore business. It is an enviable position to be in when demand is hiring than supply. Very fortunately Tesla isn't using a typical franchise set up, because then there would be price gouging.

Brian H | January 23, 2014

"demand is hiring than supply" - higher?

blue adept | January 25, 2014

Like others here, I'm thinking that you're MIS-interpreting the increased demand for test drives of the Model S as it can only indicate an ever increasing awareness of Tesla and the desire to find out more by those members of the public who are as of yet unaware and are taking the time to experience the Model S for themselves which, also obviously, can only serve to increase overall awareness of Tesla by the general public at large.

Afterall, everyone likes to be apprised of all of their options.