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Who will be the 1st moron to report Tesla sales are down in the U.S.?

Who will be the 1st moron to report Tesla sales are down in the U.S.?

Now that Tesla is shipping a large percentage of their production to Europe there will be fewer deliveries in the U.S. until sometime next year when they can increase production. I can see a headline now - "Tesla delivers fewer cars in the U.S. in Q3/Q4 - Are they running out of customers?" No doubt some moron will post this on seekingalpha.com or some other blog site. I look forward to it as a great buying oppotunity if the stock sells off due to a misleading report like this.

carlk | September 3, 2013

I'm not sure that will happen though. Elon said recently Tesla is still production restrained. He also predicted Tesla will have profits in Q3 and Q4. By next year Asia shipment will start to pick up. The best time to buy is probably still now if anyone intends to own some Tesla stock.

jbunn | September 3, 2013

JZ13, point well taken.
I saw an article about how the Tesla was the third most popular luxury sport in California. My first thought was "if we had more to sell, we would be number one."

In California, people seem to be taking to the Model S in good numbers. I suspect we could double production and still sell out.

cloroxbb | September 3, 2013

It wont matter, Seeking Alpha seems to publish more than 1 negative article on Tesla almost every day, and the stock stays up.

The disinformation that people spew out on a constant basis... Looks like Tesla is really getting to people :)

EVMD | September 3, 2013

FOX news of course.

lolachampcar | September 3, 2013

Faux, Broder, Peterson ??

bonaire | September 3, 2013

Friend of mine works at IBM and when he goes to the S.F. area to their office, he says there are quite a few parked there. Special considerations exist, of course, for the HOV lane and he says people really want to take advantage of that and it is a moderate helpful selling point.

JZ13 | May 7, 2014

Well we can't say we didn't see this coming.

Kimscar | May 7, 2014

@JZ13 it might very well be possible that sales in the US have dropped a little. I have read some of the articles. I among some others were offered early delivery of my Tesla. I declined as I have to pick up in July due to money availability.
I think Tesla knew what it was doing expanding to Europe and China at the times that it did. By doing so they will continue to produce Model S at a high rate.
I will be curious to see 1st Quarter results. My take in the long run Tesla will be a winner so if your like me you hold on to the stock for the long term.... I bought at 21 and plan to hold for a very long time.

tes-s | May 7, 2014

Are you calling Elon a moron??

michael1800 | May 7, 2014

Sales = Deliveries. Doh!

JZ13 | May 7, 2014

kimscar - Elon stated today that North American orders were up 10% in Q1. Demand is up, only supply of available cars is down.

tes-s | May 7, 2014

"Who will be the 1st moron to report Tesla sales are down in the U.S.?"

That is what Tesla reported today. US sales are down.

carlk | May 7, 2014

Tesla had to cancel a job fair in the Fremont factory Saturday morning because too many applicants were showing up that caused traffic back up on I880. Apparently they are seriously hiring. There is no other reason for doing that other than anticipating increased production need.

tes-s | May 8, 2014

Yes - lots of worldwide demand. It is just the US where demand is off. I also predict at some point everyone who can afford a MS in Norway will have one, and demand in that market will decrease as well.

Lots of demand from China. I think there is large upside for European demand. RHD vehicles will open up more markets. HUGE backlog of reservations for the MS.

Demand is VERY strong globally.

Once they increase production and meet current demand, they can take steps to increase demand. In the US, that could be superchargers, new features (like AWD), advertising, range improvement - all sorts of things.

Still, I think it is unfair to call Elon a moron for reporting that sales are down in the US.

Andrew_OH_70D | May 8, 2014

The analysts should remember that all other car companies count a "sale" to a dealer as a sale, even though there may never be an end customer. Dealers have to guess what options and colors will sell.

Tesla has an incredible competitive advantage with the ability for the customer to configure exactly what they want before it goes into production. They have a deposit to help with cash flow, and payment when the car goes out the door. Couple that with a huge following of loyal customers, and service centers all there to make sure your experience is the best it can be, and free charging nationwide, you have to wonder why anyone who can afford a Tesla would not buy one.

I often participate in ride and drive events where I let people drive my Model S. As you all know, they are all blown away. Last week, I gave a test drive to a Honda executive and a State Representative, who were clearly amazed with the car. At the same event, a local Cadillac dealer showed off the new Cadillac ELR. When people asked for a test drive or ride, they were told they would have to come to their dealership!

Those waiting for the tipping point don't realize that it was last year.

eddiemoy | May 8, 2014

@tes-s,

think you need to learn what demand, sales and deliveries mean in the world of tesla...

first, you characterization of demand by looking at deliveries is wrong. you can't get the demand from the deliveries.

tesla sales=deliveries as they are production constrained. their orders in US increased 10%, but deliveries were not met due to needing to satisfy lead times in Europe. They produced over 1000 cars more than they sold because they had to fill the pipeline to china.

reduction in sales in US doesn't mean reduction in demand.

carlk | May 8, 2014

The depletion of early adopters will be more than compensated by new potential customers who did not have a chance to learn what MS really is before. Even here in the Silicon Valley I have demo'd, in the last month and half since I got the car, to a dozen or so people who did not know much about it. Just one of them ordering an MS could make the sales trend to continue.

Red Sage ca us | May 8, 2014

Hmmm... I'd say it would be the Wall Street Journal. The same day, The Motley Fool will cosign that. Later the same day, The Young Turks and Green Car Reports will point out how stupid they both are being. Two or three days later, Reuters and Bloomberg will report on how stupid WSJ is being. Meanwhile, the stock will dip around 1.2%, before surging 6% two days later. Just like always.

tes-s | May 8, 2014

@eddie - You are correct, demand and deliveries are not the same thing. Demand can be approximated by deliveries when wait time remains relatively constant, which it has.

I do not believe US deliveries are production constrained, since confirmation-to-delivery times have remained relatively constant. If US deliveries were constrained by production, I would expect longer wait times.

Not sure if they reported production numbers, but I think they said they increased 15% to almost 700 per week during the quarter. Take "almost 700" to mean 675. If that is up 15%, then figure they were at 575 at the beginning of the quarter, for a weekly average of 625/week. 13 weeks in the quarter that would be about 8125 produced in the quarter. Deliveries were about 6500, right? That means they produced 1600 more cars than they sold - 1000 on the boat to China, and the other 600 represent a net increase in "on the boat" to Europe and other existing markets as well as expansion to the sales and loaner fleet.

Reduction in deliveries in the US does mean a reduction in demand if the wait time remains constant - which IMHO is has.

@carlk - there has been a dramatic fall-off of sales in CA. CA registrations have been posted in other threads, and the number have declined significantly. IIRC, the decline in US sales is mostly CA, with the rest of the country flat. I look at the US as 3 markets - Mature (CA), other strongholds (TX, AZ, WA, NY/MA, Atlanta, and a few others), and new markets (everywhere else). CA is declining (pent-up demand has been satisfied), strongholds are solid, and new markets represent untapped potential.

Bighorn | May 8, 2014

People kept saying that the world was flat. It didn't make it so. Clearly you haven't even read yesterday's report which tells you in bold that production for Q1 was 7535. Go on to read that NA demand was up 10%. Pontificate all you want--the fact remains that demand was up for the first three months of 2014--not flat or declining. Stop confusing demand with deliveries and then using legerdemain to suggest that wait times support your faulty hypotheses.

Ticket for admission to this thread should include having read this...

http://files.shareholder.com/downloads/ABEA-4CW8X0/3154669421x0x752463/4...'14%20Shareholder%20Letter%20final.pdf

tes-s | May 8, 2014

7535 is an average of 580 a week. Either they have greatly increased production recently, or "close to 700/wk" is subject to interpretation of what "close to" means.

Yes, yes - believe that demand has increased over the last 9 months if you like. Not sure why they sold 1000 cars less though, and the line did not grow.

Do you think they will produce an average of 700/wk in Q2 since production is "close to 700"? That would be 9100 in Q2.

35,000 deliveries in 2014. About half went to the US in Q1. I expect that to fall throughout the year. That would put US sales in 2014 well below 2013 levels.

Do you agree that US sales have dropped over the past 12 months?

Red Sage ca us | May 8, 2014

PDF (3.7 MB): Tesla Motors, Inc. – First Quarter 2014 Shareholder Letter

Thanks, Bighorn!

drax7 | May 8, 2014

Everybody should start ignoring tes-s , pure misinformation with the intent
To gain from it.

You either take a Elon at face value, and reject tes-s, or otherwise
You believe tes-s and believe Elon is a fraud.

AmpedRealtor | May 8, 2014

Elon stated during his conference call that Model S production is sold out through Q2 and that US net orders are 10% higher than the previous quarter, which shows growth and increasing domestic demand. Obviously Tesla did not ship that many cars domestically because supply was routed elsewhere, but the fact that orders are up 10% and they are sold out through the end of Q2 tells me that they are doing very well in the US.

We must also judge Tesla by the actions it is currently taking, which is centered on growth. Tesla is not looking in the rear view mirror, they are not even remotely concerned with demand. Their concerns lie with infrastructure, being able to deliver a great car in volume, and gigafactory coming online in time for Gen 3. I didn't see anywhere any concern whatsoever about sales slowing down anywhere.

My takeaway - Tesla is doing better than ever. Wall Street, in its typical fashion, doesn't get it.

rocketscientist | May 8, 2014

Tes-s
You continually state wait times have not increased. Was that mentioned yesterday? Or are you analyzing data from a forum based on? Also...wait time...increase/decrease...we aren't talking about much of an increase in wait time to absorb a 10% increase in demand combined with a reduction in available vehicles. If someone had to wait an extra day or two? I'm not sure I don't have all the numbers. But this "no increase in wait time" does not translate into a decrease in demand. As an engineer I would need more data than "there has been no increase in wait time and therefore demand is down".
Plus when the CEO says there was a 10% increase in orders...ya think he's not telling the truth? Because that sounds like an increase in demand. Not sure your motivation with sticking to your story???

Anyone have the "call" in a pdf format...last time someone was able to do that and it was great!
Anyone have the "call" in a pdf format...last time someone was able to do that and it was great!

mdemetri | May 8, 2014

rocketscientist - the transcript can be found here: http://seekingalpha.com/article/2201363-tesla-motors-tsla-ceo-elon-musk-...

JZ13 | May 8, 2014

drax7 - +1

You summed it up perfectly. Tes-s probably forgot to take his medication over the last few months. He/she is trying to imply that deliveries/sales in California and N. America as a whole are down and therefore demand has peaked and is waning here. The rest of us know that isn't true.

Demand is up and the proof is that orders are up 10% which has nothing to do with increased Superchargers because most of the new Superchargers are in sparsely populated areas.

tes-s | May 8, 2014

US demand is down over the past 10 months. Tesla told us Q114 is up 10% over Q413. That is still well below Q213 and Q313.

If production and demand is higher, why are sales down with little or no change in wait times?

I think we have seen the bottom of the US sales decline.

AmpedRealtor | May 8, 2014

@ tes-s... let it go. Elon has spoken and you are wrong.

DonS | May 8, 2014

I know service loaners only represented a few hundred cars at most, but Tesla has stripped the loaner fleet to almost nothing. I assume that is to get more cars out there to sell. The word for the last few months has been "we are refreshing our loaners," but the replacements haven't shown up yet, and I am not holding my breath.

If an adequate loaner fleet actually exists sometime in the future, that could be a key indicator that sales are down.

Red Sage ca us | May 8, 2014

The only people who aren't demanding a Tesla Motors product these days are those that cannot divorce themselves from 'the lusty roar' of a V8, V10, or V12 internal combustion engine.

tes-s | May 8, 2014

Nothing inconsistent with what I say and Elon says. He says demand us up from Q4; I say demand is down from Q2 and Q3.

They always strip the loaner fleet at the end of the quarter, then build it up again. No net effect on sales.

tes-s | May 8, 2014

Demanding a car and buying one are two different things.

tes-s | May 8, 2014

Back to the topic if this thread. It was Elon that was the first to report that US sales are down in Q1.

eddiemoy | May 8, 2014

@tes-s, there is also seasonal demand. some quarters are going to have greater demand. tesla has been selling model s for little over a year. so many variable(production numbers, where tesla chooses to send their cars, etc) and you claim to be the one who is able to figure out demand based on wait times on deliveries???

geez! talk about nut job.

justineet | May 8, 2014

Some of the "morons" keep looking at gross profit too which is a terrible way 2 judge a newly established company which is spending lots of $ in one time expenditures such as equipments and service centers. Such companies should be judged on profit per products/vehicle -- gross product margin, quite different than overall company profit margin which can be affected negatively temporarily..

carlk | May 8, 2014

@justineet +1 I would rather Tesla to invest the profit for future growth than put is in the bottom line. Only that can justify the hefty stock price investors give it.

J.T. | May 8, 2014

Lies, damn lies and statistics

tes-s | May 8, 2014

@eddie - I have not taken into account seasonality. Sales have been on a steady decline which I believe is too much to be explained by seasonality. We now have 3 quarters of data after the initial pent-up demand was satisfied, with double-digit percentage declines each quarter. In 6 months we will have 2 more quarters of data, and can make year-over-year comparisons, rather than just looking at linear trends.

Out4aDuck | May 8, 2014

@justineet - I agree with you completely. If you try to factor in capital investment, you can reach the wrong conclusion. I always focus on the operating income (gross profit minus operating expenses). Some people prefer to use GAAP numbers; some non-GAAP. Either way, the trend shows the strength of the company.

TFMethane | May 8, 2014

I don't think Tesla is in trouble as a company. Remember that the current worldwide demand continues to increase. This is all without a serious marketing push. Eventually, demand will start to decline, and Tesla will begin proper marketing (other than just "grass-roots" viral marketing), and demand will go up again.

Remember that most people are not aware of Tesla, really. I just gave a test ride with a colleague of mine (who is a well-off gearhead who could easily afford any model S), and he was interested, but not aware of almost any of the good points of Tesla. We have a skewed view of this, because we already own and are "enthusiasts."

Demand will not be a problem in the future, all else being equal. However, larger forces (economic downturn, aggresive smear campaigns by savvy competitors) certainly can kill Tesla... but there are fixes for gradual trends in demand.

Red Sage ca us | May 8, 2014

IF This, THEN That, OR, WHILE, ELSE...?

tes-s commented, "Demanding a car and buying one are two different things."

Interesting. I thought for certain you had argued all along they were the SAME thing. How about a bit of speculation, similar to your own if-this-then-that assumptions...
IF Tesla Motors' stock price grows to $300 per share, THEN some will say it is overvalued.
IF Tesla continues to sell every car they make, THEN some will say they don't make enough cars.
IF Tesla's stock price grows to $500 per share, THEN some will say it is overvalued.
IF Tesla makes money on each and every single car they sell, THEN some will say they are spending too much on infrastructure.
IF Tesla's stock price grows to $1000 per share, THEN some will say it is overvalued.
IF Tesla makes money on each and every single car they sell, THEN some will say they are spending too much on research and development.
IF Tesla's stock price drops to $200 per share, THEN some will say it is overvalued.
IF Tesla makes money on each and every single car they sell, THEN some will say they would make even more by spending on advertising.
IF Tesla's stock price drops to $150 per share, THEN some will say it is overvalued.
IF Tesla continues to sell every car they make, THEN some will say they should raise prices.
IF Tesla's stock price drops to $100 per share, THEN some will say it is overvalued.
IF Tesla continues to sell every car they make, THEN some will say they should lower prices.
Bottom line? I would not recommend that Tesla Motors pay any attention whatsoever to naysayers. This is 'The Little Red Hen' of the automotive manufacturing realm. Haters gotta hate. The best revenge is to prosper.

elephant in a bottle | May 8, 2014

Has anyone seen a paid ad trying to sell a Model S?
TM is production constrained ?

Something is amiss here , maybe the product is really good.

tes-s | May 8, 2014

@red - by demanding I meant wanting. There is a difference between wanting a Tesla, and buying one.

Nothing wrong with US sales declining - exactly as Elon and most reasonable people expected. 2014 will see lower US sales than 2013, along with a 35% or so increase in global sales.

tes-s | May 8, 2014

If US sales were flat, it would delay their expansion into China. It is a positive they are lower. It is what is allowing them to expand to new international markets.

When they have expanded into all markets and have excess capacity, then they can work on stimulating demand. I think that is sometime in 2015.

Webcrawler | May 8, 2014

Tes was wrong and simply does not want to admit it....

North America orders up 10%.....

End of story....

tes-s | May 8, 2014

I admit it. Sales are up 10% over past 3 months, and down 25% over past 9 months.

tes-s | May 8, 2014

To be more clear: I admit I was wrong about demand being down in Q1. Demand is up 10% over past 3 months, but down 25% over past 9 months.

US sales, of course, have been down every quarter for the past 3 quarters.

Al1 | May 8, 2014

tes-s,

Demand in its classical, original interpretation means how much of certain product market needs.

For most of products that number is very close to how much of it company sells.

Tesla sells all of the cars it can produce. It has waiting lists of many weeks and all that with virtually no effort to push its cars to the market.

Until Tesla removes production constraint the notion of demand with regards to Tesla cars is irrelevant. Tesla doesn't push cars in America it is moving as fast as it can to start deliveries in China, UK, Japan, Australia. These markets are not isolated, because cars for all of those are produced in one single factory.