Model S, X Orders Up After Tesla Model 3 Reveal?

2 weeks ago by Steven Loveday 37

Tesla Model 3

Tesla Model 3

It seems Tesla’s entire lineup just gained popularity due to the recent Tesla Model 3 handover event.

While Tesla is reporting Model 3 reservations to be averaging over 1,800 per day, the automaker had also shared that interest in the Model S is rising since last week’s event. During Tesla’s Q2 earnings call an increase in net Model S orders was referenced. However, the company was clear to share that it’s too soon to make any concrete conclusions. The automaker stated:

Tesla

Tesla Model S and Model X at the factory in Fremont, California

“This growing demand gives us even more reason to expect increased deliveries of Model S and Model X in the second half of this year.”

According to the earnings call, Tesla enjoyed a Q2 that exceeded expectations, and the future outlook with the Model 3 now in production looks increasingly positive. If Tesla can boost sales of its flagship Model S, as well as the significantly pricey Model X, all while filling nearly a half-million Model 3 pre-orders, what’s to lose? The automaker has been trying to downsell the Model 3 and redirect attention to the Model S all along.

The Tesla Model 3 is not a cheap car in comparison to other similar vehicles, or even small European luxury sedans. However, it still vastly expands the brand’s offerings within reach of a wider audience. Even those that may not be able to afford one in the end, are taking interest and crunching the numbers. The Model 3 has opened the Tesla door to a global buying segment that the Model S and X have not been able to reach.

It may be a long time before specific conclusions can be drawn. Model 3 rollout will start very slow, and it will be a year or even two before all “backorders” are filled and new orders are attended to. Meanwhile, we will keep our eyes on Model S and X sales to assess the long-term impact.

Source: TechCrunch

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37 responses to "Model S, X Orders Up After Tesla Model 3 Reveal?"

  1. Mark C says:

    Maybe some people wanted to compare the S & X against the three, or more likely, they saw the year + wait for a 3 and decided to buy something they could get quickly…and with bioweapon defense mode!

  2. Ash09 says:

    I’ll bet it’s from a lot of Model 3 reserves that decided to take the plunge and get an S or X instead, especially when you consider that a top of the line Model 3 is very close in price to an base model S, which Elon says is still the superior offering. And that they don’t have to wait 1-2 years to get one, and won’t have to worry about if the tax credit will still be around when they get it.

    Some may also be from new customers who saw their friends, family, neighbors, or coworkers talking about the Model 3, and decided to get one after seeing how awesome Tesla cars are.

    In any case, it’s always a good thing to see more people interested in electric cars. I hope the trend continues as the Chevy Bolt is available nationwide and the Gen 2 Nissan Leaf shows up as well, giving people more choices in 200+ mile ranged EV’s.

    1. stimpy says:

      I guest “very close in price” is different to different people as I consider $56,500 to be *quite* different than $68,300. That’s $12k more (20%).

      And why would someone compare a 3 with autopilot and a S without? You either want it or you don’t, which model doesn’t make a difference. Now you’re talking about a $17k difference (30%!).

    2. Mark.ca says:

      Are you comparing top M3 to bottom MS and thinking you get the same options? Good luck with that!

  3. Stretch2727 says:

    I think seeing the specs for the Model 3 took people off the fence. Even the least expensive 75Kwh S is faster than the optioned up LR Model 3. No dual motor realistically for a year or so. No air suspension etc. The difference is now clear so people can make a decision.

    1. ffbj says:

      Reasonable.

    2. georgeS says:

      Stretch,
      Problem is the 75 RWD is 70K. ….but no heated seats so you need premium package for 5K plus no AP so add another 5K so now you are at 80K for a car with 249 miles range.

      You can get a loaded M3 for 56,500 with 310 miles range.

      For me the biggest drawback to the 3 is that trunk.

      1. scottf200 says:

        Trunk without the cove is very deep. Wonder how deep that trunk space goes? It’s HxWxL looks bigger than what was in the X.

      2. Tummy says:

        Heated front seats are standard on Model S.

        -Twelve way power adjustable, heated front seats with memory and driver profile

    3. Pushmi-Pullyu says:

      “I think seeing the specs for the Model 3 took people off the fence. Even the least expensive 75Kwh S is faster than the optioned up LR Model 3.”

      Hmmmm, yeah, that’s a stretch, Stretch.

      Tesla’s drag race videos get them lots of media attention, but really, how many people are gonna make a buying choice on the difference between 0-60 mph in 5.6 seconds (TM3) and 4.2 seconds (S 75D) or 4.3 seconds (S 75; is Tesla even making that any more?)?

      Sure, some speed demons will make a choice on that difference. But for most of us, either is plenty fast enough!

      1. Tummy says:

        I think the performance increase is to match or better other premium cars like the BMW 550i and MB E400/E43 AMG.

  4. Priusmaniac says:

    It is difficult to say if the Model S has more sales because of the media attention on Tesla or if the sales are increasing due to possible disappointments about the Model 3 with no driver console or HUD, no hatch or higher than expected battery option and other basic options price like paint. Nevertheless it is still more ev sold and in a way is getting along the Tesla path of anti selling the Model 3, at least for now.

    1. Bacardi says:

      There are hundreds of aftermarket OBDII HUDs on ebay/amazon for $25 then you have devices like Navdy…I can see some level of disappointment that there isn’t a HUD/driver display but believe there are only a handful of people that solely cancelled their reservations for that reason…Now that could be the “chief” reason in addition to other minor reasons such as they don’t like the aero wheels, want a color other than black but don’t want to pony up another $2500 for that…

      1. speculawyer says:

        “in addition to other minor reasons such as they don’t like the aero wheels, want a color other than black but don’t want to pony up another $2500 for that…”

        Seems crazy for anyone to bail based on wheels since they are such a trivial thing to change after-market.

        Oh, and the different paint jobs are only $1000 each.

        1. Pushmi-Pullyu says:

          Yeah, $1000 for non-black colors for the TM3. $2500 is a lot closer to the price for “premium” paint colors for the BMW 3-Series and 5-Series.

        2. Jason says:

          “dang it, that $35k Tesla Model 3 gonna cost me $36k because that paint colour is so expensive, I’m gonna get me a Model S for $70k instead!”
          Anyone earning enough to afford the Model S/X I would hope has some level of intelligence. Last year at the reveal they pretty much said “this is the car we are going to make”. 300,000+ reservations later and Tesla bought their production plans forward by, I think, a year. All the comments about HUD or anything else was pure speculation, Elon even said it was a simpler car designed for mass production and not comparable entirely to the Model S/X. Some said they were trying to anti sell the Model 3, maybe they were just trying to say, “hold your horses, this is not a super cheap Model S”.
          I doubt there would really be that many people who really wanted a Model S who waited for the Model 3, knowing what the car was from the reveal, who suddenly changed their mind, found a boat load of extra cash, and upgraded to the 2x pricier car.
          I can see plenty of people plonking down 1 grand and then their finances change, they realise the sedan is not for them, or can’t afford all those cool upgrades so cancel their reservation.
          With 300,000 reservations, possibly 1/2 those in the US, then you also have to expect you miss out on the subsidy. If you placed your money down expecting to pay full price, then you are smart for that. If you thought Tesla options were going to be cheap, then more fool you as there is no indication this would be the case.
          So long as Tesla actually offers the $35k base model, then I think a real lot of people are going to get into a Tesla and be incredibly happy with it. The base model looks like it will blow every other EV away. Put some options on it and that is a guarantee.

    2. speculawyer says:

      Either way, it is good news. If people can’t stand the fact that there is no instrumentation immediately in front of the driver then go buy the Model S!

      It is good for there to be differentiation so the Model S keeps selling. Having better performance, being bigger, having a full driver instrument panel, hatchback and other things will keep the Model S selling!

  5. Doggydogworld says:

    It’s hard to tell how much of the “increased orders” is spin. Tesla does not release numbers, methods or any other details when it comes to orders. So there’s substantial room for management to pick the metric that looks best. They can also change the metric from one call to the next, and have been known to do so.

    I’m not saying S & X are down and management is lying, just that all managements tend to spin. As an investor my motto is “trust but verify”. Without the data, there’s no way to verify.

    1. Pushmi-Pullyu says:

      “They can also change the metric from one call to the next, and have been known to do so.”

      Would you care to expand on that? I’d like to know the details.

      There’s a difference between spin and deliberate deception. Changing the metric without saying so sounds like the latter to me.

      1. Doggydogworld says:

        I don’t consider it deceptive because they don’t misstate anything. They just switch from quarterly to yearly or from “net orders” specifically to just “orders” with a context that indicates gross. Or they won’t mention orders at all for some periods, leaving gaps in the data.

        In the latest call they said: “We had positive comps, both year-over-year and quarter-over-quarter in orders in the second quarter.”

        Great Q2, right? Or was Q1 just weak? The guy from Goldman asks: “Can you share a little bit more maybe what the 1Q and 2Q order rate trends look like…?”. Tesla’s non-response:

        Deepak Ahuja – Tesla, Inc.
        Not relevant.

        Jonathan McNeill – Tesla, Inc.
        I don’t think that those numbers would be helpful….. [goes on to talk seasonality, people who wrongly extrapolate, etc.]

        Seriously? They just gave Q2 vs. Q1 (different seasons) but more info on Q1 is “not relevant” or “helpful” because of seasonality? And small samples (Q1) can mislead, but they specifically mention a single month multiple times and even give info on a five day period following a major event?

        “July orders were 15% higher than our Q2 average weekly order rate…”
        “(orders) accelerated further since the hand-over event on Friday for the Model 3”

        Sorry for such a long answer. Tesla doesn’t lie about orders, they just selectively disclose good info. I’ve literally never heard them say orders were down over any time period. That’s their right, but it irritates me to no end when the media simply repeats management’s story without asking the obvious questions.

  6. Tom says:

    I think it is worth reading his statement…..not quoted in this article….on increased orders. It was a very parsed statement in the quarterly earnings release related to uptick last couple weeks vs earlier near term weeks. It gave no context outside of that. I am not speaking of his post m3 release statement but rather quarterly notes. We were led to believe S and X were capacity limited but the overall arc of Tesla statements lead you to believe demand is flat at best. S deliveries have been decreasing over time for a year worldwide. Is it just mix or have they penetrated that market as far as reasonable. Certainly they have captured way more market share than expected with the S but there is only so much demand for that pricey of a vehicle.

    1. Nix says:

      Tom — Model S/X sales are UP by 53% compared to the same quarter in 2016. Is that the flat sales you are talking about?

      Yes, some buyers who would have bought a Model S back when it was the only choice (but always wanted a CUV in the first place) have now opted for the Model X. But that is actually GOOD NEWS for Tesla financially, as Tesla has actually up-sold Model S buyers into a more expensive vehicle.

      Do you consider it bad when a BMW 5-Series buyer comes in and gets a 7-Series instead? Because that is the equivalent of what is happening.

      Meanwhile, buyers who would have gotten a 7-Series or an A8 or similar gas cars are also choosing the Model S and X over their previous gas cars, as those market segments are dropping in sales.

      You can try to play games and try to get people to ignore all the growth in combined S/X sales, and ignore the increase in market share all you want, but Tesla is going to just keep growing, no matter what you say or do.

    2. Pushmi-Pullyu says:

      Tom continued his FUD campaign:

      “S deliveries have been decreasing over time for a year worldwide.”

      The Tesla-hater jackasses keep braying the same B.S. every year, and every year they’re proven wrong.

      They hate it when we post actual figures:

      Tesla’s total annual sales:
      2012: 2650
      2013: 22,300
      2014: 31,655 (+41.95%)
      2015: 50,580 (+59.8%)
      2016: 76,230 (+50.7%)

      1. Miggy says:

        And 47,000 for the first six months of 2017.
        On target for a another good increase.

      2. Tom says:

        I am a Tesla fan and have never said otherwise. FUD? Discussion forums are supposed to discuss things such as risks of the related topic not parrot blinded zealots. And certainly uncertainty is part of the point of a forum. Your year over year number is approx correct, however a closer look shows they pegged total sales at about 25,000 in Q3 of 2016 and have not increased sales from there (a few more than that Q1 2017). Not only have overall Tesla sales ceased climbing, it is also a verifiable fact that Q4 2015 was the peak of Model S sales, and hasn’t even been close to that since that time. The source provided is overall Tesla sales worldwide by quarter and broken out by model. Unfortunately this graph stops at the end of 2016, however by looking at 2017 sales first half of 47,000 (25 then 22) it is still obvious overall Tesla sales are flat for a full year, and wildly obvious that S peaked in Q4 of 2015, dropped off, then is not growing since.

        there is no factual evidence of increasing model S growth. The question is really very simple. Are sales due to capacity constraints or market demand? A year or so ago, I seem to remember that there was a 100,000 capacity constraint and if so the mix toward X makes perfect sense…sell the most expensive vehicle if you can. But comments in the quarterly earnings release seem to indicate that production on S and X are demand constrained no capacity constrained. It is perfectly ordinary and reasonable to wonder if this isn’t the plateau (at least for now) of S and X sales. It’s not a trivial accomplishment on their part and pretty awesome, but it’s a bit unrealistic to expect $100,000 luxury vehicles to take over the entire luxury segment. this graph only goes to the end of 2016, but 2017 looks exactly the same. 25,000 then 22,000-ish and S way off its peak that was hit q4 2015. So yes year over year Q2 is a big up, But there in fact has been no growth overall Tesla sales for a full year now and Model S for 6 quarters of flat and well off its peak in late 2015. In fact sales in Q2 2017 for S are about the same as Q2 and Q3 in 2015 also. It is important to develop critical reading skills when it comes to quarterly earnings releases.

        Regarding my statement of ‘carefully parsed’ and ‘no context outside of that’ on Tesla’s quarterly letter and stating this insideevs article lacks the original quote, I am specifically referring to this sentence in the quarterly release notes:
        ” In July, our
        weekly net order rate for these vehicles was about 15% higher than our Q2 average weekly order rate. ”

        Again that doesn’t give context. 15% of what? Of Q2 average weekly orders you say? How many were there in Q2 and how does that compare historically or seasonally? When stating 15% increase it isn’t very meaningful unless we know whether Q2 was low to begin with. It appears to be July as compared to May and June. Perhaps May and June are seasonably lower than July? Perhaps May and June were off the historical pace? We don’t know and as usual there is an opaqueness to the statements.

        1. Mystery says:

          Yes, you make sense. These blind TSLA stock Pushers want to Pull the distortion field over your eyes and suffocate all the air and decency out of the room. The Fact is Peak Model S & X in USA Has Been Reached. The Intl customer claimed deliveries discrepency each and every quarter Does Not Make Any Sense.
          Any new product announcement will increase interest and “Waiting List Placeholders of Fully Refundable $1K tickets”, which really mean nothing more than someone has interest and wanted their place in line Or something to tell their Neighbors and Friends about. The Real test is how long it takes to get to “Waiting list = 0 for $44k+ Model 3 in California”. See price markdown of Model X today menas “Waiting List = 0”.

        2. Nix says:

          Yawn.

          If you look at your graph, what you really see is the same pattern of Q4 having higher delivery rates, before slowing or steadying in Q1/early Q2, leading up to yet another strong Q4 YOY jump. Tesla has always had an approx. 1 year cycle on sales for sales growth.

          Q4 2015 is the epitome of this pattern, not some measure of peak demand. And if you don’t understand why Q4 2016 was the exception that proves the rule, then you don’t know much about Tesla. Because I guarantee you that every single other person who comments regularly on this board automatically pilot their way to the answer as to why Q4 2016 sales were artificially constrained.

          Q4 2017 will follow the same pattern and show yet more growth in Tesla sales.

          Whining about Tesla UP SELLING customers into a more expensive Model X as if it were bad, while continuing to massively increase total overall sales is just whining — not insight.

          What you won’t find is any other car company growing at anywhere near that rate. Your posts are boring mindless whining that lack any real insight.

          1. Tom says:

            There are two quarters missing in 2017 from that post. Q1 and Q2 2017 are exactly the same within flutter overall. Overall sales are exactly flat 4 quarters in a row. They are within 2500 vehicles with in fact the second quarter of 2017 down. S peaked in Q4 of 2015, when down and has oscillated but not grown. In fact Q1 and Q2 of 2017 (not on graph) again are the same. About 12500 give or take. The X continued to rise until peaking Q3 last year and almost exactly flast Q3,Q4,Q1,Q2 the last 4 quarters. So S being the older product has been flat and somewhat down for several quarters since 2015 and X since mid 2016.

            But yes again the question is. Is this a production limit of 100,000 and then Tesla choosing to produce a mix leaning X or is it demand? I think some of both and it probably doesn’t make business sense to drastically increase production capability on those two right now. Sales are at 100,000 per year and trying to build out 200,000 capacity would be dumb. Better to be slightly short of demand rather than create excess capacity like the other idiot US manufacturers.

          2. Tom says:

            Oh and a pattern of 1 doesn’t make a pattern. You mention Q4 2015 and Q4 2017 but 2016 not so much. There is seasonality of course. That is part of my original post (I got may/jun/jul a bit mixed though). The carefully parsed ‘up 15%’. percent of what? percent of a normal seasonal shift? percent of a low Q2 order rate?

            1. Nix says:

              Tom — do you understand why Q4 2016 was the exception that PROVES the rule? Can you identify the constraints that caused Q4 2016 numbers to be lower?

              If you cannot answer that straight forward question, there is absolutely no reason to waste any more time on you.

              Can you answer?

  7. Pushmi-Pullyu says:

    Honestly, I don’t understand why anyone would be surprised, and this is what I predicted. Doesn’t that happen with “halo cars” from every auto maker? If the maker puts out a cheaper model, that doesn’t cause sales of the more expensive models to fall; it attracts more attention to the brand, and some of those so attracted buy the more expensive car, because that’s what they prefer.

    If there was zero waiting time for the TM3, I think we’d see the same thing.

  8. Vik says:

    I know somebody who personally jumped ship due to the reveal from the Model 3. Even though it might be an awesome car, it isn’t cheap once you add all the features people think about when they think Tesla. Comparing the price to an already available car the Model S especially an used one makes the Model S really appealing, not mention if you are on the east coast it might take 2 years to get a model 3.

  9. Nix says:

    Here are a couple of things we don’t know:

    1) How many of the roughly 67K Model 3 cancellations were cancelled and then a new Model S reservation was created? (You can’t transfer a reservation to an S or X, you have to cancel and create a new one.)

    2) What exactly were internal Tesla expectations that Elon spoke about in the conference calls for the Model 3 cutting into Model S/X sales? How much higher than internal expectations are the actual recent sales?

    3) What impact will the new lower price for the Model X that Tesla just did, help to increase Model X sales?

    What we do know:

    A) Model S/X sales up 53% over Q2 2016.
    B) The Luxury cars that buyers cross shop the Model S against have seen a substantial drop in sales over the same time.
    C) Tesla is investing into lowering the manufacturing and delivery costs for the Model S and X.

  10. Pushmi-Pullyu says:

    Nix said:

    “The Luxury cars that buyers cross shop the Model S against have seen a substantial drop in sales over the same time.”

    My guess is that car sales are down merely by contrast to the recent surge in car buying following the end of “The Great Recession”. There was a lot of pent-up desire for new cars, by people unwilling or unable to make the leap into a new car due to economic downturn and uncertainty over jobs. When that eased, there was of course a surge in car buying. I wonder if what we’re seeing this year is just a normalization of what the new car market can expect going forward.

    And it’s very interesting that Tesla sales seem immune to the recent downturn. That suggests that what motivates people to buy a Tesla car is somehow different than what motivates people in general to buy a new car.

    Unfortunately, that also suggests that most of those buying Teslae are not mainstream buyers. Will that change with the TM3? Only time will tell.

    Go Tesla!

  11. Bacardi says:

    It’s just called exposure…”TESLA” hits the news and if one is in the market for a new vehicle perhaps Tesla deserves googling…Then they determine the Model S has one of the quickest 0-60 for a four door vehicle in it’s price range…I believe only a very small minority were conquest sales from people abandoning the M3…

  12. Jonathan B says:

    I’d bet that this has to do with a few things.

    1. The optioned out Model 3 is slower than the base S and will cost you over $50K.
    2. If you didn’t wait in line at the wee hours of the morning for a Model 3, you won’t get one till mid/late 2018
    3. If you have to wait until late 2018, you put about half of your tax credit at risk ($3750).
    4. Tesla is about to get rid of the S75 RWD, so you need to act quickly to get that car at the $69500 price point ($1K less with referral).

    If you were willing to spend $50K+ on a Model 3, its not a huge leap. For me, I’d have made the Leap to the Model S if I didn’t have an early reservation for a Model 3 (Jan-Mar delivery for base model). I would’ve gotten the bigger battery but I think $9K is just way too greedy. I thought for a hot second about getting an S75 RWD instead, but when I crunched the numbers, for my needs (mostly commuting) the base Model 3 is plenty fine, and I’d rather spend $69500 on a base Model 3 and a second car for my family, perhaps a plug in SUV or wagon.

  13. ModernMarvelFan says:

    If I have 2x the income I have now, I will cancel my Model 3 reservation in a heartbeat and upgrade to 75D.

    The Dual motor version will probably cost $5K more, combined with more range and option package, it is easily within $10K of the base 75D price.

    If you want Dual motor, the tax incentives might not exist by the time it comes out so at least the 75D gets them now.

    Combined with limited utility, performance and dash design, I can see few people switching back to Model S if they can afford it.

    Of course, Tesla is happy about that. Higher profit margin and more stable revenue going forward…

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