Does Report Of In-Stock Tesla Model S Sedans In Europe Indicate Demand Has Peaked? (Update)

MAR 21 2014 BY JAY COLE 49

A Tesla Model S At Home In Europe

A Tesla Model S At Home In Europe

Financial news outlet Seeking Alpha has caught wind of a German Tesla Forum (TFF-Forum.de) that pointed out earlier this month Tesla had about 100 brand new Model S sedans in-stock (all 85 kWh versions) at its assembly facility in Tilburg, Netherlands, waiting to be sold to would-be customers in Germany.

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Has Tesla Now Reached Peak Demand For The Model S In America And Europe?

Given the wide-held notion that the availability of the Model S is very scarce in Europe and wait lines are long, Seeking Alpha says this reported availability “destroys a myth” that there is a lot of demand for the car in Europe, and that it may have already peaked.

A check of the online listing of new Teslas available for German delivery on a 3rd party site today does indeed show that 15 days after this report of company-owned excess inventory there are still a few of them available – but not that many  (13 at time of update – Listing of the in-stock cars can be found here).

One German member of the forum said he was contacted by Tesla about the cars directly:

“I was called today by Tesla Berlin with the message that short 100 Model S can be supplied with optional equipment.  Within two weeks he could stand on my farm.  Apparently there was excess capacity, which must be brought to the people in the short term now.”

Update:  Tesla Netherlands has since re-contacted this member to inquire about the call from Tesla Berlin and clarify that the report of 100 units was inaccurate.  No specific number was placed on the level.

So does any excess inventory mean demand has peaked?   It could just mean an allocation hiccup or perhaps a selling off of unclaimed orders.

A Tesla Model S Arrives In China To Do Some Promo Work

A Tesla Model S Arrives In China To Do Some Promo Work

We do still have to consider that even Tesla themselves guided the street to a lower estimate of 6,400 cars to be delivered in Q1 if 2014 after selling 6,892 in the last three months of 2014 – but hinted that the reason for the lower result was the transition to European and Asian sales.

“First quarter production is expected to be about 7,400 vehicles, which is significantly higher than the prior quarter production of 6,587 cars. However, as the number of cars in transit to Europe and Asia must grow substantially to support those markets, we plan to deliver approximately 6,400 vehicles in Q1. Deliveries will grow dramatically in future quarters as the logistics pipeline fills.”

Our own check of the numbers for sale in Europe indicate that only 96 Model S sedans have indeed been registered in Germany for the first 2 months of the year.  Likewise in the Netherlands, where Tesla sold more than 1,100 last year and 508 in December – just 17 have been registered so far in 2014.   Again to be fair, without further information from Tesla itself on how production and sales breakdwon, this could just be an allocation issue at play.

As a point of interest, Norway – where the race is on to deliver – leads all European countries in Model S registrations this year with 563 units sold through February (431 during the month).

So do sales mean demand has peaked?  It is hard to say.  But what we do know is this quarter ends in a couple weeks, and financial reporting will follow – we’ll draw our conclusions then.

TFF-Forum via Seeking Alpha (Updated: Mar 21 8:54)

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49 Comments on "Does Report Of In-Stock Tesla Model S Sedans In Europe Indicate Demand Has Peaked? (Update)"

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Do not use Seeking Alpha articles as reference. That site is mostly very unreliable and it reflects very biased and personal opinions. As that site is for investors, it is plagued by the confirmation bias.

Tesla is planning to sell about 200–300 Model S per week in Germany, so having 100 car stock in Tilburg is not very big news.

Generally as a rule we don’t. But their link to a German-based Tesla forum and from there a subsequent link to some inventory currently on hand was still at least worth noting…skeptically at least.

You know the site here, we pass a long a lot of praise – along with all the news and rumors about every little thing that happens in Tesla’s world. (I mean who doesn’t want to check out their “aerodynamic” winter tire package with questionable hub cap selection for $4,000? lol)

But if only the positive stories are covered we think that is net-negative to the reader. Bring it all – and people can choose for themselves.

Thank you

Whatever they might be ‘planing’ to sell in Germany so far sales have been dismal.

But of course that is due to ‘production constraints’ not demand, according to the men of faith.

Weird that production constraints haven’t affected Norway.
It is almost as though it is not production constraints at all, and that sales in Norway have been brisk due to their massive subsidies and other perks.

But of course that can’t be true!

I await the responses of the faithful to what I think will be continued poor sales in Europe ex Norway in March.

The rationales trotted out should be an education in themselves – about the power of wishful thinking if nothing else.

Dave, it is curious how far away Elon Musk is from your thinking. You should really learn more from Elon, because he has good idea about the future of sustainable transportation and sustainable energy production.

Elon has invested more than 8 billion on sustainable transportation, energy production and energy storage. This is because he knows that this is the way to go forward, because if it is not, then we are doomed.

Sustainable transportation? Does Tesla manufacture bicycles now?

How is using a grid that will use 80% fossil fuels through year 2040, sustainable? (per the EIA’s international estimates.)

Coal fired electricity generation is the predominant fuel for electricity generation worldwide. To make matters worse, in 2040 coal use will have increased 73% over 2010. Is that sustainable?

I don’t know how a mode of transportation can be called sustainable when that mode of transportation relies on a grid that is non-sustainable for as far as the eye can see.

CherylG,

Do you know if there’s an Ignore function on this site?

Thanks.

There are a couple of countries in Europe with close to 100% green power, several close to 50%, and there is an EU wide directive obliging to move substantially towards renewable power for all. So you are not really up to date with your argument at least on the older continent.

Please stop trolling…

Yes, I’m quite familiar with the increasing use of coal in Germany.

From the Financial Times:

January 7, 2014
German coal use at highest level since 1990

http://www.ft.com/intl/cms/s/0/e6470600-77bf-11e3-807e-00144feabdc0.html#axzz2wbUoPynn

Increasing the usage of coal to the highest level in a quarter century is not my idea of ‘sustainable’.

Do you believe an increasing usage of coal for electricity production is a good thing?

I live in Alabama and on our very few acres of land, all the electricity I need is provided by the sun. Anyone who can, and wants to allocate their money as such, can live off of 100% renewable energy right now to power their home and auto. That’s the direction I’m headed. You are free to live your way. It’s the beauty of living in a free country. You even the right to disagree with anyone you choose.

Cheryl, just learn from Elon Musk. He is very good and inspiring role model.

Germans are taking nuclear off grid because of Fukushima, this is why coal. But simultaneously Germany managed to improve half a percentage point on green power in a year to get 23,4% green power in 2013.
You are really just trolling.

Troll

Excess inventory means their production planning and firecastibg was off, by what looks like 2 or 3 days. Big deal. I need to be a journalist, slap together nonsense and attribute it to an intersting firm. Lazy.

That link to the “listing of in-stock cars” seems to show only 27 cars now (4 trims levels, with 4-13 of each in stock):

http://haendler.autoscout24.de/tesla-motors-frankfurt/fahrzeuge?srcl=5#atype=C&cid=15825418&ustate=U,N,A&sort=price&results=40&page=1

Living in Germany, the phrase “Tesla is planning to sell about 200–300 Model S per week in Germany” knocks me off my ankles.

This is a lunatic target, tens of times over realistic expectations.

What is source of the German sales volume. 200-300/wk is 1/3 of Tesla current capacity and doesn’t match given volume going to other countries (not including ramp up for right-hand drive markets).

Elon Musk said that in Amsterdam. But please consider that Tesla’s production rate target for 2014 is 1000 cars per week, so 200 cars to Germany is very reasonable estimate in late 2014. And naturally it will go beyond that when Tesla gets better (AWD) and longer ranged variants into markets in 2015 that are better fitting for German autobahns.

How reasonable can 200 Teslas (what happened to 300 bracket btw?) be,
if they currently only sell 12 per week,
if all EVs together in Germany only sell 167 per week,
if total sales of ICEs in the price segment Oberklasse is less than 500 a week,
in a Mercedes-Audi-BMW country with more or less no incentives for EVs?
You make me spew my lunch beer on the pretzels again.

Model S is a best selling car in its class, so 30 % market share is not out of question even in Germany. It virtually has not any competition.

Who cares about Germany? They are going to have 30% cut of thier energy from Putin anyway. China is the one guys.

Well, if Germany takes the lesson from Russia they will accelerate their efforts to become less reliant on Russian oil & gas. I think they should keep their nukes operating and move faster toward EVs.

The opposite will happen, EV sales will continue to slow down, because oil from Saudi-Arabia and Kuwait is much more secure and they have such great freedom.

It is not Germany that is securing Saudi. Thus it is foolish to asume that it is secure to get oil from there. The mightty USA is unable or to say the least it costs the US LIVES aircraft carriers etc to secure that oil. How will Grmany do that? The Germans will wait and see and will end up buying German electric cars. So as the French. Norway is an exception. The Dutch and the Swiss are too small to make them examples of things to come.

Tilburg is a distribution center. Cars are not shipped to European customers piecemeal like in the US; they are shipped in batches. The 100-car inventory doesn’t necessarily say much, as sales depend upon Tesla’s allocations. Mathematically, it’s highly unlikely to go from 508 in December (in NL) to less than 10 per month in 2014.

Interesting article. The bubble in the stock can actually be harmful to the company, which should instead give better guidance of sales numbers (like other auto companies) instead of hiding them like they started a few months ago.

It’s priced for exploding demand, when in fact, for the company, decent demand would be sufficient to continue building cars. If the stock crashes, it might reflect negatively on the products. The alternatively would be to give good guidance and have a stock that tracks actual earnings progress.

The opacity of information is simply disappointing.

Regardless of the inventory bumps, registrations are saying all that needs to be said – the Model S is a not a volume wonder in Germany, where sustained high speed is a requirement for a road-going car, and nimbleness/right-size is a requirement for city driving.

Sales also dove in the bigger markets after the end of incentives, with Norway the sole savior given continuing large incentives for pure BEV’s.

The Norway issue does loom large for Euro numbers and specifically Tesla – as it is possible they are attempting to ship a good bulk of all the cars allocated to Europe there instead.

A lot of people who don’t follow worldwide plug-in sales religiously don’t realize Norway’s incentive system is set up like the US originally was – as a race to the finish.

Whereas in the US the credit originally was a $7,500 to the first 250,000 cars produced (not 200k per auto maker as it is now), in Norway the incentive is proportionally much, much larger and expires at 50,000.

Currently they have about 25,000 registered, but its dropping fast – even in February a notoriously terrible month to sell EVs, more than 1,500 were sold there…and you now have 5 players dumping as fast as they can in the region – Model S, LEAF, i3, e-Up! and the Outlander PHEV. (Note: Think we’ll add a note to story about demand race in Norway)

The cars sold in norway do not go threw tillburg, they are shipt their directly from the us (norway is not in the EU si it do not have tge tolls that the rest of europe have)

In sweden their is still atleast a 6 month wait. (Acording to the swedich tesla forum)

Yes, Kalle…that’s what I meant by shipping them “there” instead of Europe. I didn’t flush that thought out very clearly, glad you cleared it up.

You’ve got the initial US incentives wrong. It was originally less per car, $4500 IIRC. Also, I think it may have also been per manufacturer all along, which is a huge mistake. Could be why GM, Ford, Toyota, etc are dragging their feet now. Why hurry up, use all of your credits, and then be at a competitive disadvantage to the slackers.

Hey Koz, I was speaking of the originally approved outline for the credit put in place before it was altered heading into 2009. The one where it was pretty much tailor made for the Volt (given the lack of any other players of significance) based on a 16 kWh battery and the anticipation of the Volt’s sell rate at the time. Here is the quotage of interest in regards to the amount of the credit and the original limited total sum qualification of 250,000 units before phase-out before it was amended: SEC. 30D. NEW QUALIFIED PLUG-IN ELECTRIC DRIVE MOTOR VEHICLES. `(a) Allowance of Credit- `(1) IN GENERAL- There shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to the applicable amount with respect to each new qualified plug-in electric drive motor vehicle placed in service by the taxpayer during the taxable year. `(2) APPLICABLE AMOUNT- For purposes of paragraph (1), the applicable amount is sum of– `(A) $2,500, plus `(B) $417 for each kilowatt hour of traction battery capacity in excess of 4 kilowatt hours. — `(2) LIMITATION ON NUMBER OF PASSENGER VEHICLES AND LIGHT TRUCKS ELIGIBLE FOR CREDIT-… Read more »

I forgot that interim step. The original was setup while Bush was in office, late 2007 or early 2008. I couldn’t find a good link with the details. I wish when they changed the last they had made it 1M total instead an allotment per manufacturer. Didn’t make sense then and still doesn’t make sense that they haven’t fixed it yet.

Further down the German thread it says that Tesla has contradicted the original post. Apparently fake news.

For sure the story should reflect Tesla’s statement calling into question the report of “100” units from their Berlin office. Thanks for the update.

If Germany would turn their nukes back on, they could reduce both CO2 and their absurdly high electricity prices. Germany has the least going for it, when it comes to CVT=electric motor drive shaft, on the Autobahn. If I could drive 150 Kph, and regularly feel a Tesla’s legs run out, I may not pay close to $100k / 130k Euros, when plenty of others have the reach.

That country is an anomoly of both culture and economics, when it comes to selling Teslas. No surprise, to me. They love making mechanically complex things work. They love making models out of them. Electric drive is too simple, too elegant and doesn’t necessarily work in their back yard.

BMW doesn’t seem to have a problem selling i’s in Germany.

Duh. BMW is a long established GERMAN automaker. Clearly you don’t grasp the significant cultural challenges selling / marketing American made autos by a young company specializing in electric only propulsion there…

But hey, trolls gotta hate. Right? 😉

Of cause they have. Until BMW reaches the same sale level as Nissan Leaf has in it’s home country Japan, the i3 can be considered a failure.

Germany does not make an electric car that can go above 150kph on thier autobana that is fully electric. Tesla is the only one in the world that can do that.

Random Info: It appears as if new car inventory has been removed from the listing since the Seeking Alpha story went out. The 2 remaining are both cars with mileage on them.

Things overlooked in Seeking Alpha report (and thus here) are some countries reduced EV incentives offered in Q1 vs, Q4. Additionally changes on price due to changes in US currency exchange. Further a number of reservation holders may have chosen to wait for 4-wheel drive Model X (just a year away, and nice option for EU winters).

What is lead time between ordering a Model S, it being built, time shipping (months?), final assembly in EU before being ready for delivery? 50-100 vehicles doesn’t seem like a large number given lead time, particularly with spring in the air.

A tempest in a teapot. It’s funny when I read a negative headline that is in the least bit negative for Tesla I can imagine what certain posters will say, without even reading what they have to say. I just look at their name.
We all have our biases. Being in the markets I am constantly reflecting on my own biases too. On occasion, when I am wrong, it actually makes me happy, since then I will question/argue with myself even more.

Reading tea leaves is great. One invariably finds what one wants to see. Or in Seeking Alpha’s case what you want other people to see in order to manipulate their behaviour. Not much of a basis for serious journalism though.

Personally I prefer Tesla’s Q1 earnings report over tea leaves.

Tilburg is actually more than just a distribution center. They actually have to complete final assembly of the Tesla Model S in order to meet some European Union trade rules. Each Model S arrives not quite fully assembled off of the ship. Then they must go through whatever final assembly steps are required to meet the EU requirements for whatever trade loophole Tesla is getting around. I’m sure that takes some amount of time. So they unload a whole boat load of cars (literally) and then set to work doing final assembly work on them and loading them up for final delivery. From the point the boat is unloaded, those cars would show up as being in stock. They would continue to appear to be in stock as Tesla worked through their backlog of cars fresh off of the boat, doing the final assembly work on each car before delivery, until finally they were all gone. It means nothing about demand. It is purely a reflection of how long it takes to work through the final assembly tasks for a boat load full of cars. Sadly, I’m betting that whatever D-bag reported this over at Seeking Alpha probably knows even… Read more »

Political propaganda or short term market reaction?

A good deal and drive them off … and with all the pain of my heart I say goodbye to my LEAF

Today Tesla Model S broke a sales records in Norway with more than 1450 cars sold in March. A record for one month. However the car is delivered to customers in Norway with no VAT and no other costs. It can even drive in the bus lane. So no wonder Norwegians go nuts…