Tesla Tops Estimates With 11,507 Model S Deliveries In Q2 2015

JUL 2 2015 BY JAY COLE 43

Tesla Bests Q2 Estimate In Early Sales Report

Tesla Bests Q2 Estimate In Early Sales Report

As is Tesla Motors new reporting protocol, the company announced their estimate for second quarter worldwide deliveries.

And as we earlier had expected during the April to June period (“we think Tesla edged out guidance in Q2 easily by more than a few hundred units.”) the company bested the top end of its guidance of 10,000 to 11,000 Models S sedans sold.

Today Tesla Motors announced 11,507 Model S deliveries for Q2-2015.

There may be small changes to this delivery count (usually well under 1 percent), as Tesla only counts a delivery if it is transferred to the end customer and all paperwork is correct.

Random FYI: Last quarter Tesla estimated 10,030 sales before the quarterly report, and that number ultimately was rounded up slightly to 10,045 units.

Tesla also added this gentle reminder to impressionable analysts about relying on the sales number too strongly:

“Also, this is only one measure of our financial performance and should not be relied on as an indicator of our quarterly financial results, which depend on a variety of factors, including the cost of sales, foreign exchange movements and mix of directly leased vehicles.”

Our expectation going forward (and looking at production/deliveries for future cars in the system now) is that Q3 will have less deliveries than Q2 as the company looks to get the Model X up and running.  Given Tesla’s full year target of 55,000 EVs sold, it will then need to lean heavily on a very large ending push in Q4 to come close to that number.

Combined with Q1 sales (10,045), Tesla has sold ~21,552 Model S sedans worldwide in the first half of 2015.

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43 Comments on "Tesla Tops Estimates With 11,507 Model S Deliveries In Q2 2015"

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Anyone willing to estimate the size of US Order Backlog if ALL orders are getting into production within 5-10 days of confirmation?
Imo switching to trains was just to avoid shortening delivery times. This Quarter they produced more by shortening lead times thus basicly eating way order backlog that would have otherwise shifted to next quarter.

Ah, no.

Model X is due out, so relax…

Global average wait times is now over 13 weeks.

Yes, it seems Tesla concentrated on US deliveries this quarter.

The order book is just fine.

How do you see that?
Just look at orders that were confirmed in last 6 weeks and how soon they enter production compared to before, independant of orders being from Europe or US.
Tesla is struggling to maintain capacity utilization

Agreed. If Tesla was production constrained that would not have cut MS deposit by $2.5K or bothered to create liabilities with their pseudo-lease program. They clearly have enough battery capacity now, or they would not have been able to meet the original MX launch date.

Well, it seems reasonable to assume that Tesla does have sufficient battery supply to start making the Model X in limited numbers. Obviously they wouldn’t have put forward a guidance for more cars than they could equip with battery packs, based on their contracts with Panasonic (and, I guess, Samsung?).

But to jump from that to the conclusion that Tesla is struggling to maintain enough demand for their current level of production… you do remember that Tesla is building the Gigafactory to ensure a much, much larger supply of batteries, right? Why in the world would Tesla be spending billions of dollars on that if the demand for their cars was dropping off?

Even conspiracy theories should be at least semi-plausible; this one isn’t even remotely so.

It’s all a conspiracy so the lack of evidence to show it is a conspiracy is evidence that it is a conspiracy. Capiche?

When your neighbor buys a brand new car, do you think they got a raise or a new large loan? Did a parent die and leave some money? Did their investments go up? Just when things look good – we just don’t know all the details and cannot say what really is going on.

Obviously, if you look at the number, it is larger than usual. But if you look at the numbers posted for the last six quarters of the number of cars produced minus the number of cars sold in each quarter and add them up, they started Q2 with over 4500 cars in their inventory (besides the pre-owned cars).

Of course they had a great quarter.

Now, what we will not know for four weeks or more is whether they produced more than 11,507 during Q2. If not, then they were relying on inventory and pipeline to make the number. If they produced 12,000 or more, then inventory has grown again further. I suspect production was just about the same – 11k to 11.5k.

Is Tesla going to sell significantly more cars this year than they did last year? Yeah, they are. Trying to analyze the exact number of cars produced in any quarter, or agonizing over whether Tesla missed its guidance by a few hundred or exceeded it by a few hundred, is rather pointless in the long run. I’m not saying that you shouldn’t try to read the tea leaves, nor that it’s a waste of time to try to figure out exactly what the month-to-month ups and downs of Tesla’s orders, sales, deliveries, etc. are. But let’s keep it in perspective. The important question is whether or not Tesla will remain a growth company, and for how long. It’s highly inappropriate to try to label Tesla a “success” or a “failure” based on a few hundred units of sales more or less in any quarter. Tesla has predicted that it will grow sales by about 50% per year, at least for the next two years or so; at least until they start producing the Model ≡ in large numbers. Based on past performance, I’m fairly confident they can deliver on their estimated growth rate. If and when they fall significantly short… Read more »

3 Electrics, what do you mean by they cut the deposit on MS by 2.5K.

It was $2,500 before. Is it 0 now?

Electric Bungaloo said:

“Tesla is struggling to maintain capacity utilization”

This is what, your third or fourth recent post at InsideEVs making that assertion?

It looks like you’ve made up your mind that Tesla is playing games with its production numbers, and now you’re casting around desperately looking for evidence to support your conspiracy theory.

I understand why Tesla bashers and short-sellers continually come up with all sorts of conspiracy theories; they have a financial motive to scare others into panic selling of stocks. But why anyone else would buy into that nonsense is beyond my understanding.

Second post,

i actually just ask for facts to prove me wrong, massive reduction in lead times between order confirmation to production start, from 50 days to 10 days.

you presented nothing other than some statements without supporting information

As I explained in the comments on the other article here at InsideEVs, this can be explained by Tesla switching from mostly batch processing of orders, with a three-month rotation between Asian, European (and Right-hand-drive regions), and North American markets… to processing orders more along the lines of first-come-first-serve, at least for North American orders. I think I just saw someone else post that worldwide, delay between order and delivery now averages 13 months. So it seems the claim that Tesla has shortened the period between order and delivery applies only to North American sales, not the worldwide average. Now, I certainly will agree that Tesla does carefully manage demand. They do this by such things as making lease offers more (or less) attractive, and by new offerings such as the “D” twin motor cars, plus the new 70 kWh version of the Model S, which seems to be much, much more popular than the 60 kWh version was. But the latter is basically the same thing as other auto makers making changes in the appearance of their car models every year to give them a “fresh” look, even when those changes are purely cosmetic and have no engineering value.… Read more »

Lensman said:

“I think I just saw someone else post that worldwide, delay between order and delivery now averages 13 months.”

Errr… maybe that was 13 weeks. Mea culpa.

The massive reduction in Model S lead times in the US has happened at the end of every quarter for the past 2 years. Likewise, in the last weeks of every quarter there’s a huge number of deliveries within California. Two years ago at the end of Q2 2013 I had a factory delivery of my Model S just 17 days after I confirmed my order.

In the first weeks of each quarter, production is skewed toward Model S to be delivered in Europe or Asia later in the quarter. Watch the pattern. It’s nothing new.

To quote a wise person:

Model X is due out, so relax…

ok. show us your data

So if they only delivered 8,000 cars, but had a 3-month backlog that would be good, but 11,000 sales and swifter deliveries in some areas is bad?

this puzzled me too


Al S said:

“So if they only delivered 8,000 cars, but had a 3-month backlog that would be good, but 11,000 sales and swifter deliveries in some areas is bad?””

Thank you for succinctly summarizing this bizarre and absurd argument.

Electric Bungaloo said:

“This Quarter they produced more by shortening lead times thus basicly eating way order backlog that would have otherwise shifted to next quarter.”

Well, that’s twisting the available evidence to fit a negative conspiracy theory, innit?

A more neutral analysis would be this: By shortening domestic lead times, Tesla will increase demand for its cars. Someone making a buying choice but faced with a two-month delay in getting a Model S, might well choose to buy another car instead. But if the delay time was only, say, three weeks, they might well be more likely to go ahead and buy the Model S.

Bottom line: Shorter delays between order and delivery means more sales for Tesla.

Is this US Sales? Tesla usually reports these numbers on a global scale not US based like some of the other manufacturers.

The little car company that could. I think I can. If you get that reference, well, gfu.

How does Tesla factor for Demo & CPO units in their reported deliveries #s? Demo & CPO units for traditional car makers are generally captured at the dealer franchise level but in Tesla’s case it’s Tesla making those deliveries.

As I understand it, demo and loaner sales are counted in with their sales numbers; that is, legally they’re treated as new car sales. I’m fairly sure that’s correct, because there were reports at the end of last year that Telsa was pulling out all the stops to make their annual sales target, including a slight increase in the discount on demo / loaner cars.

Contrariwise, CPO (Certified Previously Owned) car sales are used car sales, and no auto maker — including Tesla — counts those as new car sales.

Sounds correct to me but where is Tesla in their reported deliveries #s distinguishing (breaking out) NEW CAR deliveries vs. CPO deliveries? Or are we to simply assume the reported delivery #s exclude CPO deliveries?

Wait for end of Q2 report and stockholder letter and and then post report Q&A session with Musk/Deepack.

CDAVIS asked:

“…are we to simply assume the reported delivery #s exclude CPO deliveries?”

I honestly don’t understand why anyone without an axe to grind against Tesla would even raise the question. Why would any auto maker include used car sales as part of their official sales figures? At the least it would be double-counting, and thus inaccurate. At worst, from the perspective of a stock investor, it would be fraudulent. I don’t know if it would actually be illegal, but I rather suspect the SEC would take a dim view of that.

I’m a big Tesla fan; no ax to grind here. Have a Tesla on order in fact.

Most public dealer groups (such as Auto Nation) break out units sold as New vs Used. Often the Used units sold represent a higher per unit margin than the New units sold. Since Tesla is their own dealership network and are therefor also selling Used units so I would think tracking Used units sold against standing inventory as a market watch metric wold be also good to know.

Sounds like an excellent thing to offer at their next shareholder meeting…

To clarify, they are counted as sales when they are sold to a customer, not when the go into service as a demo/loaner.

Yes. It’s kind of a strange situation with traditional dealerships, because legacy automobile manufacturers sell cars to dealerships, not directly to the public; yet they only count “sales” when they have retail sales to the final customer. Another thing that muddies the waters is that when some auto makers lease cars, they finance it in-house. In the long run they may make more on the loan (or not, with incentives such as “0% financing”), but at no point does anyone actually pay the auto maker the full value of the car. With Tesla, it’s much more straightforward. There’s no middle-man; the car is either owned by Tesla, or the customer. Leases are handled by third party banks and financial firms; Tesla is paid up front, the full price of the car, for leased vehicles. I’m less clear about Tesla’s new CPO program. I thought I had read that is actually being handled by a separate company, not internally by Tesla. But Googling the subject, I don’t see any article identifying an outside company. So perhaps with the CPO program, Tesla will be buying back its own cars, and reselling them as used. But I’m not sure about that. If it… Read more »

Jay Cole wrote:

“Our expectation going forward (and looking at production/deliveries for future cars in the system now) is that Q3 will have less deliveries than Q2 as the company looks to get the Model X up and running.”

Jay, I wish you had gone into that in more detail, because I suspect this article will get more readers than the “Model X” section of this month’s “Monthly Plug-in Sales Scorecard” article. For me, that is the real Tesla news! So here that is, for those who missed it:

If you look ahead to Tesla’s production schedule guidance given to Model S customers for this summer, there seems to be a huge void for production/deliveries in July and August. Why? Think Model X. We expect the Model X online configurator to come online in a couple weeks, and production not too much later… although that is really jejune to this Model S sales report.

What is important is that Tesla delivered a lot of Model S sedans in North America in June before what appears to be an extended lull beginning in the second half of July while the company focuses on getting the Model X production online.

I read something that said pre-orders of 24k for the Model X, though still, to hit their numbers for the year will be a challenge, but certainly not through any lack of demand.

Wow, with all the exasperation at their sliding timelines for new releases, Tesla is doing a great job of capacity-ramping.

I believe that outside of possibly China’s BYD, the Tesla Fremont factory is now the volume leader in terms of BEV (or even PHEV) production rate.

Nissan barely cranks out 60k Leafs/year out of 3 factories. Tesla is making >40k out of one.

The Nissan factories that ‘barely’ cranks out 60k Leafs from 3 factories, also cranks out a lot of other Nissan Models from the same production lines – they do not have Leaf-specific production lines….

In total, each of those factories crank out way more cars than Tesla from those production lines.

Everyone has to remember that Tesla is looking to expand their production capacity in a big way during Q3. It isn’t a gentle ramp and I doubt they had much of a capacity increase over the course of this last quarter. Plus, they are no longer doing the big end of quarter pushes and deliveries to the east coast are now being done over rail to save money.

Tesla guided deliveries for 2015 at 55,000, with 40% coming in the first half. They came in at about 39.1%, so pretty much on target even with the change in quarterly strategy and longer transportation time.

I think it’s a good sign to see Tesla doing things like eliminating batch processing, and using slower (but cheaper) rail delivery. To me, this is a sign of a maturing company. The “drama” of Tesla pushing, pushing, pushing at the end of every quarter (and doubly so at the end of every year) to make their production/delivery guidance made for great story-telling, but IMHO it’s a bad sign when running a business appears to necessitate periodic crisis management. Good management means planning to avoid crises, not dealing with them as they happen.

I guess I’m naive, but I always find it astonishing that every single bit of good news coming from Tesla is somehow twisted into something appearing negative, by conspiracy theorists and Tesla bashers. I understand there are TSLA short-sellers and people politically motivated to spout anti-EV FUD about Tesla. What I do not understand is why anyone who isn’t part of either group would pay any attention to such bilgewater.

Why would Tesla S production quotas lower in Q3?

Will Tesla use model S production lanes? Model S parts? Workforce?

We know that model X have separate production lanes, and while I would agree that parts that end up in X wont sell in Q3, but shouldn’t it be unliekly that Tesla should need canibalize production capability of model S?

For me production and sales of S will go as planned UNLESS Tesla wants to increase production capacity of models S as well. But that is unlikely if they are planning to push X. Why disrupt whole business at once?

The Model X and Model S share production facilities. It’s an exaggeration to say there is a separate production line for the Model S. In some areas, there is only one line, shared by the Model X and the S. In other areas, there are two lines side by side. I think I read that any part of the line/lines are built to handle either the X or the S.

At least, that’s the plan… the theory. We’ll have to wait and see how it develops in practice. It may be that Tesla will discover it’s more efficient to have certain parts of the production line/lines optimized to handle only Model X production.