Tesla Model 3 Inventory Claimed To Be Lowest Among U.S. Automakers

OCT 11 2018 BY STEVEN LOVEDAY 62

Just a three-day supply of Tesla Model 3 vehicles compared to the industry average of about 60 days?

According to a report by Autoline Daily, it appears the answer to the above question is … yes. The report cites a previous Automotive News share (April 1, 2018 – though not a joke) that shows over four million unsold inventory vehicles from all automakers combined in the U.S., which breaks down to a 69-day supply. 1redDrop has no information related to Autoline’s source for specific Model 3 inventory figures, but admits that it only makes sense that the Silicon Valley automaker would have fewer cars on hand than traditional OEMs.

We agree that this report comes as no surprise. While Tesla hasn’t recently revealed specifics about reservation cancellations or incoming orders, the Tesla Model 3 reservation list is still likely massive and the automaker is racing to build and deliver as many cars as possible, meaning nearly every single car it makes has a potential owner waiting. According to Tesla’s second-quarter delivery report:

The remaining net Model 3 reservations count at the end of Q2 still stood at roughly 420,000 even though we have now delivered 28,386 Model 3 vehicles to date.

In July, a Tesla spokesperson responded to a Twitter user inquiring about Needham Analyst Downgrading Tesla stock. CEO Elon Musk also chimed in:

Tesla is clearly not constrained by a lack of demand like many legacy automakers. Some traditional OEMs build a multitude of cars that sit on dealer lots for quite some time. Tesla doesn’t have dealerships where it can simply drop off inventory and move along. It has to rely on multiple holding lots, a lack of an adequate supply of car haulers, and a smaller number of delivery centers in various areas of the country.

The report reminds us that Tesla manufactured 5,300 Model 3 sedans in the final week of the third quarter and almost certainly each one had already been spoken for.

1redDrop concludes that Tesla’s successful ramp-up of Model 3 production and delivery timelines should only work to attract more buyers. So, don’t expect to see the automaker showing high inventory numbers anytime soon.

Source: 1redDrop

TESLA MODEL 3

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2. Tesla Model 3
Range: 310 miles; 136/123 mpg-e. Still maintaining a long waiting list as production ramps up slowly, the new compact Tesla Model 3 sedan is a smaller and cheaper, but no less stylish, alternative, to the fledgling automaker’s popular Model S. This estimate is for a Model 3 with the “optional” (at $9,000) long-range battery, which is as of this writing still the only configuration available. The standard battery, which is expected to become available later in 2018, is estimated to run for 220 miles on a charge. Tesla Model 3 charge port (U.S.) Tesla Model 3 front seats Tesla Model 3 at Atascadero, CA Supercharging station (via Mark F!) Tesla Model 3 Tesla Model 3 The Tesla Model 3 is not hiding anymore! Tesla Model 3 (Image Credit: Tom Moloughney/InsideEVs) Tesla Model 3 Inside the Tesla Model 3 Tesla Model 3 rear seats Tesla Model 3 Road Trip arrives in Tallahassee Tesla Model 3 charges in Tallahassee, trunk open.

TESLA MODEL 3 PERFORMANCE

Tesla Model 3 Performance - Dual Motor Badge
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Tesla Model 3 Performance Tesla Model 3 Performance Tesla Model 3 Performance Tesla Model 3 Performance Tesla Model 3 Performance - Midnight Silver Tarmac Motion Tesla Model 3 Performance - Midnight Silver Tarmac Motion (wallpaper 2,560x – click to enlarge) Tesla Model 3 Performance - White Interior - Wide Tesla Model 3 Performance - White Interior - Touchscreen

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62 Comments on "Tesla Model 3 Inventory Claimed To Be Lowest Among U.S. Automakers"

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Kosh

(cough) Bob Lutz (cough)

Vexar

I wonder if he wonders if we will speak of him when he’s dead and buried.

Pluto

Well his prediction that Tesla wouldn’t 2019 is about to come back to haunt him. He’ll have to answer why Tesla is alive and doing well (aka validate their approach).

Pluto

Tesla wouldn’t see* 2019

Nix

Why would he be held accountable when there are a decade’s worth of people saying Tesla would die who simply move the goal posts every year?

There was even a Tesla death watch website. They are still watching years later

Henry

The 4 most shorted stocks are Apple, Amazon, Qualcomm and Tesla. All are household names, wildly successful with their products and most hated by the shorts. That would tell you a lot about them shorts.

NZ Prof

You misunderstand shorts. They are simply traders who think they can make money off a stock price dropping. However they can’t make money unless everyone else sell the stock thus forcing the price down, so part of their job is to write articles saying why the target is sh*t and going bankrupt. They often do not believe what they write, it just an attempt to make money – often a lot of $$$. Its not personal, its not emotional, its not hate.
This is particularly true of Seeking Alpha writers, except they are also paid by clicks so the more controversial the better.

YVES LAURIN

“so part of their job is to write articles saying why the target is sh*t and going bankrupt”, they are saying stuff to influence the stock market… hummmm.

I think the SEC should investigate

antrik

The others are not in the same category as Tesla. Companies with a giant market capitalisation will always have a very large short position in absolute volume — even if it’s not all that large in terms of percentage. Also, companies most likely to see a strong drop in sales in an economic downturn are always prime targets for investors hedging their long bets…

Most importantly though, AFAIK none of the others are seeing a massive smear campaign led by shorters actively trying to destroy these companies.

Val

Keep them coming. We can hardy wait.

Get Real

Well, we have had an open window here at InsideEvs on many of the shills, shorters and haters who often came here from Reeking Alpha and worse sites to lamely try and spin a highly manipulated negative spin on all things Tesla.

Some of these fools have even tried posting variations of their same crap under multiple usernames that I know has kept InsideEvs staff busy trying to detect and weed out.

Mostly though the shills, shorters and haters are so lazy that they simply cut and paste the same discredited serial anti-Tesla BS from the various BS websites and this too often encompasses even some of the lazy MSM unfortunately.

Examples of these more prolific usernames that I nominate for the Hall of Shame would include (names have been altered slightly to protect the identities) See 3 something, Svengali dude, DG the db, etc.

theflew

How can this be news if Tesla only allows you to preorder? Technically Tesla should have no inventory. Every car built should go to a buyer except for demo cars.

jelloslug

That’s not how the Model 3 is built.

theflew

Given they have a preorder list of more than 400k people the assumption would be until they build more than that you wouldn’t expect a real inventory. Sure they probably pre-build popular options and colors to maximize the factory output. But that very different than GM building Bolt’s that have no pre defined buyer.

Pushmi-Pullyu

Exactly. The slight overage that Tesla builds for Model 3 production (slightly beyond orders and needed demo/service loaner units) is almost certainly, as you said, just Tesla trying to maximize factory output. It’s not a sign that Tesla is planning to switch to the legacy auto maker business model of sending out most of its production to sit on huge dealership lots, hoping a buyer will come along to claim it!

I find it bizarre how some people keep imagining that Tesla is showing signs of becoming just another automobile maker. Why would Tesla give up its superior direct sales business model for the inefficient, outmoded independent dealership business model? Tesla has gotten rid of the middleman; they’re not about to put him back!

antrik

These are reservations, not pre-orders. Until people turn them into actual orders, Tesla doesn’t know what to build for them.

(And of course most of the reservations left at this point are likely waiting for configurations not available yet, or in markets that haven’t opened orders yet… Most new orders coming in right now are likely from people who never had a reservation.)

Pushmi-Pullyu

Correct me if I’m wrong, but build-to-order certainly is how 95% or more of Model 3’s are built. I think some people are making far too much of the relatively few Model 3 units Tesla makes “on spec”.

Doggydogworld

S/X are 95% build to order. They assigned your VIN before the car started production. Model 3s are batch-built. They take orders, build batches of cars in rough proportion to those orders, send those cars to staging lots, then match VINs to orders and ship the cars to their destination. It adds a step (staging lots), but streamlines production.

I think they still build a lot of Ps to order in the tent.

stimpacker

The FUDsters will say anything.
“Staging lots = no customers”
“Staging lots = poor quality cars that need repair but Tesla has no money for parts”

Yet tons of people in the forums are complaining of not getting their cars soon enough. I got mine recently but I think that was helped by the fact that I paid cash and had no trade-in.

Was just in a BEV event today. The organizers were neutral and promoted all BEVs.

Honda actually said they have Plug-ins Hybrids but instead brought in ICE vehicles and tried to steer people towards ICE.
Mitsubishi did the same too. Shameful.
Chevy brought several Bolts and offered test rides (kudos!)
No Tesla. They’re way too busy. 🙂
Probably low inventory too since Tesla even sold demo/showroom Model 3’s this past quarter. Haha.

Unplugged

“S/X are 95% build to order. They assigned your VIN before the car started production. ”

Silly rabbit. My Model 3 VIN was provided to me prior to production. You must just make this stuff up.

antrik

Nah, it has actually been reported a while back that Tesla moved to assigning Model 3 VINs at a later stage…

bro1999

Exactly. This is non-news.

Clive

Slow news day brosef ⁉️

Dav8or

Well it is a slow news day isn’t it? Bro is right, this is sort of a non story. Tesla’s sales model does preclude cars just sitting around on lots unsold for very long.

jeffhre

Yes pre-ordered, but still, I am curious. How exactly do FUDsters think 10s of thousands of Tesla vehicles get to buyers from the end of the Fremont assembly line unless they are at some point inventory – teleportation? The cars transported to Tilburg for final EU assembly – consist of smoke and mirrors, which will not be reconstituted until customers enter the delivery areas, with signed contracts? And the cars in stores and at Tesla events = holograms?

A company with a current run rate of ~300,000 deliveries per year, of course there is some inventory somewhere, if only to stage it prior to “in transit” from the factory, there will be some inventory, somewhere. at some time.

Mikael

I assume that having the lowest inventory is the best? Because having millions of cars just sitting on lots for people to buy “used” cars not with the specifications they really would choose if they could just seems stupid.

Buying a car should of course be done in the calm and quiet of your own home with a simple online configurator built to what you want and for a fixed price. Anything else is just wasteful….

Viking79

Having a 3 months supply or so is what most like. It means people can walk in and buy the car they want. I prefer Tesla’s model, order the car I want and pick it up in a few weeks.

I think logistics are more difficult with Tesla model, but don’t have to store 10s of thousands of each car. In traditional model dealerships do a lot of the storing so it is maybe easier for manufacturer.

Get Real

Yes, welcome to the future which doesn’t include sleazy salespeople at gouging stealerships trying to rip you off.

William

Some of the ICE OEM Stealerships DONT TRY, they Actually Do “rip you off”. Thanks to the FTC, and their ability to protect consumers, through their thorough investigations, some of these scoundrels (Sage Auto Group), are actually held accountable($3.6 million fine), for their crafty deception, and the multiple ways in which they Lie, Cheat, and Steal, from unwary consumers.

https://www.ftc.gov/news-events/press-releases/2017/03/los-angeles-based-sage-auto-group-will-pay-36-million-settle-ftc

Clive

Yeah man it’s time to get real.

theflew

I doubt this will be a long term way of doing things. It great when you have backlog with pre orders where you have a very good idea of the production mix. Once you get to steady state operations it’s easier just to build popular options and color mixes in well defined batches. It’s hard to do true mass production if you’re dependent on an order queue. So if you order black/dark gray with popular options you might get it very fast. You order a less popular color with few options it might take awhile because they’ll wait until they get enough orders to make that run worthwhile.

Pushmi-Pullyu

Not only that, but legacy auto makers and/or dealerships have to pay taxes on unsold inventory. Ouch!

Will

Manufacturers don’t drop off cars and SUVs at dealers, but dealers buy the cars and SUVs for the markets they are at.

Dante

Then the manufacturers drop off cars and SUVs at the dealers.

jeffhre

Old line manufactures put cars in the hands of shippers. OEMs say that they are then the responsibility of shippers and their insurers, until they reach the dealers

Some Guy

So what you are saying is, the stealers get them for really cheap and take additional money from the end-customer after giving a “discount”, and the customer ends up with a new car that is already on average several months old?
Why do I have to pay a middleman? It’s like getting served store-bought sandwiches (from a gas station convenience store) in a fancy restaurant with a mark-up. Or buying your groceries from a sleazy con-artist in the Walmart parking lot…

TM21

Model 3 will be ideal for Europe, where the parking spaces are smaller and many roads narrower. Then there is China. Both of these markets have not been tapped yet.

Chris

If you want an idea at he size of the market for model M3 in Europe just look at how MS sells compared to merc s class and Audi A7, then multiply that ratio by the number of A4 and bmw 3 and merc c are sold and you’ll begin to get a sense. They could sell a couple of hundred thousand per year in Europe if they could make enough to ship that many

antrik

I find it funny how people keep saying that the the Model S is too big for Europe… I guess that might be true for some historic city centres — but around here, I’ve never seen a Model S or Model X look out of place on roads or parking spaces.

Bunny

Building inventory and selling it to your dealer network is a business model that actually increases the capital the manufacture has to work with.

Of course Tesla effectively has no inventory , it’s not their business model and also they don’t manufacture millions of cars either.

Get Real

Yet!

Kbm3

No it doesn’t. They don’t get paid by the dealers for 60 days. Tesla is paid by the customer in fewer than 30 days,

Doggydogworld

The dealers pay immediately. I think when the car is loaded onto the truck, in fact. The manufacturer arranges floorplan financing, though, so most of the cash doesn’t come out of the dealer’s pocket.

jeffhre

Accumulating inventory is not capital efficient. It is a way of easing susceptibility to supply system shocks. Build to order is more capital efficient, but does not give any buffer to the manufacturer, in the event of supply system problems.

theflew

Build to order has more benefits for the manufacturer than the consumer. When you do a build to order you’re at the mercy of the production queue and depending on how popular you options/color choosen are you might have to wait awhile.

Scott

A small price to pay to be able to sit in front of my computer and build the car I want to buy. I have hated dealerships since my first experience at age 19.

Another Euro point of view

why so many claims before the full Q3 numbers are out in November as scheduled ? (profitability, inventory). Nervous ?

TM3x2 Chris

Projecting much?

Get Real

Not as nervous as you are Another Euro BS.

Another Euro point of view

🙂

Pushmi-Pullyu

Nervous? Long-term Tesla short-sellers like you certainly have good reason to be!

Another Euro point of view

I disagree with the archetype short-sellers at least on two topics, absence of demand and Tesla cars reliability. They do exaggerate a lot which I believe is counter productive. I do agree with them however that stock is way overvalued and am not about to change my mind on that topic.

Joe Martin

Does anyone else remember the first time they used Uber or Lyft? I instantly realized that all taxi companies were dead men walking, even if they didn’t realize it yet. That’s the same feeling I had when I drove a Tesla.

Bunny

Have ridden with too many stoned or ampped up Uber drivers…. never again

I’ll stay with cabs when available

Lyft as last resort

DL

No kidding. I drive through downtown and westside LA almost every day. Taxi drivers seem crazy to the uninformed, but Lyft and Uber drivers are absolutely the WORST drivers on the road. There’s no way I’m every getting in a car with one of those idiots.

Ray

I tried Uber once. There were about 10 cars around me, nobody came to pick me up after 10 minutes. One driver came one block away then turned around. I called Lyft and they came right away, so now I stay away from Uber. I have only used Lyft about 3 times, so I mainly stick to regular taxis if I have to take them. The Lyft rides were about the same price as a regular taxi, because I just go to and from the airport and the price might be regulated.

Pushmi-Pullyu

“We agree that this report comes as no surprise.”

Yeah, this “news” story is non-news. Tesla doesn’t send out its production in waves to sit in large dealership lots in the hope that their cars will find a buyer. The vast majority of Tesla’s cars are made to order. Most of what legacy auto makers call “inventory”, Tesla doesn’t have — or need — at all.

I’m always amused when Tesla bashers and short-sellers claim that Tesla will start running their business the way legacy auto makers do. Over time, I fully expect most of them to start doing things far closer to the way Tesla does! At least, the ones which manage to survive the EV revolution will.

theflew

I believe over time Tesla will move to distribution hubs. There just isn’t a good reason as they grow to do true custom ordering. I’m sure they have more than enough analytics to know what the distribution of car colors and options are. So sure you could do a custom order but the car is already built or soon to be built. You name doesn’t have to be on the car going down the line.

Eric

Then why is tesla still giving away free supercharging to any car they sell to move more inventory!?

Viking79

This allowed them to move more cars quickly due to the close proximity to the factory to get higher numbers in Q2 (shipping those cars to NY would result in them being delivered in Q3). They flooded the local market so they give some small incentives.

TomN

This is shouldn’t be news, but is worth mentioning because of the various short sellers and articles expressing alarm when they see Tesla cars being staged in a parking lot somewhere.

An example: do a Google search for StarTribune Tesla Mystery to find an article where they do the classic clickbait ‘false statements made into questions’ headings such as “Is demand softer than it looks?” “Are there quality or parts issues?”

Well, actually, no and no. In fact their inventory is the lowest among all U.S. automakers. So they should be directing all these questions to the other automakers. (But, of course, they won’t).

YVES LAURIN

Saying that the inventory is the lowest on model 3 is kind of funny, Tesla has no dealers to stock them, they only build model 3 that are sold, they have some inventory because some peoples are tired to wait.

Even if Tesla was able to increase the production by 2 or 3 or even 5; they would still have the lowest inventory