Tesla Model S US Deliveries Pushed Back Several Months For Global Expansion

4 years ago by Jay Cole 54

Tesla Notes Estimate Delays In US Shipments

Tesla Notes Estimated Delays In US Shipments

Make Way For RHD Deliveries - First To The UK In June

Make Way For RHD Deliveries – First To The UK In June

A major component of Tesla’s long term success and growth story is predicated on the rollout and adoption of the Model S outside of the United States.

That means that sometimes US customers have to unexpectedly wait a little longer for their vehicles as Tesla adjusts production to service those markets.

It would appear that one of ‘those times’ is this summer, as keen contributors at the Tesla Motor Club and on Reddit have noticed Tesla is now estimating wait times for the Model S that are 2 or 3 months longer than was the case in April.

Tesla estimates that a 60 kWh or 85 kWh version of the Model S ordered today will not be delivered until September, while customers order the high-end 85 kWh Performance Model S may receive their EV in “late August.”  Prior to this month, it was not uncommon to see US cars only take 7-8 weeks to arrive.

The Tesla Model S On Display In Japan - First RHD Deliveries There To Happen Late This Summer

The Tesla Model S On Display In Japan – First RHD Deliveries There To Happen Late This Summer

The specific cause for the increased wait times?

There has been some speculation that the recent first deliveries in China mean that volume production has been diverted to satisfy the rather large backlog of orders in that country – and that is certainly likely to be a component of the lengthening of US wait times.

However, the RHD (right hand drive) version of the Model S has been delayed numerous times for the UK (and by extension other RHD regions), and we feel that is mostly likely being the short term disruptive influence on US production and delivery.

Tesla Model S - Already On The Roads In China

Tesla Model S – Already On The Roads In China

In fact Tesla’s most recent 10-Q says as much:

“We plan to expand in China as quickly as possible because we believe that the country could be one of our largest markets within a few years. In addition to increased deliveries into China, our expansion into the right hand drive markets, such as the United Kingdom, Hong Kong, Japan and Australia will occur starting this summer.”

The company also warns that this period in their history may be the first time they are unable to hit sales estimates (pegged at 35,000 for 2014) due to difficulties getting the car to market internationally.

“We have not delivered Model S vehicles outside of North America and Europe in volume; thus, we may face difficulties meeting our delivery plans in Asia and right hand drive markets later this year, which may impact our ability to achieve our worldwide delivery goals.”

As for the RHD UK editions of the Model S, Tesla made a special note of the timing in their Q1 shareholder letter:

“Our addressable market will increase with the launch of the right hand drive Model S in the United Kingdom next month (June)…”

Reddit, TeslaMotorsClub

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54 responses to "Tesla Model S US Deliveries Pushed Back Several Months For Global Expansion"

  1. Taser54 says:

    Logistics problems with only one model? This does not bode well for additional models. I wish them the best, but this should have been ironed out earlier.

    1. Mint says:

      Right now *is* “sooner”.

      Tesla’s original plan was to focus on the Model X and gen 3, but with Model S demand so strong and reviewed so well, they shifted course to increasing Model S output and getting it into new markets, all the while taking their time with the Model X design (every engineer would like more time on a product’s design if they can have it).

      1. See Through says:

        “model S demand so string …’ – Please, don’t make people laugh. If it was so strong, why go chasing 10-15 sales in each country around the world? Why not fulfill the orders in US, and show sales and profits?
        Tesla is the master of excuses. Comes up with all sorts of excuses for its ebbing demand and delivery numbers.
        The most likely cause for the delay is its re-doing of the cars that keep coming back for repairs.

        1. peet365 says:

          Tesla wants to sell 100k/pa of model S and X cars in 2-3 years. US has potential maybe for 50-60k. You have to build up a market in rest of the world – easy to understand for people who want to.

    2. Nix says:

      Yea, it sucks so bad for a company when demand for their product is through the roof. What a horrible thing.

      /sarc

      /dumbarse

  2. Big Solar says:

    Well, that will help the used market as I may sell mine this summer and wait for a Env200. (more practical for me)

    1. David Murray says:

      I’m having difficulty imagining anyone selling their Tesla to get a Env200.

      1. Big Solar says:

        I rarely drive it. I have an Imiev that I drive much more….. I am hoping for a 125/150 mile Env200.

        1. Gsned57 says:

          Gotta ask why you’d drive your imiev with a tesla sitting in the garage. Personally I do t give a damn about image but believe I’d enjoy driving more if I were driving a tesla.

          1. Big Solar says:

            It is a lot more fun to drive but the Imiev is cheaper to drive and easier to get around the city in. I bought the Model S for 2 reasons, 1. to support Tesla and 2. for long distance drives. I find myself almost never driving more than 30 miles one way so it sits in the garage alot unfortunately. Definitely the best car ever made though just not practical for me to drive everyday around the city.

            1. koz says:

              I understand maneuvering and parking is easier in a congested city but less cost. Yes, the Imiev is more efficient and less costly but based on your limited driving, you are literally talking about pennies and the Model S ain’t cheap.

              1. Big Solar says:

                Saving penniies is how I bought the MS. 14 years of saving change and I paid them cash.

        2. Mint says:

          I take it you bought the iMiev first, because the savings of an iMiev over a Tesla are over an order of magnitude too small to justify the cost of an iMiev.

          But if you’re not driving it, then I suggest selling it ASAP, because depreciation on the Model S or any car that expensive (even with low mileage), is too much to justify. In two years or whenever you start taking more road trips, you can buy the same car you would’ve had (used 2013 Tesla) and save a bundle.

          1. Big Solar says:

            I think you are correct. It only has 4000 miles as of now and wont have more than 5000 by the time I sell it. I got it back in November.

            1. koz says:

              Is it an S85?

              1. Big Solar says:

                Yes it is with leather and suspension………

            2. See Through says:

              There is a bunch of low mileage model S on sale on ebay motors. Looks like many people bought this on a whim, but now want to sell these cars.

              http://www.ebay.com/itm/Tesla-Model-S-85kW-2013-tesla-model-s-85-kw-/281339083437?forcerrptr=true&hash=item41811dbaad&item=281339083437&pt=US_Cars_Trucks

              1. Big Solar says:

                A lot of people do what I do and that is buy a Tesla to support Tesla, get the tax credit and have the best car ever made for a while, then sell with low miles and either buy another one (which I may do) or maybe another EV or EREV. I still may upgrade to a P85+. I still wont drive it much but it sure will be fun when I do.

      2. See Through says:

        I’m having difficulty imagining anyone buying this piece.

        1. Big Solar says:

          Seems like you have other difficulties too.

    2. Clif says:

      I love this website because it is a wealth of knowledge. I had not heard of the Env200. I looked it up and it IS an intriguing EV. My benchmark remains that I need to have an EV that will get me from Phoenix to San Diego on a single charge. Right now, that is the Tesla. IF ONLY other manufacturers would understand that RANGE is a critical element of an EV, at least for me. Some folks need a little run-about EV to go to and from work. Being retired, I need an EV that I can use to travel out of state as well as in town…a complete EV…and right now that is Tesla. I hope I last long enough for the Model E (if it will be called that) to come out. Thanks for the knowledge folks!

      1. Bonaire says:

        It is too bad some people don’t factor in EREV vehicles as EVs. Chevy’s Volt is an EV and has no range issues. Same for PiP and Ford’s Energi models. You can drive a Volt 100% electrically around town and even over 100 miles a day with plugging in at work and opportunity charging. Drove mine today 43 miles in the morning, plugged in and drove another 20 around the house this afternoon. Volt has no range problems at all. My first drive in it when I bought it was 1023 miles.

        1. Clif says:

          People are very loyal to their Volts, but I just don’t see them as a true EV. It would be like trying to claim that a train locomotive is an electric train because the power comes from electric motors. Problem is that the power comes from burning diesel fuel, just like the Volt’s extra range coming from burning gasoline. I guess it just depends on someone’s definition of what an EV is.

          1. Big Solar says:

            The volt is playing a big part of the transition to EVs though.

            1. Bonaire says:

              Very true. The Volt offers all aspects of EV driving and also no range anxiety.

              Imagine someone has a 20mpg car. They buy a Volt and drive 90% electrically and get over 120 lifetime mpg from the Volt. EV purists snub their collective noses at this amazing accomplishment, all for a desire to buy an $80k BEV over a $35k EREV. It is not a binary world.

              One day, battery tech will allow double to triple cell density. That will make it far more important in electrifying the true oil users out there, our larger CUV and SUV models that many families drive in a great EREV cycle – a lot of small trips and the occasional really long weekend outing where stopping for supercharging is not really a convenience based on time or destination locations. Public charging will be lacking 10-15 years from now to make BEVs still a hard decision for common drivers.

          2. Raymondjram says:

            The Volt is an EV. Tt drives 100% on battery power. And it was designed to carry a range-extending generator on board.

            1. Big Solar says:

              True, I guess they give it a different name to discern it from a Battery car without a generator.

            2. Mikael says:

              It’s a PHEV. It has a petrol engine and an electric motor. The wheels are (almost all of the time) powered by the electric motor because the motors are put in serie and not parallel and that makes it a series hybrid.

              It’s a long range PHEV which offsets 70-80% of the petrol on average, which is great.

              It’s kind of sad that some people want to try to make it into a wannabe-EV which will always make it inadequate instead of it getting the credit of being the longest range PHEV on the market which it is.

              1. Bonaire says:

                People are simple. They spent high school trying to be cool and not smart (in general) so the mass consumer cannot really think beyong ICE or BEV. EREV? Too complicated. Why do this *and* that when you can do this *or* that. This is also why people rarely order a Banana Split ice cream dish and only go for a single topping sundae.

  3. pjwood says:

    Not a good sign, and painful to read into.

    1. David Murray says:

      Not a good sign? I see it as a problem of not enough supply to meet demand. I think that is a good problem to have.

      1. Big Solar says:

        I think so too, much better than the other way around.

      2. Mint says:

        I think a better way to word it is “too much demand for even growing production to meet” 😉

      3. SeattleTeslaGuy says:

        Yes, it means that they can expand production and still make sales. In a competitive market, it’s actually bad but, as we all know, there simply is no competition for the Model S. And, there really isn’t any competition on the horizon. (no, a 150 mile range LEAP simply won’t cut it.) Strong demand will eventually lead to actual competition so good execution by Tesla in the next 12 months or so is critical. That is the point in the 10-Q comment about hitting 35K sales.

  4. Rudy Clarke says:

    Sometimes I think the EV community underestimates the challenges with exporting globally from one geographical location.
    I formally worked for a multinational and we only supplied one regional block and that kept the plant running/utilisation well above 85 % which was excellent for business.

    China looks like it will indeed be a boom for Tesla, so the faster they can partner with a local manufacturing concern to get Model S made locally the better.

    With respect to the RHD version, I suspect the UK, Japan and Hong Kong market demand will surprise them. I too am waiting of the RHD version as the LEAF is limiting with only a 160 km on tap, but Gen 3 would be perfect!

    1. See Through says:

      you are exactly right. Tesla is just fooling investors, pretending demand is high. Why enter the tough China market if it can’t fulfill demand in US? The US market is being flooded with used Teslas, and there isn’t much demand for new Teslas in US. That’s why Tesla comes up with these tricks.

  5. Bonaire says:

    This really isn’t “several months” but rather about one month which is a conservative move due to the July plant reconfiguration. It may come back once they know the line is back “online and moving” again. Who knows. But serveral months – that kind of headline is maybe trying to move the stock and seems to be a little extreme.

    1. Jay Cole says:

      I think the title is fair. We had many Model S deliveries taking as little as 7-8 weeks earlier this year.

      In theory going by the changes stated by Tesla, a standard 60 kWh/85 kWh car ordered on May 1st could now take as long as 21 weeks if ii is delivered the end of September, or as short as 16 weeks if ordered today and delivered on Sept 1.

      …but you are right, there is a good reason for the delay whatever it ends up being

      1. Bonaire says:

        Earlier? Guys ordering last week (thru 5/11) are getting end of June deliveries including one in Quebec.

    2. Big Solar says:

      You think they are lying to get more sales?

      1. Bonaire says:

        @BigSolar: Nobody is lying or whatever. I believe it is simply a push-out of the “expected delivery” month tag (which is a really general name of a month) by one month because the factory will be stopped for reconfiguration. It is something that I would do if I didn’t know how many exact days the factory reconfiguration shutdown will take. What if it takes 3 weeks instead of 2 and you promised someone a late July delivery but cannot deliver? That is bad customer server. Now, offering a September delivery date and bringing it in early “excites” the buyer. Has been happening for a long time now. People order seeing one date, their DS calls and says “want it early?” Excitement ensues. A variety of people reported on TMC that they got that call during this month and were moved up 1-2 weeks earlier. This is “under-promise, over-deliver”.

        The press and stock watchers may think this is due to demand growth – but it happened overnight and is just in time for the factory shutdown happening in one month. Cars to be delivered at the end of June are those ordered up through about May 12 for US destinations. Now, how else can we deduce that the new delivery date is pushed back a month? It’s because in early July, the factory is shut down for a couple weeks, give or take. I imagine it is a big change to the factory and they must be sure that the new two-line operation runs well. It cannot be a small feat to accomplish.

        1. See Through says:

          Bonaire, Good oto see that some people are still sane! The reason for this sort-of false reasons given by Tesla is exactly that – to fool stock watchers into believing the high demand, which in fact doesn’t exist. Otherwise, people ordering in may wouldn’t be getting the car in June.

          1. Bonaire says:

            Sometimes, being sane is a lonely place.

            In the movie “revenge of the electric car” Musk proclaims “we must ship these cars”, meaning the group of roadsters collecting in the one scene. I can see this happening now. The more they ship, the more on the road and the more chance that can lead to referral sales and more orders. However, if there is any indication that the demand is not there, this is a very closely held issue that is never going to be discussed. By putting out a guidance early this year of 35,000 deliveries, I think that was a hail mary gamble. A “build them and they will sell” situation. Worst thing that can happen is 10-15 loaners build up at each store and service center location worldwide.

            There was a recent article about how auto makers cannot shutdown manufacturing easily. They would rather create a glut of excess for some time and hope to see more sales if they offer incentives. Tesla can also participate, if needed, by having inventory cars available at $1k discount per month of age, as they have done. Building more to keep the line and costs efficient can work for them in the short run. Don’t know what that does to them in the long run.

  6. Brandon says:

    Just buy a used one and get it right away! I went for a ride in a P85 yesterday and the acceleration is insane. Like, Wow.

  7. MoxP says:

    Th truth is that Tesla is having trouble meeting 35K deliveries in 2014; yet the bullish valuation estimates have it hitting 500K per year by 2020??!
    Pure comedy.

  8. Kilgore Trout says:

    EV buyers need not worry, as the BMW i3 will be available during Tesla’s quiet period.

  9. no comment says:

    i think that this is a smart strategy but one with significant risks. the Model S is a kind of rich man’s VW; the low 6-figure cost is well within the reach of the high income customers that are the key market segment, but there are only so many of those people and sales growth is bound to start to tail off as Tesla reaching maximum penetration in that segment. a declining sales growth rate would have a fairly strong negative impact on the Tesla share price.

    so continued sales growth will require expansion into new markets, but expansion into new markets means increased resources for homolongation and support in multiple markets. and it increases exposure to product issues that may asise in different countries. this will also be a fairly expensive undertaking so i would expect profitability will take a hit but markets can overlook that kind of thing depending on the reason for the profit decline.

    1. See Through says:

      +2. Couldn’t agree more.

    2. Bonaire says:

      Declining sales growth is already happening in the US due to the build-out of the order backlog that came in for a couple years prior to initial production in mid-2012. Tesla will sell fewer cars in the US in 2014 than 2013. But the US population is only 4% of the world’s population, but has more millionaires per capita than anywhere else. Being rich does not mean you will buy an expensive EV unless you possess the hobbiest mentality to try something new, are a little green and want to buy a domestic made car. Many rich people are very conservative in their choices and many millionaires buy used cars on the cheap.

      1. Mikael says:

        The US is not in the top 5 of countries by millionaires per capita. So there are plenty of other richer countries to try to sell the car in. But the rest I agree with.

        1. Bonaire says:

          Based on the data here, I hope I’m close to right regarding who has the most “rich guys”. Maybe it is per-capita, maybe not but it looks pretty good to say USA is at the top. Maybe S.A. or UAE has many super-rich but not sure about “per-capita”.

          http://en.wikipedia.org/wiki/Millionaire

  10. Josephus says:

    The idea that Tesla is hiding lack of demand by artificially creating wait-lists is absurd for its quarterly statements, and the readership here knows that. But please don’t stop trolling, I need a good laugh every now an then.

    I agree the reasons for the delay (battery supply and factory shut down) are understandable, and don’t pose long term threat, but the emotional child in me (read investor) doesn’t like delays here or on the model X. Especially when we are not used to them from Tesla. Reducing delays needs to become a bigger company focus.

  11. Ryan says:

    If sales can’t be made; that is money lost.

    In the market for a new car? Who wants to wait a bunch of months for anything. Paying almost a hundred grand or more. Unacceptable.