Mar 23, 2012
tdelta1000 When will Tesla Motors decided to move to the stated Model S 20K units annually? Will it be after the initial 5000 unit are sold or will TM wait for a second 5000 units are sold to move to the 20K goal?�
Mar 23, 2012
AnOutsider It's 20k per year right? So they do the slow ramp up this year (half a year really) to 5k units, and I expect they want to do 20k in their first full year (next year). Right now they're at about 3k for 2013 (not sure if that includes European), so they've got a ways to go, but reservations may pick up once cars are actually on the road.�
Mar 23, 2012
richkae I know several people who are seriously interested in the Model S, but they won't put down a deposit until they can test drive.
5000 cars in the 2nd half of 2012 is 10000 cars per year - but production isnt flat.
If Tesla starts at 0 per year half way through 2012, and linearly ramps up production until the end of 2012 and deliver 5000 cars in 2012, they will be producing at a rate of 20000 per year at the start of 2013.�
Mar 23, 2012
ElSupreme I bet Tesla Runs very close to the "20k per year" rate in late 2012. They will continue to run at that rate until they start building an inventory. I think they will be able to run that fast until at least the end of 2013. After that I don't know if they will need more or less production. But I bet they run that rate if there is any continuous demand for the Model S, even if they have to halt production for say 5 weeks.
20k a year is ~80 cars a day. I bet they hit that around November this year. I also bet they try to run 100 cars a day for a week or two before settling down to their desired 80 cars a day rate.
I bet Signatures are produced in the 10-20 per day range, where they slowly bring up line speed, but don't run it for 10 hours. And by the time they hit the P cars they are going to want to be running 80 cars a day.�
Mar 23, 2012
smorgasbord 20,000/yr is 1666/month, or about 78 vehicles/day.
My thinking is they need to ramp up from about 1 vehicle/day (Founders series) in July to 78 vehicles/day in late December 2012. Doing that ramp-up linearly does not quite get them to a total production of 5000 vehicles in 2012, so the ramp-up will be non-linear. Especially in the beginning, there'll be fits and spurts as QC finds problems and halts the line until they're corrected. Also, Tesla may decide to not reach the 20K/year rate right away, seeing how demand continues before making too many cars. Besides quality, there are volume handling issues (getting enough raw materials in, storing finished sub-assemblies for installation, etc.) to work out.
That all said, I think when test drives are available to non-reservation holders, reservations will spike up. And when there is little to no backlog, sales will go up since some people only buy cars off the lot. So, there will have to be some inventory at the Tesla Stores all the time. That will be the real test for demand. When there are Model S's "on the lot" will sales be at the 20K/year pace? With, say 32 Tesla stores worldwide, each store needs to move 52 vehicles/month - or just under 2 per day. Can they achieve and sustain that rate for 18 months with a car whose median price is around $75K (before tax rebates)?�
Mar 23, 2012
richkae It will be very interesting what the real median price is - especially after ignoring the first few thousand sales to early adopters.
Polling people on TMC isn't super meaningful, because we are early adopters.�
Mar 23, 2012
ckessel I suppose this is part of the "what worries you most" thread, but there's a fairly tight window after Tesla starts shipping to when they run out of preorders. It's taken years to get the orders they've got now, but it's only 6 months worth at full speed (~10k preorders, ~20k a year eventual run). Now, due to ramp up, it'll take 9 months or so to actually get through those first 10k orders.
The theory is that orders will increase heavily as the car gets on the road, seen, reviewed, etc, but there's a lag between awareness and orders rolling in. Is 9 months a long enough window for demand to kick in and keep Tesla at 20k a year? Or is there going to be a dip sometime in the middle of 2013 where demand hasn't quite kicked in enough? A dip wouldn't be inherently bad, just part of the nature in that delayed market awareness, but it's something that would need to be managed ahead of time to avoid a sudden set of layoffs.�
Mar 23, 2012
richkae I would think that the number of people willing to put a deposit down on a car is a fraction of the car buying public.
The number of people willing to put a deposit down on something they won't get for more than a year is smaller.
But its an even smaller fraction that are willing to put down a deposit on something they have not test driven or ever seen the final version.�
Mar 23, 2012
Iz If TM can get the first 3k vehicles before end of year it might be a good time to consider some advertisements in early 2013. A few well-placed ads and a growing number of vehicles on the roads could easily bring in another 10k reservations. They would definitely require at least one vehicle per store to offer test drives. Many of those potential buyers will be looking for something more substantial and not what we have been doing for the past several years.�
Mar 23, 2012
Arnold Panz Let's keep in mind that Tesla has managed to secure over 8000 reservations that no one has gotten to test drive (or see the final version of), and if reserved today would still have to wait over a year to get delivery. They've also done this with absolutely no traditional advertising whatsoever. There's an interesting story in today's NY Times about how young people don't really love cars the way generations before did. To Draw Reluctant Young Buyers GM Turns To MTV for Help
I think the Model S is something that young people would really love once they saw and it and understood what it was all about. 95% of the people I talk to (of all ages) about Tesla have never even heard of the company, let alone the Model S. Once it's out in the marketplace and there is no long delay in getting delivery, and assuming it's favorably reviewed by critics and owners, I fully expect they'll be able to sell 20k cars a year with ease.�
Mar 23, 2012
Iz Some young people may see Model S as an extension of their iPods. They will have an easier adjustment to plugging in Model S or a future EV.�
Mar 23, 2012
Larry Chanin As long as there is a backlog of orders it would be unwise for Tesla to resort to conventional advertising to build demand that can't be immediately fullfilled.
I agree that it would make sense, and cost less than conventional advertising, to ensure there are sufficient vehicles at stores and touring around the country to offer test drives. In particular Tesla should make a point of also showing entry-level cars.
Larry�
Mar 23, 2012
ElSupreme I would like to bring up one point. I feel that soon after delivering the first 100 or so cars (assuming it is on time an smooth) Tesla will roughly double their current wait list with people waiting for them to look REAL. I personally said goodbye to my $5000. I won't be heartbroken if it just vaporizes. Sure I will be mad but I made myself know that I could very well never see it again. I don't think very many people are willing to split with $5000 unless they KNOW other people are not getting ripped off.
Granted in mid August Tesla won't get 10,000 more orders. But I bet between August and March 2013 Tesla OVER doubles their current order number. I have my mom convinced that Tesla is the next best thing, but her lease isn't up until Dec 2013 so she has no interest in putting her deposit down. Heck she even asked if she could put her money now and just ask for a December 2013 slot.�
Mar 23, 2012
vfx But that does not mean they will buy a very big car. One that costs $50,000. A Leaf seems more likely. Smaller, a major maker, lots of ads on TV.
That said, the bluestar might be perfect timing in the big ramp up to everyone learning about electrics.�
Mar 24, 2012
jerry33 I thought hard about a Leaf--even put down the $99, but in the end I didn't get one because I just couldn't see paying $36,000 for a car that can't be counted on to go more than 60 miles. Also the dealers were just not interested in even discussing a Leaf purchase. I suspect that if the Leaf fails it will be because the dealers killed it.
I am so looking forward to the Tesla sales experience.�
Mar 24, 2012
dsm363 I can see the base Model S appealing to young professionals in their late 20s who have been studying a long time and are just in their first big job. They may want to reward themselves and pick something more modern and clean like the Model S.�
Mar 24, 2012
ElSupreme Hmmm ... That sounds a little like myself! Except that studying thing. I was more interested in beer, bicycle races, and more beer. Granted I did do well in college.�
Mar 24, 2012
dsm363 Must be that raptor like instinct that allowed you to attack tests=) Good to see the old raptor avatar back.�
Mar 24, 2012
ckessel Not sure what sort of professionals you're talking about, but as a software engineer, which is a reasonably well paying job, there is absolutely no way I could have afforded the equivalent of a base model S at that point in my life.�
Mar 24, 2012
dsm363 Mainly physicians and maybe lawyers I'd guess after being in school into their late 20s/early 30s. I didn't mean to imply it would be easy or smart for someone that age to go for it financially just responding to a previous post about what kind of young person might go for a Model S.
I hope that once Tesla fills their initial rush of orders that with people driving around (free advertising) that enough orders come in to keep them at their 20,000 annual production capacity.�
Mar 24, 2012
jerry33 When I first bought my Prius, I was the only one--now there are at least three on my block. It would be cool to see three Teslas on my block next.�
Mar 24, 2012
tdelta1000 After reading the posts to the thread, it looks like Tesla Motors must get demo cars into the stores for test driving, get the first several hundred Model S on the road and then rev up their advertising campaign to get to the 20K units annually mark. I truly think that Tesla Motors can meet this goal.�
Mar 24, 2012
Iz TM should consider some of the posters on this board when pitching their advertisment ideas. If you watch SyFy, this is the "Eureka" of EV knowledge.�
Mar 24, 2012
Trnsl8r I'm inclined to agree. I went to test drive a Leaf (and a Volt) just to have something to compare with... and the dealer experience was less than stellar. A young smooth talker took me out on the test drive. When I wanted to ask details he quickly deferred me to their "EV specialist", when we quickly switched to talk about the Model S(!). Then he made some peculiar statements. With my reservation number I definitely wouldn't get the car this year (later refuted by several TM people, including GeorgeB) and that he with his reservation (high 2000's) he had already test driven the car and locked in his options (this was a good few weeks before this thread appeared: It's Time to Build Your Model S ). Weirdest experience...
The Volt guy at the Chevy dealer was much better, but that could be because he wasn't actually in sales... :-/
OK, enough of the off-topic from me...�
Mar 25, 2012
tdelta1000 +1...lol�
Apr 3, 2012
HawaNY Has anyone seen a market analysis of how many buyers are out there that have garages, i.e. the least trouble installing a home charger. I live in a city and I'm always sad walking down my block and seeing all the cars that CAN'T easily be Teslas, at least not right away, because they live on the street more or less permanently.�
Apr 3, 2012
Larry Chanin That is true. However, it should be remembered that electricity is more ubiquitous than gasoline stations and gasoline stations aren't located at every parking spot. It may take a little time, but the rollout of charging infrastructure will be a lot faster than for the initial gas stations. As you know there is much less regulation and environmental issues as well as costs for charging stations versus gas stations, and it is quite feasible to even have them in apartment complexes eventually.
A friend who is in the charger business mentioned to me recently that a developer of a luxury condominium in Ft. Lauderdale is installing chargers in every parking space in the building. I view this as a precursor of things to come.
Larry�
Apr 3, 2012
Uncle Ron EDIT,,�
Apr 3, 2012
Lloyd Wow, I wonder what their Electrical Load calcs look like. They have to plan for everyone charging at the same time!!�
Apr 3, 2012
dsm363 That truly is a smart thing to do, especially if you're building the property from scratch. The cost to add them up front must be almost nothing compared to the entire project or to trying to add them later.�
Apr 3, 2012
EVNow That is just like everyone running AC at the same time ...�
Apr 3, 2012
Lloyd True, but about 3 X. If you have 30 amps air conditioning, and two parking spots per unit and each spot charges at 30 amps, that 3 x the normal load for the same building without charging.�
Apr 3, 2012
de704 Two things..
1.) Model X comes on line at the end of 2013. That's another waiting list to work through.
2.) More importantly, Tesla still hasn't advertised yet.�
Apr 3, 2012
Larry Chanin Hi Lloyd,
Isn't is unlikely that a luxury condominium in Florida would only have just 30 amps for air conditioning? My normal home has two air conditioners with 60 amp circuits for each compressor plus additional 30 amp circuits for each of the air handlers.
I frankly do not know whether the developer prewired two parking spaces per unit. I think one per unit would be an admirable start.
I don't think the comparison with air conditioning load is out of line.
Larry�
Apr 3, 2012
Lloyd Not out of line Larry, I was just trying to get a handle on the requirements for all the charging for every space in a large building. Is 30 amps per unit out of line for a large building? I was just estimating and comparing.�
Apr 4, 2012
Cobos If they are connecting up every parking space I would say a moderate 3-5kW charging service for each point would be fine. Even just 16A 120V should work as you trickle charge it every night. If there is enough units and they expect lots of EVs then 1-2 quickchargers with a pay-to-use service on the premises should handle the few instances where trickle charging wasn't enough. That should also spread the load evenly around day-night cycle.
Cobos�
Apr 4, 2012
Larry Chanin I agree and think that Tesla will be able to hit their target rate of 20,000 per year, and that they will likely continue until they start building inventory. It would be very unwise for a startup company to permit production to exceed demand since inventories could seriously jeopardize Tesla's long-term viability.
I mentioned in another thread, my greatest concern is that for such an expensive car it may not be possible to maintain demand of 20,000 cars per year for "normal" buyers after the early adopters and EV enthusiasts have made their early purchases. This may be made more difficult since Model S demand may erode somewhat because some prospective customers will be attracted to the Model X.
I also think that Tesla should continue its practice of avoiding conventional advertising for as long as possible, and should only consider pursuing this course of action until they are firmly in the black. I know this is a chicken and egg proposition, but it is safer if they exercise patience by reducing production rates to match current demand and being content to remain a niche market for a while longer.
They may have to wait until battery advances make selling to the mass market more feasible and the typical buyer has acclimated to the idea of electric vehicles. Moving to a conventional advertising plan prematurely could burn through a lot of cash without gaining buyers if Tesla gauges price points and timing of EV adoption incorrectly.
In contrast, their current strategy of building cars to demand without large inventories and conventional advertising avoids these dangerous financial uncertainties.
Larry�
Apr 4, 2012
AnOutsider Larry,
I don't disagree, but I also wonder if waiting TOO long to begin advertising could yield the result that the average buyer thinks Tesla is some newbie "following" the other automakers into the EV space vs being pioneers and frontrunners of it. They might think "if they are so great, why am I JUST hearing about them?"�
Apr 4, 2012
Larry Chanin There is nothing wrong with being in a niche market. Ferrari, Lamborgini, etc. have no problem with maintaining a high profile. :wink:
Larry�
Apr 4, 2012
tdelta1000 I must agree.�
Apr 8, 2012
neroden I suspect that the rush of "it's real" reservations, together with the planned expansion of retail stores, will fill up the queue for 2013. For 2014, I think we heard that the plan is to produce S and X on the same production line, which would mean that they could reduce production of Model S if the demand drops off. However, sometime in late 2014, it's probable that they'll have to either advertise, discount, or start producing inventory. There's time enough before then to not worry about it now.�
Apr 9, 2012
jerry33 I'm not so sure about that. By then there will be quite a few out there and neighbours and co-workers of the people who purchased them will see them in action and continue the demand (always assuming that the Model S is as good as it's supposed to be). That's what happened with the Prius and I see no reason why the Model S will be any different.�
Apr 9, 2012
EVNow Going to EVs is a leap of faith. Going from ICE to Prius wasn't as big a jump.�
Apr 9, 2012
jerry33 Not in 2001 it wasn't:smile: That's when I bought the first one.�
Apr 9, 2012
neroden Quite possible. By late 2014 Tesla's situation will be quite different anyway; hopefully store expansion will also be boosting sales.�
Apr 9, 2012
ckessel If Tesla hits it's numbers and becomes profitable in the 1st half of 2013, it'll get huge press for that achievement alone. First auto company in an eternity to do so, interviews, press releases, etc. All that visibility will be free advertising.�
Apr 9, 2012
onlinespending they don't even compare. you fill up a Prius with gas just like you did with any other car you've driven up until then. what happens inside of it is of little concern to most people. Having to plug in your car to an electrical outlet and be concerned (albeit a small amount) about range is a huge shift in the way we think about cars.�
Apr 10, 2012
Norbert Hey, that's supposed to be the good part.�
Apr 10, 2012
Norbert That will change soon enough.�
Apr 10, 2012
tdelta1000 I agree with this statement.�
Apr 10, 2012
Larry Chanin
I don't think it is inevitable that by 2014 Tesla will have to advertise, discount or start producing inventory. As you point out, producing both the Model S and X on the same production line should assist in matching overall demand to production, and new stores will help demand. Tesla was profitable as a niche manufacturer when it was only producing and selling the Roadster. It was the outlays for design and production of the Model S that put Tesla in the red. I believe Elon's statement that in 2013 Tesla will become profitable again, but it will still probably remain a niche manufacturer.
It really depends on how much patience Tesla exercises. There is no compelling reason to force the issue of entering the mass market with luxury cars if the demand does not materialize for typical consumers. The first priority is to remain viable while the mass market gets acclimated to the idea of electric vehicles, and as charging infrastructure develops. Staying the course by building to actual demand with minimal conventional advertising, and inventories is the safest approach, and that might even mean reducing planned production levels if demand doesn't initially meet target volumes.
If Tesla over extends itself by resorting to conventional advertising and building inventories they might not have sufficient resources to pursue development of the lower priced Bluestar specifically targeted for the mass market. Discounting should only occur when there is a reason to discount, for example when a more advanced and economical battery is available, or where there is sufficient actual mass market demand as demonstrated by reservations.
Larry�
Apr 10, 2012
doug Not sure that's true. Tesla had one profitable month (I think July 2009?) but that's because they stacked a bunch of Roadster deliveries into that one month. My guess is as a company they wouldn't be profitable on just Roadster sales (including all the overhead from the stores) and the drivetrain business. Which is why they've staked so much on the Model S, and from what I've seen I believe it's a good bet, assuming they have a smooth launch and ramp-up.�
Apr 10, 2012
Norbert What Elon said repeatedly is that Roadster and powertrain business by themselves have been profitable in the recent past (that was before they stopped building the Roadster for the US, of course). Whether that includes the stores, I don't know specifically (they've become Model S stores more and more), but as Larry says, it seemed that growth and investment related to Model S are the factors precluding an overall profit.�
Apr 10, 2012
vfx If not privileged information this would be a good story to highlight in various media and EV websites. Can you share details on this teachable moment?�
Apr 10, 2012
Larry Chanin I don't have access to the details. I'll contact my friend and if he is at liberty to provide additional background information, I'll ask him to post here.
Larry�
Apr 12, 2012
Ken Stokes Boynton Beach Developer MF charging
Hi Larry, Ken Stokes here. My developer client didnt install chargers in every unit but rather pre-wired all 456 units in their luxury apartment complex to accomodate EV chargers. The upgrade involved running 1" smurf pipe from the panel to a 4"x4" quad box to accomodate chargers; installing 40 amp breakers in the main panel; and upgrading the secondary feeder from the transformer to each unit's panel from 100amps to 125 amps. Good stuff. Ken�
Apr 16, 2012
VolkerP Relying on a steady supply of affordable gasoline is a leap of faith. Premium lurks around US$8/ US gallon last week here.
Tesla will have no problem selling 10k vehicles in Europe every year following 2013.�
Apr 16, 2012
ckessel What's the gas/electricity cost ratio in Europe? Obviously it'll vary, but I'm wondering what it is relative to the US. In my state, it's nearly 20:1 (4.2 cents per kwh at night). In other states though it's closer to 4:1. By 20:1, I mean it'll cost me 1/20th as much to drive an EV mile than an ICE mile.�
Apr 20, 2012
neroden Actually, I agree with you, it's not inevitable. Do note that Tesla started producing inventory of the Roadster before it ended production, however; three years is a good long time to go before producing inventory, but they did start producing inventory eventually.
One thing about inventory is that keeping a small (SMALL!) inventory will probably boost sales *again*, among "I want it now, not six months from now" people, so I think after they start producing inventory, they'll find they don't need to advertise or discount for *another* couple of years. Meanwhile they'll be focusing on releasing their next car model....�
Apr 20, 2012
Rifleman Another reason to produce inventory is that often a car is not a purchase that you can wait 6 months for. I personally buy my cars new, and then drive them until they are worn out and not worth putting more money into for repairs. When one of my cars reaches this point, it is sometimes sudden, and I cannot wait 6 months to get another car. I cant be the only person who does this, and if Tesla wants to sell to this market, they will need to have a way for a customer to walk into a store and drive out in a new car. (granted, I am breaking my normal buying tendencies to get a Model S, but most people who buy like I do probably would not do this)�
Apr 20, 2012
dsm363 Even by the time I ordered my Roadster the wait time wasn't even that long so I doubt on a largely automated assembly line that any order would take half a year. I think many people would be willing to wait a month from order to delivery to their front door so don't see it as a problem. There are some people who are impulse shoppers so you might lose those sales but many younger people have grown up with the culture of ordering something online and having to wait for it to arrive in the mail. Granted it's much shorter than a month but if that attitude can be stretched from Amazon.com to buying a car, this sales method may work.
I don't think the younger generation cares as much about going to a dealer, having the sales person say 'let me go talk with my manager and see what we can do' and then seeing their actual car on the lot. If they could simply drive a similar model once, they'd probably be fine with ordering their car online. That's just my guess though.�
Apr 20, 2012
Rifleman I think you hit the nail on the head with this one, I dont think anyone enjoys the car buying experience at most dealers. Ordering a car after taking a test drive of a similar model at a store is something most people would be willing to do. Waiting several months when you need a car to get to work is something that some people are not going to be able to do.�
Apr 20, 2012
Arnold Panz It's one of my favorite criticisms of Tesla -- that the company-owned store model can't/won't work, and you can only sell cars successfully through a dealership model. Buying a car through a dealership is generally a miserable experience! This is a classic "this is the way its always been done" argument, and one that Tesla is very wise to try to change the paradigm so that buying a car isn't such an unpleasant experience. Have a few cars on the lot for those who simply can't wait and don't care about their options/colors, and for everyone else if they can get it within a few weeks they shoul be fine.�
Apr 20, 2012
Robert.Boston Agreed, some of the most successful companies have been those that took a different approach to their sales channels, even if their product wasn't otherwise particularly differentiated. Consider the initial success of Dell Computers, cutting out the middle-man and selling sight-unseen computers. Or Apple -- not only the stores, but iTunes, which put Tower Records and nearly every other specialty music retail outlet out of business. Much of McDonald's success could be laid at the feet of a highly successful franchise model, displacing all the mom-and-pop restaurants. Dell Computers, Apples' .AAC downloads, and McDonald's burgers aren't a better product than their competition (in all cases), but were sold in a better way.
That said, I do agree that to hit strong sales volumes, Tesla will need to have a small inventory of "spec" cars on hand, perhaps a dozen distributed in each sales region. Saturn tried the "build to order" model, which as I recall gradually reverted to inventory-at-the-dealer. By keeping a small inventory of popular specs available, Tesla can deliver cars within a few days to those willing to buy from inventory, or in a few weeks from those who want custom. 12 cars in 5 regional centers would only tie up about $3 million in capital.�
Apr 20, 2012
daniel While you may be right about their profitability, I don't think this is the REASON for staking so much on the Model S. Tesla's goal from the very start was to sell a mass-market EV. The Roadster and the Model S, while important in their own right, are steps to that goal. They are producing the Model S, not because the Roadster alone could not be profitable, but because the Roadster was just a foot in the automotive industry door.
This was me. I'm not sure I would have bought my Roadster if I had had to wait half a year for it. Number 1117 was not produces AS inventory, but it was in inventory due to being an orphan car. The original orderer ended up not buying it, so it went into inventory, where it was waiting when I decided I wanted a Roadster. I went through the computer's list with my salesman, and picked the car that most nearly matched my criteria.
OTOH, if they can get the wait time down to a month, they will probably lose only very few sales to the "I want it now" buyers. Especially at first when there's nothing else like it on the market.
I cannot argue that McD's is not a commercial success. But I sure don't think they sell in a "better" way. They sell in a horrid way that appeals to children, who are easily manipulated by advertising. The corner hamburger stand was IMHO a much better way. (Though it's been over four decades since I ate meat, and the first McD's I ever saw opened in my neighborhood just a few months after I had quit eating meat.)
The Tesla buying experience is certainly much nicer than other car companies. It remains to be seen if it can be scaled up to a national level and hoped-for Bluestar sales numbers.�
Apr 20, 2012
EVNow That is one way to upsell as well. Keep cars that are slightly better equipped than what most people order.�
Apr 20, 2012
AnOutsider Wasn't that the basis of this suit? Mom to Sue McDonalds in Happy Meal Battle - ABC News
On topic, I think we had this discussion elsewhere, but I'm also a big fan of the direct-to-customer setup Tesla is going with -- though I also agree they need to keep SOME inventory.�
Apr 20, 2012
jerry33 +1 Except that I don't think it 's only the younger generation. I purchase almost everything online--include two Prius. In both cases I purchased when Toyota had the online ordering system up and running. This avoided the dealer hassle at sales time. Unfortunately, it didn't avoid the poor service for maintenance.
Not buying or getting service from a dealer is one of the big reasons for "Why Tesla?"�
Apr 20, 2012
SByer Yeah, Toyota is particularly bad at the in-person sales process. I loved my MR2, but will never buy another Toyota, ever, ever, after that experience. I compare that to when I bought the 911 - used. If Tesla hadn't come along, I might have become a lifelong Porsche owner, though now that there's the Cayenne and Panamera and they've pissed away a huge chunk of their brand cach�, probably not.
The franchise sales model is just broken, kills any feedback loop in either direction (building the cars customers want, quality control of the experience). Online is OK for the technologically savvy, but I don't think applies in the vast majority of cases.�
Apr 20, 2012
Larry Chanin Yes, I think we're saying the same now. When I referred to avoiding inventory I didn't mean to suggest that inventory should be zero. I was just stating that Tesla should avoid the inventory practices of conventional dealerships. Robert's suggestions regarding inventory makes sense to me.
Larry�
Apr 22, 2012
tdelta1000 I agree as well.�
Apr 22, 2012
Larry Chanin Hi Arnold,
I ran across this posting today which supports your argument that Tesla needs to continue their store concept in favor of conventional dealerships.
Larry�
Apr 22, 2012
EVNow Even though Tesla dealers won't diss EVs (if they do, they won't have anything else to sell, unlike Nissan or GM dealers), it makes sense to have company owned stores. That is because of very restrictive state laws that dealer lobbies have managed to get into the books of most states.�
Apr 22, 2012
dsm363 Yeah, it's amazing how laws like this can even exist. Even for states the say they embrace 'small government'/'free enterprise' such as Texas, they managed to get laws like this passed. Tesla is trying to find a way around even opening a service center here now as I don't think that's currently legal. What happened to letting the markets work?�
Apr 28, 2012
tdelta1000 +1... it seems that they what 'small government' and 'closed enterprise' to regulate the future of automobiles.
�
Apr 28, 2012
smorgasbord Read and weep:
http://www.motherjones.com/politics/2009/02/why-you-cant-buy-new-car-online�
Apr 29, 2012
GSP Nice summary of our nation's sad, anti-free market situation.
I highly doubt the following quote from the owner of a chain of dealers:
"Right now, he says, dealerships actually pay about $2,500 more for a car from the manufacturer than they sell it for."
Truth has never been a dealer strong point.
GSP�
Apr 29, 2012
sp4rk Hate to be real stupid, (as I am a newbie here I am allowed to be?)
If it is illegal to sell direct, how are our "friends" able to do it?
I'd never even thought or realised that with Tesla you're going direct.�
Apr 29, 2012
VolkerP They have a "BUY" button on their web site, but you initiate a reservation. When sending the reservation fee, you don't buy a car. This seems appropriate to circumvent the "no online sales" restriction.
The act of buying follows, including exchange of contract, signatures, final payment which are escorted with online communication but are done offline/in paper (greenbacks?�
May 16, 2012
tdelta1000 The recent quarterly call revealed that Tesla Motors will move carefully and slowly to that 20K units annually. More information will become available when TM gets its crash ratings, its EPA MPGe ratings and the first several hundred reservation holder Model S' on the road. I'm excited.�
Jun 15, 2012
grisnjam New article here: Tesla Motors prepares to launch its all-electric Model S sedan - San Jose Mercury News
With new info:
�
Jun 15, 2012
Grendal It all sounds like a smart initial start to production. I even liked Elon's statement that giving the cars to himself and Jurvetson gave them two weeks to drive them around looking for "bugs." One a day thereafter is a small ramp up. Internally there should be a pre-set ramp up process that runs all the way to the end of the year with a cushion for possible problems.�
Jun 15, 2012
Doug_G The way I heard it, they'll start at one a day, ramp up slowly, and then open the fire hose once they're ready.�
Jun 15, 2012
smorgasbord In the prior quarterly conference call (not the annual meeting), Elon said that they'd ramp and then plateau, then ramp and then plateau. I think the idea is to use the plateaus for quality checks and to prepare for the next ramp up.
They haven't talked about it, but I suspect that some portions of the assembly line are already 80/day capable while others are still bottlenecks. For instance, stamping panels for 1 car per day is pretty darn quick and can be ramped up without issue, but other things are probably bottlenecks. And then, there are part and sub-assemblies that come from outside suppliers - is Tesla stockpiling those or are they operating JIT? Heck doing 10 cars per hour (80/day=20K/year) might be tough to achieve for the final step of driving the completed car on the test track and then fixing rattles and such.�
Jun 15, 2012
gg_got_a_tesla Is this proof of that?
Tesla Motors prepares for June 22 launch of Tesla S all-electric sedan�
Jun 15, 2012
Doug_G Nah, they could probably stamp 100 of those in an afternoon.�
Jun 15, 2012
action7981 Not until all of the racks in the background are full :wink: It would make sense that they stamp a bunch of the same panels before switching dies. I counted 14 on the rack and two missing so each rack holds 16. I would think that they are only making / stocking enough to just keep ahead of production.�
Jun 15, 2012
Todd Burch I might be stating the obvious, but for those not familiar with manufacturing:
You don't typically start out stockpiling parts and get too far ahead of production with a new product like this. If you find a problem that requires a change to a part (die/mold), you don't want a bunch of existing parts sitting on racks to go to waste.
So typically they'll start out with a small number of parts waiting...and as confidence in the parts and processes improve, more parts will be produced ahead of the production line.�
Jun 18, 2012
ElSupreme Also in manufacturing you make small runs (1 car) and try ramp your production to full line speed (design speed).
You look for problems. Then you make a middle sized run(s) (10-20 cars) and run them at full line speed (design speed). Check for problems again.
Then when you work out the line and any manufacturing problems you run the line a whatever speed gives you the number of cars you want. Not necessarily the line's design speed.�
Jun 18, 2012
Grendal In the initial stages you're going to spend a lot of time in QC confirming the build quality. Later, QC will be less intense.
I wonder if Jurvetson or Elon has found any problems in their two week bug search?
After the first ten get theirs on Friday, I wonder how many will be given out and when to the next customers?
If you're number 11 you'd just miss being in on the hoopla. That would have to stink, don't you think?�
Jun 18, 2012
daniel Yes and no. Bugs are significantly more likely in those first cars. Things Musk and Jurvetson didn't spot. But if you're number 11, you've been waiting a LONG time, and the very end of a long wait can be the hardest, emotionally. Maybe you'd happily accept the slight risk of problems just to get your car a few days sooner. And I expect that problems will be few and minor.
As a non-S-buyer, I'm very anxious to read the first actual user reviews, and then the first professional extended test reviews.�
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