Credit to Author: Maarten Vinkhuyzen| Date: Sun, 15 Mar 2020 00:00:35 +0000
Published on March 14th, 2020 | by Maarten Vinkhuyzen
March 14th, 2020 by Maarten Vinkhuyzen
The created a bit of speculation about Tesla production volume in Q1. As is often the case, some are better at the speculation than others. The best I came across was the . Therefore, I am going to shamelessly use some of his numbers.
The guessing game for production has become a lot more complex lately. I dare say this Q1 is as difficult as last Q1, when Tesla was revamping the production lines for Model S and Model X in Fremont and experiencing logistics hell in Europe and China.
The basic guess is simple and straightforward. Subtract the number from before 01-01-2020 from 1,000,000 plus an estimate for the remainder of the month and you have production in Q1. This quarter has 90 production days, and the 1 million vehicle milestone was reached on day 70. Simply compute 90/70 * (1,000,000 – total before New Year) and voilá, you have your estimate for Q1.
The first problem, though, is people are using sales/delivery numbers in many articles, but only the nerds at places like InsideEVs are using production numbers. And sales/delivery numbers are not even close to production numbers.
At the time when there was a lot of FUD about large parking lots filled with unsold Tesla vehicles, I tried to calculate vehicles produced versus sold. I determined that vehicles sold with a discount because of age and wear and tear (perhaps considered “used” vehicles) did not end up being counted in the number sold, but were counted in the number produced of course.
The second problem is the number of production days. In the past, there was just one production location, heavily monitored by bulls and bears. Now we have a second location where the production of Model 3 is ramping up. That is, when they are not closed for the Chinese New Year holiday or a coronavirus. The Model Y is ramping at Fremont as well, causing uneven daily production at that location.
So, taking all of that into consideration, it is again time for a wild-ass guess. I am going to use 10% as lost production time — that is 63 production days until the milestone and 20 production days after the milestone. Now, using the , the calculation is:
(83/63) * 80,500 = 106,055
That is slightly above the InsideEVs estimate of 103,500.
The problem I have with these predictions is the accuracy they suggest. The CleanTechnica and InsideEVs numbers are within each other’s margin of errors. We have a growing influence of the coronavirus on the supply lines to consider — we don’t know the exact result. At the end of the ramp of Model 3 at Giga Shanghai and Model Y at Fremont, the production gets more efficient, but where are we on the ramp?
With those two uncertainties, pushing the production volume down (coronavirus) and up (greater efficiency), a prediction of 100,000 to 110,000 reflects better what we can expect based on current knowledge.
At the end, I’ll just add a few words about deliveries — those very important moments that make customers happy and are counted as finalized sales in the quarterly reports.
This quarter started not with loading boats for Europe and Asia, but with replenishing the showrooms and test-drive and loaner fleets in the USA. China now gets partially supplied from the new factory in Shanghai. It does not need much from California. South Korea received more ships than in previous quarters, but most ships sailed to Europe.
Because of the depleted stock at the end of Q4 and the late arrival of ships in Europe, January was extremely low and February started to see a more normal level of deliveries only in the last days of the month. Continental Europe is receiving just enough vehicles to deliver the backlog from Q4 and early deciders from Q1. The rest of the customers have to wait for Q2.
Just like last Q4, when the bulk of deliveries went to Amsterdam, this quarter the UK is disrupting an orderly logistics stream. The UK is seeing a stark rise in demand for electric vehicles because of the better incentives this year. (See this CleanTechnica exclusive for more on that topic.)
The UK also has a quirky license plate numbering scheme. The first two letters are a code for the six-month period of first registration of a car. The first month of such a period sees something between a third to half of the cars for that period registered. In the last month, hardly any cars are registered. March is the first month of the new period, the month with the highest sales numbers of the year — even if a large fleet of Tesla vehicles is not reaching its shores. The disappointing (to some USA “analysts”) deliveries in February are traditionally the lowest of the year.
Based on the loading time of the ships in San Francisco, there will be slightly fewer European deliveries in Q1 than in Q4. The pacific rim is also seeing fewer vehicles coming from California. That implies that a larger number of the record or near-record production is for the USA — likely some Model Y to supplement the Model 3 deliveries.
And China? I expect to read about that in the comments. It is anybody’s guess. Demand is fine, but production, the economy, and health scares are unpredictable factors.
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Maarten Vinkhuyzen Grumpy old man. The best thing I did with my life was raising two kids. Only finished primary education, but when you don’t go to school, you have lots of time to read. I switched from accounting to software development and ended my career as system integrator and architect. My 2007 boss got two electric Lotus Elise cars to show policymakers the future direction of energy and transportation. And I have been looking to replace my diesel cars with electric vehicles ever since. And putting my money where my mouth is, I have bought Tesla shares. Intend to keep them until I can trade them for a Tesla car.