Oct 4, 2018 7:39:05 PM
- CGX car nut
- Rennteam Master
- Loc: NWI , United States
- Posts: 5165, Gallery
- Registered on: Aug 17, 2011
- Reply to: Whoopsy
Re: Tesla Roadster
Whoopsy:CGX car nut:Enmanuel:Leawood911:I see Tesla’s all over the place. A 3 parks right next to me at work. Everyone wants one especially people who are not ‘car people’ . The wait which has been public knowledge for the lower models has simply kept more from making deposits. They will sell as many as they can build. No doubt. And a good problem to have. I leave it up to Elon’s AI teams to figure out how to solve production and delivery problems. Whatever. It’s the sales baby! They are way ahead.
Same here, they are everywhere in Vegas. I gotta admit, in some colors it looks rather good.
I’ve seen a number of Model 3s on the road lately too. I was sent a Daily Mail article earlier today suggesting that there are inventory issues with cars sitting in fields across the Country. Since media is apt to get facts wrong, especially relating to business, it is difficult to comment much on finished inventory sitting in fields. Tesla originally was to use a build-to-order model, hence the deposits taken for the Model 3, but has since moved away from that business model to optimize production volume to meet profitability criteria on that side of the equation. One inherent problem is pulling demand forward and away from future demand. This is exactly why the other automakers are holding EV production levels low, there aren’t any reliable demand models available.
You can just walked into ay Tesla 'dealer', ask about buying a non-base Model 3 and you will have plenty to choose from their lot. Tesla is cranking out full spec Model 3 which aren't selling like hot cakes.
They can still claim they have a huge backlog of orders for the Model 3 but those are all base models which Tesla cannot build without taking a huge loss. Not that they are taking any profit from selling the high spec one, just less loss per car.
Right now Tesla is in survival mode, trying to prop up the stock price for the next 6 months in order to survive the bond payments crunch.
Are you familiar with the Chrysler sales bank and the problems it caused the company starting in the 1960s? Chrysler executives, instead of behaving rational tried to rationalize steady state production regardless of demand, leading to fields of cars accounted for as sold but not part of the official sales channels. The concept was that cyclical demand would eventually empty the sales bank as demand outstripped production. In reality, the sales forecasts, which was used to construct the production forecasts, were wildly optimistic. Lee Iacocca banished the sales bank when he became CEO only to have it return during the waning days of the DaimlerChrysler debacle.
Elon, if he really wants to emulate Henry Ford, needs to focus on what Ford did to improve productivity and profitability. Ford inherently understood the value of negative working capital and how to achieve it through reductions in work-in-process inventory as well as controlling finished goods inventory. The Big 3 typically utilizes a heuristic for controlling finished goods inventory using the 90 day supply number as a measure of meeting demand with those vehicles in the logistics and sales channels. It's rough but relatively effective.
The Big 3, as well as other automakers, have a distinct advantage over Tesla in clearing inventory gluts by pressuring their dealer networks to sell slow moving inventory in exchange for getting a greater supply of more popular models. Tesla, having one volume model, is stuck as consumer demand for sedans is decreasing when compared with sales of crossover style vehicles.