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What to do when annual global reservations for Model S / Model X / Model E are much higher than expected?

What to do when annual global reservations for Model S / Model X / Model E are much higher than expected?

The demand for Tesla EV's result in actual reservations and deposits.

And the production capacity results in actual deliveries of Tesla EV's.

A situation in which it appears that the pace in which the reservations/deposits keep coming in rises dramatically (which would be nice actually) to a much higher level than that Tesla Motors is capable of producing it's EV's, could cause some problems for Tesla Motors.

Just to keep it simple, just imagine that the number of new reservations for the Tesla Model S (made in 2014) surprisingly appears to be 60,000!!!

No way that Tesla Motors is currently capable of producing that many Tesla Model Ses in 2014.

And suppose that in every subsequent year the demand appears to be surprisingly much higher than was estimated at the beginning of each year.

For example:

2014
S = 60,000
X = 40,000
E = -

2015
S = 80,000
X = 60,000
E = 100,000

2016
S = 120,000
X = 100,000
E = 200,000

2017
S = 140,000
X = 140,000
E = 400,000

2018
S = 160,000
X = 160,000
E = 800,000

2019
S = 200,000
X = 200,000
E = 1,600,000

What should Tesla Motors do in such a situation (in your opinion)?

Great question for Case Study at Harvard/Stanford/Northwestern/Virginia/Kellogg Business Schools!

Buy more and faster robots!

I agree with Brian H.

Frustrating as this might be for some reservation holders, outstanding demand for Tesla vehicles will no doubt be good for the stock price and Tesla as a company.

What should Tesla do in such a situation?
First step would be to look at their bottlenecks.

Inject some cash and build capability at each bottleneck. More robots, extra factories.
Most importantly, design a gigafactory for MORE BATTERIES :). Or announce that the gigafactory will be 50% larger than previously announced.

If batteries are their bottleneck and they can't even meet half the demand for a few years, there'd be some pressure to sell double the cars by halving the battery size, and that has all sorts of connotations. Even though most people drive less than 120miles daily, they would need to have superchargers on city routes for drivers to be comfortable that they're there if needed. Swaps for bigger batteries for trips. Other supporting options - perhaps a built in 10kWh single use battery for emergencies? Tough choices in this situation.

Buy stock or make deposits early on and sell your spot in line.


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