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Your expected annual global reservations for Model S/X/E during the current decade?

My expected annual global reservations for Model S/X/E during the current decade are:

2014
S = 40.000
X = 20.000
E = -

2015
S = 60.000
X = 60.000
E = 50.000

2016
S = 80.000
X = 80.000
E = 100.000

2017
S = 100.000
X = 100.000
E = 200.000

2018
S = 120.000
X = 120.000
E = 400.000

2019
S = 140.000
X = 140.000
E = 1.000.000

Reservations are a direct result of demand.

What are your expected annual global reservations for Model S/X/E during the current decade?

Do you think TMC will be taking reservations for the E? I could see them changing their ordering model on a car for the masses. Tying up crash in a reservation might not fly with budget-minded individuals .

Why wouldn't they take reservations for the E. Just because the deposit rate may be lower doesn't make it a bad business model.

I say 3,000,001 reservations by 2020. Let me sell all my TSLA before another prove it otherwise.

What amount in US dollars will be required as a deposit for a reservation of a Tesla Model E by a US citizen?

I think that the required amount for a reservation of a Signature Tesla Model E by a US citizen will be $10,000 (for the first 1,000 Tesla Model E built vehicles).

And I think that the required amount for a reservation of a regular production Tesla Model E by a US citizen will be $2,000.

Do these two amounts sound acceptable to you?

@Benz
My gut says that $2K is too much to put out there for the average person who's waiting for an affordable car--especially 2-3 years ahead of time when timetables can slip. Many people have trouble coming up with a down payment, let alone an interest-free loan. That said, a smaller amount, say $500, might be enough of a disincentive to cancel for folks living paycheck-to-paycheck.

@Bighorn

People who can afford to buy a new car of at least $35,000 can also afford to pay a deposit of $2,000 in my opinion.

@Benz

"People who can afford to buy a new car of at least $35,000 can also afford to pay a deposit of $2,000 in my opinion."

I agree with your statement, but many people who acquire a new car can't afford it outright. They are putting down 5-10% and are financing it for 5-6-7 years to achieve a manageable monthly payment. A down payment will often come from the proceeds of a trade-in. Someone wanting to reserve a car far in advance doesn't have the luxury of a trade-in to come up with earnest money. Tesla has tried to be exceptional compared to business-as-usual car dealers--people who've never put down money to reserve a car may balk at the concept. This is a different demographic than the early adopters who have discretionary income and are ideologic about the EV revolution.

Production output limitations may jibe well with the number of customers able to afford a reservation fee in the first couple years, so it may be a moot point. And when production is ramped up to 500,000 cars/year, turnaround should be such that a reservation fee is essentially a down payment.

Interesting to ponder.

Currently every deposit is already a down payment, right?

@Benz
True, but I was referring temporally i.e. when deliveries take two weeks, there won't be the long term loan to Tesla.

@ Benz - It is applied as payment but it is on the books as a liability for Tesla until the car is titled to the new owner.

I don't want to rain in the parade here, but the vast majority of cars sold in the U.S. are financed (85%), and many are no-money-down deals. That's a sad but true commentary on the American consumer mentality, which is largely based on monthly payments and living paycheck to paycheck.

The biggest hurdle to EV penetration is the requirement to live a stable, organized life. People who move every year or two, or who have messy, transient lives, more than half of the population, are not good candidates for the EV life. 8.6% of all US residential mortgages are currently in default, slightly down from peak levels, but evidence that a lot of people still can't get it together financially. Way more used cars are sold every year than new, for a reason. The average age of cars on US roads right now is 11.4 years. We replace less than 10% of cars annually. Think about that when you project sales. Put another way, last year was a big year for auto sales, at 16 million units. The average is more like 14 million units. Those of you projecting 3 million units are smoking something pretty strong in that light.

Setting up our lives to charge an EV requires organization before and during the purchase, and in daily life with the car. It says a lot about us that so many cars are going down the road with snow piled on top, under inflated tires, trash piled in the back seat, and two years of grime on the outside. Many people just don't ever get it together. Most new car sales are also impulse decisions, with less than half of new car purchase being planned in advance. That doesn't work in EV-ville.

http://research.stlouisfed.org/fred2/series/DRSFRMACBS

The target for the Gen III is middle class families. I think of my own kids, who are doing well, have no debt, but in their late 20's, could not possibly live with the limitations and requirements of an electric car. One lives in an apartment without a garage, and is a civil engineer driving to job sites, so must have a truck. Another lives in a highrise where no charging is possible, and since she plans to move in two years, it makes no sense to go through the hassle and pay for a charging installation even if it could be approved. The third is a Navy pilot and moves constantly from officer housing to officer housing location. All make enough to afford a Gen III Tesla, but are much better served at this stage of their lives driving two Priuses and a Jetta diesel. Right tool for the right job. They, and their families, all love our Model S, but none could live with it. They are representative of the next generation's electric vehicle target audience. I think it will be more of a tough sell than the luxury market targeted by the S and X. I do think the Gen III will do bigger numbers than the S and X, but we should be realistic about the target audience.

@ Bighorn / Koz / Mathew98 / Captain_Zap / Pungoteague_Dave

Thank you all for your posting. But could you please also express your expectations in numbers like I did in my first post in this thread?

Why? Pure, rampant speculation based on nothing except wild-ass guesses.

Okay, 400,00 units per year in 2020 based on max capacity of the NUMMI plant under GM/Toyota. Yeah, they could build, etc., but a big part of the margin comes from having almost free equipment, stamping presses, paint systems, etc. Buying new for a second plant would cost billions and take years. Not that it can't be done (see the new car plants across the union-free U.S. south), but much of the low hanging fruit is picked.

@Benz - The current factory used to support 500K units per year under Totoya/GM. It's very unlikely Tesla can reach this number with the combo of S/X/E production lines by 2020.

The factory can't physically sustain 100% production increase for Gen3 every year for 5 years (2015 - 2019) from 50K to 1 million units.

I would taper the expectation of the Gen3 to ramp up to 200K by 2019. The best selling sedan in 2013 was the Camry with 408K worldwide sales for the year.

It's difficult to anticipate Gen3 to outsell Camry and Accord combined (800K) when it is barely off the drawing board.

There are a few wild cards in this deck (cards that out-rank all others if played). One is the presumptive driving-experience superiority of the Model E compared to all others in its bracket or nearby brackets (both higher and lower cost). The other is the maturation of charging networks (L2 and L3).

The first produces motivation to overcome all obstacles to ownership. Many here have experienced that first-hand.

The second erodes or demolishes the inconvenience and fear-of-stranding most potential buyers shun now.

So if those cards exist and are played, TM triumphs. If not, it's a struggle. I think the former is more likely.

Brian - As PD mentioned, there needs to be additional plants in place to produce any more than 500K total units.

Even if Gen3 takes the world by storm, TM will need some major capital investment to get that second or third factory going to meet additional demands. It'll take lots of capital and perhaps a few more years.

It's not a downside, it's a necessary cost of doing business. It is a great problem to worry about.

So Mr. Benz, we now have a definitive answer - the gigafactory announcement projects 500,000 maximum unit production in 2020. My 400,000 estimate stands for 2010, and your 1.3 million projection for 2019 is wildly optimistic.

Production growth is limited in the same manner the law of gravity increases elevation risk. Go too high too fast and the chances of a deadly bounce increase exponentially. Tesla needs to maintain quality more than they need volume. It is always possible to sell more cars but it is impossible to recover a damaged reputation.

One of my early mentors often said the following: "We have three product options - (1) high quality, (2) delivery speed, and (3) low price. Pick any two." This lesson has served me well and is incontrovertible for either products or services. It is impossible to have all three.

I assume you mean 2020, not 2010!

Hindsight is 2020

No, 2020 is 6 years from now, so it's foresight. ;p

Forking over thousands to Tesla months or years in advance and providing them an interest free loan is not a good choice. I understand the first in line thing, but many normal (and even abnormal) folks won't want to bother handing over a wad for their Honda Accord replacement. Also wondering if the Model E demographic will be slower to adopt and a harder sell to electro cars? Soccer moms want their gas.

Yes, sorry, meant 400k in 2020 but 500k would not be surprising. 1 million? Not without an external event.


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