Tesla Motors is notoriously cagy about its sales numbers, though the company and CEO Elon Musk are always happy to hype up demand and wait times. That’s why a Merrill Lynch researcher’s letter to investors, estimating that Tesla may be sitting on a backlog of 3000 unsold cars, comes as such a surprise to folks who’ve been hearing nothing but good news from Musk and his car company. Is there trouble in electric-car paradise?
It’s hard to find a rock-hard fact among all this speculation. As originally reported at the Daily Kanban, Merrill Lynch research analyst John Lovallo dug through Tesla’s finished-goods inventory, concluding that the company’s numbers at the end of Q3 didn’t jibe with Tesla’s assertion that it “sold every car” in that quarter. Lovallo bolsters his own research with speculation based on the electric carmaker’s actions, like the attractive new lease offers, a three-month “happiness guarantee,” and the narrowing of the Model S lineup to two models and six colors, down from three models and eight paint choices. Coupled with yet another delay in the rollout of Tesla’s Model X SUV and rumors of increased Tesla sticker prices in Europe, the outlook isn’t all rosy for Musk’s car company.
All of this, Lovallo concludes, indicates that demand for new Teslas is down, not up, and he guesses that the company could have “approximately 3000 vehicles stocked in inventory or in transit.” For a company that reports 7785 vehicles sold in Q3 of 2014, that’s a huge backlog.
Of course, it’s nearly impossible to verify Lovallo’s claims: Tesla doesn’t report regional sales numbers in its quarterly financial statements the way that nearly every other car manufacturer does, and while the Daily Kanban seems to have read Lovallo’s report firsthand, the document itself is available only to Merrill Lynch investors. We’re left taking both the skeptical analyst’s educated guesses and the optimistic billionaire’s sunny assertions at face value.
Launching a brand-new car company isn’t easy, especially one that strives to be different from industry norms in pretty much every way possible. But between speculation of sagging sales demand, statewide sales bans purchased by old-world dealership cartels, and continual delays to the Model X’s launch date, perhaps things aren’t going so smoothly for Musk and company.
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It’s hard to find a rock-hard fact among all this speculation. As originally reported at the Daily Kanban, Merrill Lynch research analyst John Lovallo dug through Tesla’s finished-goods inventory, concluding that the company’s numbers at the end of Q3 didn’t jibe with Tesla’s assertion that it “sold every car” in that quarter. Lovallo bolsters his own research with speculation based on the electric carmaker’s actions, like the attractive new lease offers, a three-month “happiness guarantee,” and the narrowing of the Model S lineup to two models and six colors, down from three models and eight paint choices. Coupled with yet another delay in the rollout of Tesla’s Model X SUV and rumors of increased Tesla sticker prices in Europe, the outlook isn’t all rosy for Musk’s car company.
All of this, Lovallo concludes, indicates that demand for new Teslas is down, not up, and he guesses that the company could have “approximately 3000 vehicles stocked in inventory or in transit.” For a company that reports 7785 vehicles sold in Q3 of 2014, that’s a huge backlog.
Of course, it’s nearly impossible to verify Lovallo’s claims: Tesla doesn’t report regional sales numbers in its quarterly financial statements the way that nearly every other car manufacturer does, and while the Daily Kanban seems to have read Lovallo’s report firsthand, the document itself is available only to Merrill Lynch investors. We’re left taking both the skeptical analyst’s educated guesses and the optimistic billionaire’s sunny assertions at face value.
Launching a brand-new car company isn’t easy, especially one that strives to be different from industry norms in pretty much every way possible. But between speculation of sagging sales demand, statewide sales bans purchased by old-world dealership cartels, and continual delays to the Model X’s launch date, perhaps things aren’t going so smoothly for Musk and company.
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