Tesla’s New Vehicle Inventory Skyrockets
Tesla, Inc. (TSLA) does not easily track all moving parts of this company. Investors and analysts are not asking enough for polling and demand responses.
To be fair, our community of analysts, it was a matter of asking Elon Musk that he simply refused to respond “… do not point out this problem …” (Model 3 reservations for example). Sometimes musk considered the information requested “non-materials” or sometimes described the figures as “mouse nuts”.
The fact is that, contrary to what Tesla wants us to create and so far has not revealed, the company has a huge and growing number of new unsold vehicles. Tesla does not “limit production” for months.
The history of the battery shortfalls resulting in production delays (a title in the Tesla Q2 posted first published on July 3) does not make much sense to me. I put the pieces together for some time.
I have found some of the parts of my recent articles on the growing stocks of new cars that block the delivery center parking lots and new cars, once again, they are going to upgrade. You can read these stories related to the inventory here and here, if not answered before.
This article discusses an even more important inventory concern.
My number of crisp shows that, at present, Tesla would have faced production when sales and orders for new units declined and inventories of new units increased.
Ford (F) and General Motors (GM) (see articles here and here) and other manufacturers systematically do so to maintain a balance between production and inventory. Remember that so far, Tesla has always claimed to be driven by demand, which means that cars are sold as fast as they could build them because of order backlog.
I think it was true until the end of the third quarter of 2016. But now I can show that this was not the case for at least six months, and reading it was confirmed by at least one Wall Street analyst.
According to my figures, it was now documented that Tesla’s inventory of finished units, but not sold, has increased by more than 3,900 units by three quarters between the third quarter of 2016 and the first quarter of 2017.
In the second quarter of 2017, this number doubled to more than 8,800 units. At an average selling price of about $ 100,000 per unit, this translates into more than 880 million new accrued inventories. The press release issued Friday, July 7, Tesla requesting transport units of 3,500 people at the end of the second quarter was the last piece that had to complete this puzzle.