Tesla claims net reservations for their Model S stood at over 15,000 units on December 31, 2012. George Blankenship (VP Sales) stated that 25% of the reservations were from outside North America. This implies 11,250 reservations remain in North America. If Tesla can produce 4,500 cars in the first quarter, the average waiting time is 2.5 quarters or 7.5 months if all those in line actually buy a car they reserved. Musk stated the “average wait time now for a car is about five months.” This means one third of those who have reservations drop out when it is actually time to pay up and receive the car. I have no clue how long the folks outside North America will wait for their car.
Musk also stated that the wait time for very high end reservations is between six and eight weeks. This means that Tesla is giving manufacturing preference to the folks who have reserved a higher price vehicle over those who have reserved the base version “Peoples’ electric car. Note the DOE really intended the $450 million loan to Tesla for the purpose of the Peoples’ electric car and not support the over-sized egos of the 0.1% that are “very high-end”.
Musk also stated the following in breaking down what capacity battery packs are being ordered:
“more people are ordering the larger battery pack than we thought. It seems to be that like, items like listen 10% of people are ordering the 40-kilowatt-hour pack. That’s interesting. I’m not saying that can change in the future but that’s what we’re seeing right now. So maybe 10% or less.
A majority of people are ordering the big battery pack actually which is -- and I wouldn’t count on that in the long term. But a majority of people are actually, one-third percent are ordering the 85-kilowatt-hour pack which is a positive surprise. And hopefully, that continues, I mean, that’s the best experience somebody can have with the car. So hopefully that keeps going into the future.”
OK the $50,000 peoples’ car with the 40 kwh battery is being ordered by approximately 1,125 North Americans (10% of 11,250). One third of these folks will not actually go through with the final purchase, leaving only 754, the first of whom will only start to receive their cars in the late summer when the 40 kwh model first becomes available. Perhaps Tesla will produce and deliver all of the 754 Peoples’ Model Ss by the end of the year. Again Dr. Chu’s genius is at work. $450 million in DOE loans to get 754 Peoples’ Model Ss to we the people in 2013 if all goes well and according to Elon Musk’s business plan.
Perhaps Tesla will raise a ton of equity and perhaps they will have a profitable year (2013) but delivering only 754 Peoples’ cars in 2013 to the people (the 99.9%) who are represented by Dr. Chu and the DOE is disgraceful.
What will be worse is if Tesla does not raise a ton of equity and or Tesla does not have a profitable year. Then the $450 million will evaporate just as the DOE loans to Ener 1, A 123, and Solyndra evaporated. Dr. Chu is the real culprit, Elon Musk is just an opportunist.
Of course not one of the ten Wall Street analysts on the earnings call cared to challenge Mr. Musk with this line of questioning.