Summary
- Tesla states it has inventory apart from loaners and demo cars.
- Elon Musk says scalpers led Tesla to build too many China-bound cars, which are now in inventory.
- However, this statement DOES square with what spokesman Sproule said six months ago.
Elon Musk has gone on record saying Tesla (TSLA) has inventory in China. On the one hand, you may not be surprised, given the company has $380 million of finished goods inventory and more than 5,000 Model S's have been built but not delivered. Tesla says it only builds to order and is production constrained. This is easy to square with an extra two thousand cars in a single country.
And who's to blame for this production/demand mismatch in the Middle Kingdom? Scalpers, apparently. Musk says they ordered lots of cars before the Model S launch, then failed to actually buy them when the cars arrived. But, of course, this is an exceptional situation: the company does not have inventory outside China and wouldn't have inventory if it weren't for the scalpers.
China is the only place on Earth that we have excess inventory. We are essentially selling cars that speculators ordered but we [were] not able to take delivery on.
What is also exceptional is this story does not contradict what Simon Sproule, the then Tesla spokesman, said six months ago:
"There have been some scalpers -- people have tried to buy up large consignments of vehicles," Sproule says. "But that's not been a significant factor in China."
Tesla launched in China in April 2014, so by the time Sproule made this statement to the LA Times (September), it should have been clear where there was or not a scalper problem in the country. So Sproule was accurate back then, and Musk is accurate now.
Very simple. This all happened 6 month ago. As time goes by, leaves change color, days get shorter and scalpers cancel orders.