- Bloomberg cuts its estimator forecast by about 200 units/week.
- InsideEvs estimates little progress for the Model 3 in February.
- Meanwhile, Model S/X sales estimates continue to struggle.
With two months in the books for 2018, we may be approaching the most important month of this year for Tesla (NASDAQ:TSLA). With multiple delays in the company's production forecast for the Model 3, this may be the last chance for management to prove itself to investors and consumers. Unfortunately, many third party Tesla tracking sites continue to show a situation that is less than ideal for both the Model 3 and the S/X.
During February, Bloomberg started a Model 3 tracker to estimate the current Model 3 production rate. Their estimate is based on a couple of items, such as VINs that Tesla has registered along with VINs seen in the wild or reported directly to Bloomberg. The highest production rate I've seen for this estimate was just over 1,050 units per week. Unfortunately, as you can see in the graphic below, there have been a number of cuts in recent days, with the current estimate being just 857 units per week.
(Source: Bloomberg Model 3 tracker)
If this estimate is anywhere close to being correct, it would seem almost impossible that Tesla gets to its current forecast of 2,500 units per week by the end of Q1. In fact, since the company stated that it produced almost 800 units in the last 7 working days of 2017, and some of its lines were extrapolating to over 1,000 units per week, this would be almost no progress in two months.
For those not believing the Bloomberg tracker, InsideEvs is one of the sites that most bulls and bears agree does a good job of estimating Tesla's US figures. The site's February scorecard is out, and it shows just 2,485 Model 3 deliveries for the month, an increase of just over 600 units. This would seem to confirm the Bloomberg data that Model 3 production is well behind schedule and unlikely to hit current targets.
Unfortunately, the situation with Tesla's luxury models, the S and X, doesn't appear to be much better. The bull camp wants you to believe demand is soaring, but registration and sales estimates don't show that reality. Management is limiting production to 100,000 units this year, which it says is a result of limited battery cells, but if the demand was really there, Tesla would be producing more.
Remember, management had guided to over 2,400 units of production per week in Q4 2016, and it has never gotten there. With February estimates starting to come in, the table below shows how things are not looking good as compared to the record sales period of Q4 2017.
Unfortunately, the situation gets even tougher in March for Norway, one of Tesla's most important markets. According to Teslastats, that country had almost 2,500 registrations in December, a mark the company will have a very tough time hitting this month. The first day of the month has just 3 registrations so far, compared to 95 from the first day of December. Throw in another big down month from the US, and Tesla will have a very hard time meeting last year's Q1 sales of 25,000 plus. Things are trending towards the first year-over-year decline for the S and X.
Worse yet, Tesla continues to reportedly plunge into older model year vehicles for its sales. Of the 305 registrations documented by Teslastats so far in Q1, 19 of them were previous model years, mostly 2016 or earlier. That compares to 14 in all of 2017, and 6 of those were in December. So after selling just 8 prior year or earlier vehicles in the first 11 months of 2017, Tesla has sold 25 of these in the three plus months since. That cannot be good for margins.
In the end, another weak quarter for the Model 3 could be the breaking point for consumers and Tesla investors. The Chevy (GM) Bolt just showed a 50% rise in February sales over last year, the new Nissan (OTCPK:NSANY) Leaf set a record in Norway, while Jaguar's (TTM) I-Pace will launch this afternoon and more competition is coming.
With sales of Tesla's higher end models also struggling, huge losses and cash burn could only make the debt situation worse. That's especially true as interest rates continue to soar, like LIBOR rates where the 3-month just topped 2.00% and the 12-month is now above 2.50%. After recently peaking just under $360, Tesla shares have come down more than $20 as seen below. Perhaps investors are worrying about the Model 3.
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