Model S/X deliveries drop off cliff, down 56%

[whitex]

Should we list all of the Model 3 advantages like faster supercharging? More energy efficient. Costs less to charge up. Lately gets firmware updates sooner.

Both MS and M3 have advantages and disadvantages, of course depending from whose point of view. Some like instrument cluster, some prefer a single tablet interface. Some like aluminium body, some don't care. Some like 2170 batteries, some don't care. Some like more room, some like a smaller car. They are two different cars, at two different price points. The customers for both used to only have Model S as an option, then S and X, now S,X and 3, so they demand is spreading among the options (and of course growing, as the cost of entry decreases). Once competitors like VW come with their options, some of the Tesla crowd will switch to VW/Audi/Porsche customers. EV's are becoming a competitive market - it's easy to be number one in a one horse race, let's see where Tesla is in 4 years.

 

[Mike Robinson]

I think the sharp drop in sales should have been expected. Many sales in the fourth quarter were “urgency” sales due to $7500 tax credit being cut in half an Jan 1st. Tesla made an incredible push to deliver as many cars as possible before end of year.

I bought a MS in December. I could have purchased a M3, but it’s just too small for me and I really prefer having a screen directly in front of me. My friend bought a M3 same time I bought the MS. That size works for him, but not me. I drove a Prius for 7 years and I was happy to get into a larger car again.

I have few complaints about my MS. I’ve put 7,000 miles on it in 3 months and it’s a joy to drive! I don’t t regret my decision at all.

 

[sillydriver]

I agree many S buyers would have bought a 3 if available (not me though) so that weighs down demand, but doesn't really explain the sharpness of the sequential fall in Q1. I agree there is no reason to upgrade to a new S. Mine just turned four and there are multiple features (the old nose, leather, yacht floor, alcantara, 80 amp dual charging, strong HID headlights) that I like better than what's available in new S. A new interior and exterior refresh could change that. With S sales falling sharply I think it's rational for potential buyers to believe either 1) a significant refresh is around the corner or 2) the S will be end-of-lifed and become an orphan product. In neither case would it be rational to buy right now, so the sales decline is self-perpetuating until a refresh. However I don't agree that the S design or form-factor is obsolete. The S has more passenger space and holds more groceries than my wife's full-sized Range Rover, yet it has a beautiful sleek design, which just needs an interior, exterior and perhaps a mechanical refresh. And to the extent it differentiates it from the 3 (more real controls) all the better,

 

[_jal_]

S needs a redesigned back end. Interiors need some door pockets.

For a car at a luxury price, there are a lot of things weird about the interior, and door pockets are definitely one. Cup holders, lighting, and even materials are pretty cheap. And now you can’t even get a sunroof. I had a XTS (?) rental the other day and it was typical GM ugly, but it did have a lot of touches people expect in a luxury car. It even had Apple CarPlay which my Outback also has.

I love my MS but the design is definitely getting a little long in the tooth.

 

[wdolson]

I get that some purchased an S because they couldn't get a 3 at the time but if you remove that segment of the owner group, for the those who purchased an S for the looks and load capacity the 3 isn't a viable alternative.

Similarly, if you start taking design elements from the 3 into the S, you remove what a lot of people like about the S and dislike in the 3.

There is no perfect solution here, but there is nothing wrong with the S reducing in over-all numbers as the 3 ramps up and you'll see something similar when the Y arrives as we;;, both for the S and the 3 as there will be people right now taking a 3 because they can't get a Y yet and can't afford an S...

As for the price difference, check out the Audi A7 vs A3 for example... There is room for the S to command a significant price increase over the 3, just don't make it look like a larger 3/Y

Actually sales of the A7 make the case for lower Model S sales. I believe total sales of the A7 have been less than the Model S the last few years and Audi's total sales are close to 2 million cars a year. The A7 is a niche halo car with a tiny fraction of total sales.

Tesla is at a point where they need to maximize the productivity of the factory space they have. If sales of the Model 3 remain strong and the Model S drops too low, they may suspend making it, or combine the Model S and X production lines and convert one of the S/X lines to making Model 3s or Ys. At least until they have more factory space for more limited demand cars.

Some people will grumble about no more Model Ss, but ultimately it's about what's best for the company. To spitball some numbers (the real numbers are probably wildly different) if each production line making Model 3s makes $10K an hour on average and the Model S line is only making $2K an hour average, it makes economic sense to convert the S line to Model 3s.

If they are planning an all new Model S down in a few years, they can tap the pent up demand with the new car. The new Roadster caused quite a buzz when they introduced the second gen. One of the reasons the Model S is looking tired now is it's a design introduced in 2012 by a company trying to figure out how to make cars. They learned a lot between the Model S and 3 and the technology has advanced too, so the Model S is a more expensive, but much older design car. When they introduce the next gen Model S it will be more advanced than the 3 is now, so it will earn its crown as the premiere car in the line-up.

 

[dbldwn02]

This happens every year. I'm not surprised. Big end of year push, coupled with a halving of the tax credit creates a rush to buy in Nov/Dec. A lot of people don't like waiting a year to get their $7500 back so they buy in Dec.

 

[dbldwn02]

Tesla is at a point where they need to maximize the productivity of the factory space they have. If sales of the Model 3 remain strong and the Model S drops too low, they may suspend making it, or combine the Model S and X production lines and convert one of the S/X lines to making Model 3s or Ys. At least until they have more factory space for more limited demand cars.

S and X are actually made on the same production line. I did a factory tour last year. It was very cool. But they can definitely shrink down parts of it if production slows. Paint is their biggest bottleneck.

 

[bob_p]

The drop is likely due to a combination of factors:

• Q4 was the end of the $7500 US tax credit, so Tesla pulled out all stops to deliver every possible vehicle by year end to US customers. There would likely result in some rebound during Q1 as Tesla went back to their normal distribution, including sending vehicles outside of the US - and introducing 3 into more markets outside of the US (which have longer delivery times)
• It was inevitable S/X would see a drop of volume once there was a high volume, lower priced, long range EV option. Many S/X customers would have strongly considered 3/Y, if those had been available at the time. S/X still have a market - they are larger vehicles, with some advantages over the lower priced and smaller Tesla models.

Q2 will likely be a rebound quarter, with Tesla again pushing to deliver more US vehicles before the US tax credit drops again on July 1. Q3/Q4 could repeat this cycle one more time until Tesla loses the US tax credit completely.

This quarterly oscillation is a reason why Musk wanted to take the company private and stop doing quarterly reporting, because there will always be quarter-to-quarter fluctuations which get averaged out over time. The other manufacturers see sales fluctuations over the year, with their annual model year - no one should be surprised to see Tesla also see delivery fluctuations - following a different pattern because Tesla doesn't have an annual model year, and international sales are supported by only a single factory (today).

 

[luvacoustic]

When I bought a MS, I expected the M3 would have a similar drive/feel just on a shorter wheelbase. Kind of like how a 3-series and 5/7 series have similar driving characteristics due to their DNA and it's not as stark as a Civic vs a 5 series. I didn't expect that the M3 would run off of basically the same software, similar user interface, and have a similar/better interior than the MS. If the interior feels the same and the drive feels the same, then the difference comes down to exterior design and interior capacity. Whenever they refresh the S/X, they need to be more advanced in the UI/interior in their flagship models to be worth the upgrade $.

 

[boonedocks]

If I didn't have tweenagers soon to be teenagers with legs as long as gazelles I would already be in a Model 3 and dump the S. Having pre-paid for every option on my Early 2017 Model S and seeing it losing feature after feature of new software enhancements and seeing the S & X seem like they are just getting the proverbial "leftovers" from the Model 3 updates I am truly saddened at how Tesla has treated us.

Offering a "bone" of entry in to the Early Access Program and early HW3.0 upgrades is just more "words" from Elon/Tesla. It is hard to not go dark on Elon/Tesla but the expectations that THEY set not me have just been dust in the wind and blown away. I sure hope they get their act together soon......

 

[zambono]

Tesla deliveries fall—especially for high-end Model S and X

The S/X is dead and can’t be refreshed soon enough. Even the massive price decreases don’t seem to be enticing new buyers. Now what? We all sorta saw this coming but less than half the deliveries of the prior quarter is way worse than I was expecting.

I just wrote a thread about this, model S in its current form is a $60k vehicle. If Tesla had regular dealers, they would consider the model S a late model and reduce its price substantially to move it from the lot.

 

[zambono]

We need a 350+ mile range S/X and a 450+ mile range S/X.

S needs a redesigned back end. Interiors need some door pockets.

And it still needs to be 15% cheaper.

At least 400 miles on smallest battery for S and X

 

[ucmndd]

For those saying this was expected due to the delivery surge at the end of last year, Tesla delivered just over 25k Model S/X in Q4, basically the same rate they have been for nearly 2 years now. There was no S/X delivery surge.

The last time S/X sales were in the 12k range for a quarter, there was no Model X yet.

 

[ramonneke]

Should we list all of the Model 3 advantages like faster supercharging? More energy efficient. Costs less to charge up. Lately gets firmware updates sooner.

Wow... stating the obvious. It is a bigger car and that is as expected! Its like stating the Model 3 is so amazing because it is smaller and only fits short people on the backseat making sure only a leprecon is sitting in the driver seat is a real plus.

The only real plus is faster charging and that is just minor as who cares. Daily commutes can easily be done for 99.99% of Tesla owners without the need of a SuC.

 

[RDoc]

IMHO buying a current S/X models is much less compelling than just keeping our current S. We have (and use) the sunroof, free supercharging and AP1 which is at least as good as the current EAP (or whatever they're selling today). Why should we trade in our great car for an inferior one for a lot of money? We can't be the only ones feeling this way either.

 

[Ludalicious]

Not too appealing when customers loose upto 60k in a year on their vehicle. Especially on the high end models. Will question my purchase next time if other models exist outside Tesla. It's hard to stomach a 60K loss in a year. For some of us it's much much more than 60k when you factor in luxury tax on these high end vehicles. It's more like 100K in a year. JM2C... If Tesla does refresh and release another model.... I probably will upgrade

 

[Sonic_78]

The S and X as we know it were "The Best" Tesla could offer as a company bleeding cash and not profitable. Now that they're profitable, I'd like to see what they can offer. Come on.... refresh!

 

[TeeEmCee]

Now that they're profitable, I'd like to see what they can offer. Come on.... refresh!

I liked the part where they're now profitable.

The Model S sales volume should be filed in the "bloody obvious" category. Last time I considered (and decided against) buying one, some 18 months ago, it was 10K cheaper than today, in pre-tax-credit money. This was in a market with no other choice.

 

[FreqFlyer]

IMO, a next gen S and X are two years away. After Roadster (minium cost), Semi and Truck (profit makers). They will take styling cues from the new Roadster (think Roadster with four doors), whatever upgraded batteries the Maxwell tieup will bring and new production techniques like the minimum cabling and more automation seen in some of patents.

In the interim, interior refresh to help sales through the last two years. Its cheaper than trying to Jerry rig the chassis to accept the 2170 batteries, and EM stated the S and X was not getting 2170 batteries.

While S and X are important and high margin vehicles, when the Y production is running full tilt, the S and X sales will become less important, and less urgency to update them till the new gen arrives.

 

[Tanquen]

The problem with Model S as I see it is that there isn’t enough difference in the car itself to justify the price against Model 3. I configured a new 3 and S with everything I’d want. The S was $97,000 the 3 was $61,000. If I had to make that call today I’d go with the 3 as I just can’t see $36,000 worth of difference.

But that is like every luxury car every. Call it a fool’s tax or the illusion of exclusivity or even big trucks that they jack up the price just because they sell. Is any super car even remotely worth its price? Most any vehicle over $30k is just throwing money away. The resale on most any luxury vehicle $50k and up drops like crazy in the first few years. Who wants a 2015 luxury car for just a few thousand less than a new 2019? Many cars they just make it a little bigger/longer, some more leather and tiny pieces of real or even plastic wood and bam $15k more for a luxury car.