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Tesla is moving to more of an inventory sales approach for Model 3

24K views 78 replies 36 participants last post by  Topher 
#1 ·
My source who has been quite reliable so far just relayed some news that will be sure to upset some people.

What I was told is that Tesla will be moving to more of an inventory sales approach with Model 3. This process has already started with Model S where Tesla is getting more and more incentivised for the owner advisors each quarter to hit their goals and to push more inventory cars that are prebuilt by Tesla.

This does not mean that you won't be able to custom configure your Model 3, only that doing so will take longer and prebuilt configs will generally take priority. This is also related to streamlining production and helping to increase the speed of the production ramp.

We shall see if this indeed happens but I'm told this change is already happening at Tesla stores and at corporate.
 
#6 ·
I think this ends up being the smartest way to go in the long run. If I can get something that is similarly spec'd to what I want and save a little, great. If it costs me a little more and has something I wasn't dying to have, great. If I can just customize and wait a little longer, great.
 
#7 ·
the S/X started showing inventory models available that are similar to options selected, so reasonable that they would do something similar with the 3. Still think it would be based being invited to configure though, so there's that... IIRC the S/X site was not open to configure a new order until they worked thru the reservation holders.
 
#9 ·
the S/X started showing inventory models available that are similar to options selected, so reasonable that they would do something similar with the 3.
Agreed. After going through the Tesla ordering screen this week, I noticed that the right margin dynamically displayed inventory cars available that had similar configurations to my selected options. Inventory sales is already happening.
 
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#10 ·
I prefer to order the car the color and way I want it. I enjoy the usual 7 week anticipation of delivery.

I don't like to compromise on what I want in a car.

If the car was in stock with the color and options I must have...I refuse to pay extra for other options...I don't really want...

I believe creating an inventory model is an error...

Right now it's a boutique item dream for tesla....I believe tesla converting would cause pricing capability to drop.

I guess the impending competition in battery electric cars will make sense...
 
#13 ·
I believe creating an inventory model is an error...
Look, this isn't a big deal.

As a "boutique" car manufacturer, Tesla could manufacture every vehicle "to order".

But as a mass-market car manufacturer, they're going to have to act a little more like a mass-market car manufacturer. They're simply not going to wait until they have an order before building a car. They want to keep the alien dreadnaught running at full speed (ie efficiently), and they won't necessarily have orders for every car they build.

So I expect - just like any other manufacturer - that you'll still be able to place an order for exactly what you want, then wait several weeks and it will be built and delivered to you. But in the meantime, Tesla is going to churn them out, putting inventory in its showrooms, and then try to sell that inventory to people who'd like to drive home that same day with a new car.
 
#14 ·
Streamlining makes some sense but they will have to first figure out the most popular configurations.
Every other car manufacturer has figured it out. Tesla will too. If they guess wrong, they just have to drop prices a bit to make the non-sellers more appealling.
Even then, cannot see how someone buying a brand new 35k+ car will be happy to be told to pick from pre-selected configurations and colors.
Are you trying to tell me that nobody goes to, say, a BMW dealer, finds something on the lot that's "close enough" to what they want, and buys & drives it away that very same day?
o_O
 
#15 ·
Anyone looked at VW configs lately?? Literally 2 things you can change on the car other than colour. They offer basically 2 trim levels with preset options and maybe a choice of 1 other colour interior.

That's how you make thousands of cars a week.

My video last year where I suggested Tesla would do prebuilt config bundles is looking more and more likely.

The Model 3 program is proving to be a very different direction for Tesla. You'd better get used to it.
 
#26 · (Edited)
Anyone looked at VW configs lately?? Literally 2 things you can change on the car other than colour. They offer basically 2 trim levels with preset options and maybe a choice of 1 other colour interior.

That's how you make thousands of cars a week.

My video last year where I suggested Tesla would do prebuilt config bundles is looking more and more likely.

The Model 3 program is proving to be a very different direction for Tesla. You'd better get used to it.
I think you have answered yourself here. There is a good reason why color and two other options are configurable at a minimum. Not suggesting inventory cars won't sell but given the option between that and configurability of at least color and two other options, I can predict what most buyers would prefer - the key word there being 'prefer'.
 
#16 ·
Being able to create a boutique buying experience tends to improve customer satisfaction and enables msrp purchases.

I'm sure you guys are right, I believe the current meathodolgy would be more profitable ...

Still with ev s coming from jaguar, Mercedes etc...I assume tesla will become more main stream to compete for each sale including those impulse sales which make up a huge portion of the automobile industry...

Immediate gratification is almost an American Tradition...
 
#17 ·
I believe there will always be a percentage of buyers who are not willing, prefer, or cannot wait, & will accept a variation in the options/color, for an inventory vehicle.
The touch, see, drive, then buy candidate.

Have you ever ordered a car with your options/color , waited several week for it to arrive and found out it was not exactly what you ordered.
Very Disappointing
There are so many reservations so why not ask them to configure to evaluate what groups of options/colors would be good for inventory cars.

I say bring on inventory cars for mass produced cars , if not the eventual competition will.
 
#18 ·
The last new car I bought, I called the sales guy at the dealership and gave him my list of options I was looking for. He came back a day later with about a half dozen cars to choose from that met the option requirements and could have any transferred to his dealership within another day. That's kinda what Tesla is starting to do with their inventory cars.
 
#25 ·
This is exactly what my experience was when I bought my last car. I called up three dealerships in my area and told the. The options/color I was looking for. They were able to find a car that was inbound to one of the dealerships straight from the factory and told me when it would arrive. I was able to pick up the car the same day it arrived after a lengthy paperwork process.
 
#19 ·
Tesla not only has referral contests for owners but they have incentives for sales staff internally. I'm told they're really trying to push inventory as a way to streamline production so they can meet their production and delivery goals which keep increasing every year.

I can't see any other way, knowing this now, that they can really meet objectives with Model 3.
 
#21 ·
I like the idea a lot both as an investor and future owner. There are a large number of people that buy stuff on a whim or notion and you want to be able to support those sales. I see every sale as another ICE taken off the road and another fraction of a percent towards the end goal. I'd rather have to choose from a few preconfigs if it means getting more Model3s on the roads racking up electric miles.

It makes it a lot easier for Tesla to place orders with its suppliers too. Something like the integrated solar panel Elon discussed.. who knows how popular a feature like that could be. They could have a ton of panels eating up valuable space if they're just not moving. However put them into a package and you know you'll shift them a lot easier.
 
#29 ·
I like the idea a lot both as an investor and future owner. (...)
I view it favorably too yet bear in mind that it is much more common - and therefore expected - to buy a car off the lot in NA than in Europe where we generally order our car to our specs (with or without packs... ;)) then get it 2-3 months later at a minimum...
Just saying (with a European spin... :))
 
#22 ·
This is definitely the way forward to mass production. However, I have ordered my last two new cars with the exact options and colour that I wanted and had to wait a week or two for delivery. In both cases, I was not disappointed with the choices I made.
11 months and counting for my Tesla Model 3 sitting in my driveway in all its glory!!
 
#24 · (Edited)
This makes NO sense. There are more than 400,000 people who have been champing at the bit to configure their Model 3 for a year.
True. And I expect the first 400,000 builds to be made-to-order for their respective buyers. But once Tesla gets the factory ramped up to producing 400,000 units per year, there will no longer be a pent-up demand of 400,000 people willing to put down $1000 deposits for over a year before getting a car. Tesla isn't just going to slow down on producing cars - they're going to continue to churn them out, and start switching to the new sales approach as appropriate.

Maybe the term "switching to" is confusing people. They're not changing how they sell cars. You will still be able to order exactly what you want, and wait for it to be built. They're just adding another sales approach, because they foresee the day when their production ability outruns pre-orders. There is a whole other group of car buyers that just want to go to the store and trade in their old car for a new one that very same day, and those people aren't yet buying Teslas.

Tesla already started doing this last year. You can go to most showrooms, test drive an S, and buy one of the Model S that they've been using for test drives.
 
#30 ·
If they start churning out a certain spec/ stock model 3 first, purely to allow a smoother production ramp-up and those inventory / stock options get offered first before the custom configuration opens , It will annoy some reservation holders , however the bundled options will likely satisfy a decent majority . More cars to more people faster and that is not a bad thing.
.
 
#31 ·
Hopefully Tesla gives preference to those of us who lined up at the stores before the reveal; as in be able to fully customize (with special color selections?) and get our car delivered sooner than those who did not (barring the time zone rule). Maybe that's one of the things Elon meant in his tweet that they'll do something special for us.
 
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#32 ·
I'm a day one reservation holder, and there are a few things that I definitely want in my Tesla and wont compromise on but this seems absolutely the way to go. Ruling out paint color how many variations do we think there will be? Does anyone think there will be more than two battery sizes?

Looking at the Model S configurations I think Tesla can and will pump out a lot of pre maid Model 3s with
either 55kWh(maybe 60), 75kWh battery
everything will be built with FSW just a software unlock to purchase to use, so no variation there
no smart air suspension
no speaker upgrade
one standard wheel set
and in a variation of 3 or 4 interiors

I think this would satisfy most people. I know some of you northerners will need to spring for the cold weather package, but at the price point this is aimed at I don't see most people springing for the smart air suspension and audio upgrade.

For me the first upgrade I will make will be the all glass roof. Everything else will most likely be standard. I will go for the larger battery if they can get it within $5,000 of the base. I love the Midnight Silver color and hope that it is an option but honestly I think most every color looks great.
 
#34 ·
One big difference between Tesla and the other car manufacturers, is that Tesla doesn't have model years. They implement changes and new features as they become available.

If they start moving to an inventory model, I think they risk holding an inventory of vehicles that have outdated technology, which would most likely require discounting. This seems to introduce an element of risk of profit loss that doesn't exist to the same degree for manufactures that only make changes to a vehicle every couple years.

Maybe this means changes to the Model 3 will be made less frequently than we have seen changes made to the model S and model X? Or maybe Tesla avoids the problem by just not holding a large quantity of inventory?

On a personal level,I really don't care either way as far as the experience as a purchaser. I'll order the car that I want and wait if I have to.
 
#37 · (Edited)
They have been building more and more inventory cars over the last year. Tesla is pushing hard to increase their production and delivery count each year and they've figured out a few days to increase demand (referrals) but they're also falling into a groove of feature release cycles based on quarters so anyone wanting "new tech" is always better off waiting until a quarter ends.

Going forward they want to reach 1million cars a year production so streamlining choices and having available inventory to buy are keys to getting there. Then you sell 50K cars a year you can get away with custom orders for each of them but it's not sustainable @ 10X production or higher.

In other news... $TSLA is now over $312/share today :)
 
#38 · (Edited)
But this model screws up the whole priority model, employers, owners, Inline reservationists, Online before release, WEST TO EAST.

So whomever calls dibs on the first available inventory would get their car?

Of course they can invite tesla studio config based on the same priority but it would mean that there are more of the same car than customized order.
 
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