Theory on why Texas deliveries are slow.

Firewired

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#1
Sorry for the long post.

Occam’s Razor (https://en.wikipedia.org/wiki/Occam's_razora) - The simplest explanation explaining everything that you are seeing is often correct.

I have been scratching my head and been frustrated trying to figure out and make sense of the difference in Texas deliveries and what has been reported in other areas of the country, even states which are much further from California than Texas is. One thing that is clear is that the "Texas quagmire" entails a high use of rail transportation and many cars which are delayed throughout the process. It just seemed so different from what everyone else is reporting about getting their cars surprisingly quicker than initially expected.

This morning when I read the Electrek article about the attempt to deliver upwards of 400 cars at once and it finally hit me. (https://electrek.co/2018/09/08/tesla-big-model-3-delivery-event-for-model-3-deliveries-changes-strategy/). This jives with everything I have been seeing about people reporting multiple cars delivered at once and their delivery dates moving up earlier than expected. This is consistent with Tesla’s historical end of the quarter push to have the highest number of delivered cars as possible. If Tesla meets or beats expectations of delivered cars it can obviously potentially impact its stock price, as well as other things such as ability to get lines of credit. What I could not figure out was the incongruence of Tesla’s apparent push to deliver as many cars as possible in some areas of the country and apparent lack urgency to get cars to their owners in Texas. While Texas is not as big as California it is in the top 5 of Tesla sales.

I think that this may all relate to the fact that starting in 2/2018 Texas started requiring Tesla to have cars paid for before they reach Texas. Now it appears that instead of putting the vast majority of Texas cars on trucks which take three to four days to arrive they are put on rail which is a cheaper, and a much slower method. Even when the cars do arrive in Texas many cars are allowed to sit in lots with no apparent urgency getting them to the delivery center or delivered. In my own case, my car has been 100% paid for 24 days and arrived to the California rail yard 22 days ago.

My theory is that there is only one explanation in which this dichotomous treatment can make any logical sense. Tesla counts the cars as sold when the customer pays for them. In most states they are only able to book the sale when the car arrives at the delivery center and the customer pays for the car at or near the time of delivery. In Texas the customer pays well before the car arrives. With that in mind it would then make sense to prioritize using the faster method of trucks for those states that you have to deliver to get credit. This would also explain the apparent lack of urgency in getting Texas cars to the delivery center and in the customer’s hands, and no negative impact in letting them back up at transport hub’s parking lots and focusing resources elsewhere.

Just my theory, let me know what you think.
 

GDN

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#2
I think part of this is true, and I've always said and believed that when a TX resident buys a Tesla it is yours the day you pay for it. The car is still in CA or in transit, but Tesla does the shipping and insuring on your behalf, but when you send cash or your financial institution sends money and you've signed the MVPA, the car is yours. I don't think anyone could ever argue that or prove differently.

You've never been able to buy a car directly from Tesla in TX, but the process did change. You used to be responsible for filing for your own title and paying your tax bill directly to the state. They've found ways around this and now make it a little more like a traditional dealership. The states have reciprocal tax agreements for purchases like this, they can collect the TX state tax on the sale in CA, then they remit that for you and apply for the title and tags. You sign that stack of papers separately from the MVPA. They are sent to you Fedex. You even sign a Power of Attorney so that they can sign on your behalf for some of the papers.

So they found another way to likely save some money as well by using rail. That only started sometime in the last 6 to 8 weeks or so I would guess. I know through June the cars were making delivery within 7 to 10 days after they were paid for. It was an incredible experience, very nice.

I'm guessing the real event that triggered this was the hold back in June so they could make the 200,000th sale early in July and extend the full tax credit 3 months for US buyers. They had so many cars they had to find a different way to get them here, rail was the answer. It also sounds like they are ending up in a yard out at Alliance, which may be new and there is not a good coordination of FIFO or something, so some cars are getting hung up out there, even for Dallas deliveries, just 40 miles away or so.

Sorry this is taking so long and I know I would be really irritated as well, but we've been caught up in the growing pains of a young company that didn't properly prepare for the growth they projected themselves. You can still thank TX for part of this hell for stupid laws. Those that prevent you from buying the car here in TX and even prevented you from a state rebate of $2,500 which an EV that is bought directly from a "Dealership" in TX qualifies for (there may be other rules, but it is out there).
 

Dr. J

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#3
I think part of this is true, and I've always said and believed that when a TX resident buys a Tesla it is yours the day you pay for it. The car is still in CA or in transit, but Tesla does the shipping and insuring on your behalf, but when you send cash or your financial institution sends money and you've signed the MVPA, the car is yours. I don't think anyone could ever argue that or prove differently.

You've never been able to buy a car directly from Tesla in TX, but the process did change. You used to be responsible for filing for your own title and paying your tax bill directly to the state. They've found ways around this and now make it a little more like a traditional dealership. The states have reciprocal tax agreements for purchases like this, they can collect the TX state tax on the sale in CA, then they remit that for you and apply for the title and tags. You sign that stack of papers separately from the MVPA. They are sent to you Fedex. You even sign a Power of Attorney so that they can sign on your behalf for some of the papers.

So they found another way to likely save some money as well by using rail. That only started sometime in the last 6 to 8 weeks or so I would guess. I know through June the cars were making delivery within 7 to 10 days after they were paid for. It was an incredible experience, very nice.

I'm guessing the real event that triggered this was the hold back in June so they could make the 200,000th sale early in July and extend the full tax credit 3 months for US buyers. They had so many cars they had to find a different way to get them here, rail was the answer. It also sounds like they are ending up in a yard out at Alliance, which may be new and there is not a good coordination of FIFO or something, so some cars are getting hung up out there, even for Dallas deliveries, just 40 miles away or so.

Sorry this is taking so long and I know I would be really irritated as well, but we've been caught up in the growing pains of a young company that didn't properly prepare for the growth they projected themselves. You can still thank TX for part of this hell for stupid laws. Those that prevent you from buying the car here in TX and even prevented you from a state rebate of $2,500 which an EV that is bought directly from a "Dealership" in TX qualifies for (there may be other rules, but it is out there).
And to add to both posts: Texas has--what?--all of four delivery centers (not including El Paso)? I think there is a throughput issue in Texas with the number of orders versus the number of places to delivery them to customers.
 

Firewired

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#4
Well for San Antono it isn’t a capacity issue. I have been driving by every couple of days to see if my car had come in. There is a bunch of unused open space and have been about 10 3s sitting there undelivered for at least the last week.
 
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#5
TLDR - Making the easiest deliveries first and not caring how long those difficult rail deliveries sit.

That really isn't a theory. It is a clearly demonstrable fact.

The rail cars are seen as a major annoyance that make life more difficult for the service centers. They don't care to make their lives more difficult because they don't have to. Meanwhile the truck deliveries are coming fast and furious and they are delivering those cars to owners. No one is claiming ownership for this problem @ Tesla because the owners waiting for these cars have no recourse. "We already have their money. What are they gonna do? Ask for a refund and give up their $3500 deposit?" Delivery advisors are putting in the delivery dates and trying to force their hand, but the Service centers are simply sticking to their status quo of easy deliveries and keeping the flow of their direct local overflow lots and not bothering to include the rail lots at all. They have enough on their plate keeping the workload of occasional paint and parts faults from the regular truck flow and don't want to be bothered with the extra step of getting the rail cars and prioritizing the longest waiting customers. They will get to the difficult cars after the easy cars are delivered. That's my theory.
 
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Quicksilver

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#6
TLDR - Making the easiest deliveries first and not caring how long those difficult rail deliveries sit.

That really isn't a theory. It is a clearly demonstrable fact.

The rail cars are seen as a major annoyance that make life more difficult for the service centers. They don't care to make their lives more difficult because they don't have to. Meanwhile the truck deliveries are coming fast and furious and they are delivering those cars to owners. No one is claiming ownership for this problem @ Tesla because the owners waiting for these cars have no recourse. "We already have their money. What are they gonna do? Ask for a refund and give up their $3500 deposit?" Delivery advisors are putting in the delivery dates and trying to force their hand, but the Service centers are simply sticking to their status quo of easy deliveries and keeping the flow of their direct local overflow lots and not bothering to include the rail lots at all. They have enough on their plate keeping the workload of occasional paint and parts faults from the regular truck flow and don't want to be bothered with the extra step of getting the rail cars and prioritizing the longest waiting customers. They will get to the difficult cars after the easy cars are delivered. That's my theory.
I agree, but this just goes against great customer service. If they want to gain and keep loyal customers, they need to do a better job to get paid cars to their customers. A lot of us keep saying that once we take delivery and drive our Model 3s off the lot, then all the pain and agonizing during pre-delivery would go away - I still say it’s a poor customer experience when customers have to deal with any pain at all - granted, there may be some unique circumstances but those should be the exception not the rule. Tesla need to do much better with pre-delivery, period. I was lucky to have a stress free delivery experience and I was hoping for others to have the same experience.
 

Ed Woodrick

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#7
Texan ain't special, no matter how much you want to be. There are only so many train cars and so many auto carriers available for Tesla. Cars are not delivered individually, they are delivered as batches for each Delivery Center.
And most importantly, now that they are passing 79,ooo cars in basically 6 months, there's still a few hundred thousand people waiting.
 

Firewired

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#8
In Georgia do you pay 100% for your cars before they are even allowed to leave California?

I paid for my car 3 1/2 weeks ago and see no indication of it moving from DFW where it has sat for two weeks.

My first loan payment is due in a couple days on a car that I have not taken delivery of, and don't know if it will be further delayed or even if it will have issues.

Is that how it is in Georgia?
 
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Texan ain't special, no matter how much you want to be. There are only so many train cars and so many auto carriers available for Tesla. Cars are not delivered individually, they are delivered as batches for each Delivery Center.
And most importantly, now that they are passing 79,ooo cars in basically 6 months, there's still a few hundred thousand people waiting.
Guess how many of those "few hundred thousand people waiting" are in Texas vs. any other state? They really have to have their stuff together to not make too many people upset the impact is orders of magnitude greater than any other state with the exception of maybe California.
 

Ed Woodrick

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In Georgia do you pay 100% for your cars before they are even allowed to leave California?

I paid for my car 3 1/2 weeks ago and see no indication of it moving from DFW where it has sat for two weeks.

My first loan payment is due in a couple days on a car that I have not taken delivery of, and don't know if it will be further delayed or even if it will have issues.

Is that how it is in Georgia?
No, honestly, that isn't a plus for Texas.
 

Ed Woodrick

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Guess how many of those "few hundred thousand people waiting" are in Texas vs. any other state? They really have to have their stuff together to not make too many people upset the impact is orders of magnitude greater than any other state with the exception of maybe California.
You indeed missing my point. You seem to think that Tesla is specifically punishing Texas when there are a lot of other people in other states that haven't got theirs either.

If you want to say that Tesla is punishing Texas because if the law, then maybe you Texans should get the anticompetitive law removed! The law seems to suggest you Texans don't want to purchase Teslas.

My main point here is that there isn't a conspiracy against Texas. We've got two stores in GA and there are 8 in Texas, that pretty darn close from a population comparison.
 

Firewired

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#12
That's a good point. My contention is that it would make a logical business decision for Tesla to spend it's limited resources using quicker and more expensive means of transportation to get cars actually delivered to customer's in states that's required thay in order to book the purchase as we approach the end of the quarter. Conversely it would make sense to not spend a lot of manpower on Texas being they already have credit for those sales before the cars leave California .
 
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GDN

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That's a good point. My contention is that it would make a logical business decision for Tesla to spend it's limited resources using quicker and more expensive means of transportation to get cars to customer's in states that's required to book the purchase as we approach the end of the quarter. Conversely it would make sense to not spend a lot of manpower on Texas being they already have credit for those sales before the cars leave California .
Along those lines, I know Tesla is going to do whatever they can to take another $ of savings to the bottom line if they can, but what does a car hauler charge per mile? They haul 7 to 8 cars per load, and we pay $1000 - $1200 for a delivery fee. That could be $7000 - $9200. What is the hauler charging? Is Tesla losing money on that or ? Roughly 1700 miles from Fremont to the Dallas Service Center. Not sure if much further to San Antonio.
 

Firewired

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#14
No, but there are limited number of drivers and trucks . Trains can carry many more cars, but are much slower. It makes more sense to use proportionally more rail for Texas were they already have credit for the end of qiarter numbers .
 

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Along those lines, I know Tesla is going to do whatever they can to take another $ of savings to the bottom line if they can, but what does a car hauler charge per mile? They haul 7 to 8 cars per load, and we pay $1000 - $1200 for a delivery fee. That could be $7000 - $9200. What is the hauler charging? Is Tesla losing money on that or ? Roughly 1700 miles from Fremont to the Dallas Service Center. Not sure if much further to San Antonio.
I'm not sure the amount of Tesla's delivery fee that is profit matters much considering that it is well known that auto dealers make a profit on the delivery fee. There is a delivery fee even if you take delivery in Fremont, no?
 

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#16
I would hate to start my monthly payments on a car I can't drive much less one I haven't seen.
 

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I'm not sure the amount of Tesla's delivery fee that is profit matters much considering that it is well known that auto dealers make a profit on the delivery fee. There is a delivery fee even if you take delivery in Fremont, no?
Yes - agree, I believe there is a law that says they must charge the same person the same amount, but I was trying to just at least justify the TX deliveries to see if they wouldn't still be making money if they could find enough trucks and continue to truck them vs the rail they've started which has caused another huge disaster because they can't get them out of the rail yard.
 

PNWmisty

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#18
I would hate to start my monthly payments on a car I can't drive much less one I haven't seen.
Complain to the State Legislator in your district.

Of course, he/she might dismiss you with something like "That's what you get for not supporting my constituents who are in the Texas oil business!";)
 

Firewired

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#19
Complain to the State Legislator in your district.

Of course, he/she might dismiss you with something like "That's what you get for not supporting my constituents who are in the Texas oil business!";)

It isn’t the Texas legislators that chose to use the slowest means of transport to get cars to Texas. I would,have been fine to pay and have my car come direct by truck 3 to 4 days later like my prior Tesla purchases.

My car left California 3 weeks ago and has been in Texas for two weeks. That is a Tesla problem not a Texas problem. I think it was done on purpose to maximize deliveries over customer satisfaction.
 

PNWmisty

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It isn’t the Texas legislators that chose to use the slowest means of transport to get cars to Texas. I would,have been fine to pay and have my car come direct by truck 3 to 4 days later like my prior Tesla purchases.
I suspect there is a lot going on here that we are not aware of. The Texas law against direct sales can have unintended consequences and it's possible that the reliance on trains to deliver to Texas is a side-effect of that. As others have pointed out, there may be less incentive for Tesla to speed the delivery if it's already sold. Certainly, the sales contract binds Tesla to a delivery within a certain timeframe (and Tesla is adhering to the contract). No?