When it comes to Tesla’s delivery delays, almost everyone is talking about the Model 3, but today the Model S and Model X delivery delays are more interesting.
Tesla increased the delivery wait times for new orders of both vehicles – claiming that high demand is creating a backlog.
The time between a new Model S or Model X order and delivery has always been fluctuating and it is dependent on the buyer locations.
It can change throughout a quarter as Tesla is changing focus from creating a backlog of new orders or selling inventory vehicles or building batches for other markets, like Europe and Asia, but it has often come down to just a month or two in the US.
It’s why it was surprising when Tesla increased the Model X delivery time to June 2018 earlier this month – creating a 4 to 5 months delay to get the all-electric SUV.
Furthermore, the automaker did the same for the Model S yesterday.
To be clear, someone ordering a Model S or Model X today shouldn’t expect to take delivery for another 4 to 5 months.
As we learned last week, a current Tesla owner in the US can technically expect to get a Model 3 sooner if they want the current configuration available and place a reservation today.
This unusual delay sparked speculation that Tesla could be working on a design refresh or production line update for Model S and Model X.
But we reached out to the company about the situation and a spokesperson said that the new delivery timeline is the result of high demand increasing the backlog of orders.
Several industry watchers expected that the arrival of the Model 3 would impact negatively sales of the Model S, but the company insists that new orders are high.
In its shareholder letter released earlier this month, Tesla reported that “combined Model S and Model X net orders in Q4 were just shy of Q3’s all-time high.”
That’s actually quite surprising to me. I was never onboard with the idea that Model 3’s cannibalizing will kill Model S, but I still thought that it would have a decent negative impact on the flagship vehicle’s sales.
But it looks like it had no impact or even possibly a positive one – at least so far.
Of course, the delays in Model 3 production probably contributed to it as some Model 3 reservation holders likely got tired of waiting for the vehicle. Though the most expensive trims of the Model 3 should be the most competitive with Model S and yet that’s what is available today, which I think should limit the impact.
Either way, a 4 to 5-month backlog of Model S and Model X orders is impressive no matter how you look at it.
Earlier this month, Tesla said that it was expecting a combined production of roughly 100,000 Model S and Model X vehicles in 2018.
It looks like half of the demand for the year is already ordered and at this pace, the 2018 Model S and Model X will be sold out in a few months – just like Model 3’s production is already reserved.
What could be sustaining Model S and Model X orders in the US today is the fear of some buyers that waiting for the Model 3 could result in losing the $7,500 federal tax credit, which is expected to start running out for Tesla in the next few months.
Tesla hasn’t been transparent about when they think they will hit the threshold of 200,000 deliveries in the US. At that point, Tesla will have 3 to 6 months of eligibility to the full $7,500 federal tax credit before it is gradually phased out.
Our own estimate suggests that it will happen either this quarter or the next, which means that those ordering a Model S or Model X in the US right now can expect to take delivery around the same time as the tax credit starts phasing out.
If you’re looking to buy a Model S or Model X, you can use our Tesla referral code for unlimited free access to the Supercharger network.
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