Tesla’s Cybertruck pickup truck Unveiled This Evening (11/21)

This is getting no where as you refusing to even listen to my reasoning or address the numbers I have crunched. You have not addressed the issues that I have raised but instead putting words in my mouth and misstating what I have said.

Let us just take the points you made

Let us say there were 100,000 reservations and in year one 12% were cancelled or in raw numbers 12000. In year two, 24% were cancelled or 24,000. So a total of 36,000 were cancelled, which is 36%. The article clearly says it was double of last year. There is no ambiguity about that.

Again, putting words in my mouth and not addressing the facts. Where I have disputed that there were 455,000 reservations or any other number from Tesla? Where have I disputed Tesla"s sales numbers? Tesla as far as I know has never provided the conversion rates (number of reservations that been converted to orders). In my calculations, I have quoted and used the 455,000 numbers. If Tesla has provided a conversion rate, have please show me where they have provided that rate. If they have provided rate, that would be the final word. Your numbers will not matter any more and my estimates will not matter any more.

The major point of this discussion was that you threw out a 74% number for conversation of the reservations for Tesla Model 3. To be very clear, conversion means how many of 455,000 reservation resulted in actual purchase of a Model 3. I am questioning the 74%. I do not see how you obtained the number, or what the corroboration is. If I say something (as I have), you have been quick to jump and demand some validation or verification of the statement. I am asking to provide the same clear and unequivocal verification of the statement rather than personal attacks.

I crunched some numbers, and I posted both the numbers and my assumptions. My estimates could be wrong but I have provided the basis for estimation. My numbers say about 20 to 30% conversion rate and I am the first one to say that it is an estimate and is most likely wrong. That said, based on my rough calculation, I cannot see it being 74%, but I could definitely see it being higher than 20-30%.

The reason we are taking about this number is to see if there is estimate that could be made for the Cybertruck. If they have about 200,000 orders and there is a 74% conversion rate, then they will be selling about 148,000 trucks to the reservation holders before they start selling it to others. If the conversion rate is say 25%, then they have an order backlog of about 50,000 units after which they will sell to others.

Again, not dealing with what I said and trying to evade the question. I have used Model 3 sales numbers from InsideEv which should be very close to what Tesla says. I have posted it on this thread. I have no reason to doubt the Tesla sales numbers and at no time have I ever challenged that. Can you please show me where or when I have questioned the sales number? What I said was that if there was really a 74% conversion rate i.e. 74% of the reservation holders ended up by buying the Model 3, Tesla would be shouting it from the rooftops. Again back to my original question, where has Tesla provided the conversion rates?


Now let me say something. Model 3 is a popular car and it is selling very well. Even if they had a 20-30% conversion rate, the bottom did not fall out of the market. Tesla is continuing to sell well, averaging over 12,000 cars a month in the US for 2019. That is a very good number. Once the reservation backlog was satisfied, they continued to find new customers and new markets. The reason why Tesla Model 3 is selling well is that is providing a good price value to the customer.

With the Cybertruck, given that it has stainless steel body, armored glass etc., I have as (@bwilson4web eluded to) a healthy skepticism that they can keep the price point of $39,000 or will actually be able to get it out by late 2021. Now let us assume that it comes out in mid 2022 and is priced at $45,000. Is that failure? Not in my books (Repeat not in my books), that would be pretty impressive as today you cannot get a truck with those specifications at that price today. If they were to come out at $60,000 or somewhere close to where Rivian is, then I would be a lot more critical. In my postings, I have defended Tesla and Elon many times, yet you have ignored each and every one of them.

Again, I am not sure that we will get anywhere. If you can provide me a basis for the 74% number, then you have made your point. If you cannot, I an entitled to be skeptical of that number and of whatever point you are trying to make using that number. Calling me names will not help. Facts will.

 

These can be additive if the same base is used. You are using a certain base for a period. What you are saying is that the base is different in a different period. It won't be additive in that case. The article is not clear if the base is original base or not and so I assumed the base remains the same. Now there is nothing in the article that suggests that my assumption is wrong, and in all fairness, nothing that says it is right. So I have assumed the same base and hence it is additive. Now even if the base changed slightly, it will not make a big difference.

So to clarify, if there were 100,000 reservations, 10% were lost were lost first year, so it is 90,000 left, so if again 10% were lost of the 90,000, then only 9,000 were lost. So in the hypothetical case, it would be 19,000 orders that were lost for 19%. If that was the basis of the article, you are right to that limited extent. And that is nitpicking, and will not substantially change facts. In that case it may not purely additive as base is not the same, but as we are talking about a 2 year period, it does not make a material difference. .


So I used 455,000 as the base, which was the number reported by Tesla in March/April 2019.

Again, I have not come out with a definitive number, it looks to me that it could be between 20-30% because of various assumptions. The 455,000 was the number in March/April 2018. There could have been reservations after that but they are not counted. There could have been reservations cancelled before they 455,000 number was polished. There were some people who had reservations made before the 455,000 number came out and they may have not converted it into orders even today. I do not know why they would do it, but let us say some might. All those will serve to make percentage lower.

Let me throw out another number. Worldwide till June of 2019, about 255,000 Model 3s were sold. Assuming that all the Model 3s sold world wide From January 2018 to June 2019 were to reservations holders (which is really not a plausible assumption as many have bought it without reservations and reservations were not needed after July 2018, when only 38,000 cars were sold. So it would logical to assume many if not most of those who bought the car after July 2018 were non reservation holders). I hope you will agree that 455,000 was a reservation numbers provided by Elon. 255,000 is a verifiable number. Even with this absurd assumption (that all sales were to reserve ration holders till June 2019), 255,000/455,000 is about 60%, not the 74%. Now you can continue to argue your case, that not all reservation holders have withdrawn the money etc etc. The simple fact is that we have not yet reached 74% of the 455,000 number even total sales even today. Yet you continue to argue. As I have mentioned above there may be some reservations still pending from the 455,000 number but why would someone want to keep it for this long, have their money tied up? As pointed out reservations become unnecessary from July 2018. What would people get by keeping their reservation.

No, conversion rate is how many reservations were converted into orders. Tesla had a backlog of 455,000 in March/April of 2018. By July 2018, anyone could reserve a Model 3 and get delivery, so it suggests that many people who were offered a car did not take it. At that time less than 38,000 cars were sold. If I use the 38,000 number as the total number of reservations converted into orders, I would have come up with 9% conversion rate. I did not. I assumed that many people converted their orders even after July and that is why I took between 100,000 to 150,000 which would be well into Feb. 2019. With that I get about 20-30%. May be it was 40%. I cannot for the life of me see it being close to 74%.



You have not provided any basis for 74% number. You and I interpret the CNN article differently. Forget seeking alpha. My back of the napkin calculation says between 20-30% with many assumptions (and you have not looked at my numbers).

I am done arguing as it serves no point, you appear to be arguing for the sake of arguing. The reason why this argument started was the meaning of the 200,000+ orders for Cybertruck. There are some in the media who believe that it is significant, there are others who do not much see into the 200,000+ reservations at $100 a pop.

Here is one that does not see it as mattering much

https://www.msn.com/en-us/money/companies/teslas-200000-cybertruck-reservations-dont-mean-much----for-now/ar-BBXk32J

I like this article below which takes a more balanced approach. I agree with the article. It acknowledges that while the number of 200,000+ orders is impressive as it shows a lot of interest, it may not mean much to predict the actual buyers. He dismisses the arguments of the Tesla Naysayers but does not buy the cool-aid of the Tesla Cheerleaders. I think the truth is somewhere in the middle and that is too premature to read too much into the number but it cannot be dismissed either.


https://cleantechnica.com/2019/11/26/tesla-cybertruck-reservations-%E2%89%A0-purchases-but-they-mean-something/

Most importantly, I think people on both sides are putting too much in their opinions of what the figures mean — or at least it reads like that. I don’t often end up the “moderate” who sticks to the middle of an issue, but I think that’s really the place to be on this one.


Take Preorder Numbers with a Grain of Salt
The first thing to emphasize is that the $100 preorders are definitely not reservations,......


… But They Mean Something!
Despite what I just wrote, preorders do mean something. At the very least, they mean that a ton of people are interested in the Cybertruck.


I am happy to come back to this thread in about 2.5 years time and see what the situation is.

 

I agree with you. That was my point. I will add one more criteria, What the final cost will be? Can Elon deliver all the features he has promised at that price?