In a short email to employees over the weekend and obtained by ElectrekTesla CEO Elon Musk thanked Tesla employees for the “unconditional delivery push.”
Tesla is known to have intense late-quarter delivery surges due to its distribution system, which is very different from other automakers that use third-party dealers.
Since Tesla sells directly to customers, the automaker owns the vehicle until it is fully delivered to the buyer and paid for.
As a result, transit times are extremely important to Tesla financially as the automaker bears the cost of building these cars and does not receive any money until customers can collect them.
Therefore, when Tesla has a lot of vehicles in transit at the end of a quarter, the quarter looks bad for them financially.
That’s why Tesla is trying to build vehicles for exports at its Fremont plant and Gigafactory Shanghai at the start of the quarter and vehicles for local deliveries later to allow transit time by the end of the quarter.
However, this strategy requires Tesla’s sales and delivery team to manage large volumes of vehicles to be delivered towards the end of each quarter, known as “delivery waves” or “delivery surges”.
The third quarter of 2021 ends this week, and it looks like this delivery surge is particularly intense.
Earlier this month, we reported that Musk told employees on a company-wide call that “‘this is the craziest month of deliveries Tesla (TSLA) will have. never “.
In the new email sent over the weekend, the CEO says it boils down to last week:
“This will be the most intense delivery week on record for Tesla. ”
Musk previously revealed that Tesla built numerous vehicles at the start of this quarter that were to be left with missing parts for some time due to supply chain issues.
Parts were added by service crews later, which helped push deliveries towards the end of the quarter.
In the email, the CEO also reiterated previous comments that delivery pushes should be more manageable in the future:
“I hope it will be much easier in the next quarter. ”
Musk said Tesla may let more deliveries go through next year, but the main difference between flattening delivery waves will be the Gigafactory Berlin, which will reduce the need to export vehicles from the past. Gigafactory Shanghai and Usine de Frémont.
It will both shorten transit times and increase production capacity for local demand throughout the quarter.
However, while Tesla is expected to begin production of the Model Y at Gigafactory Berlin next month, the production ramp is expected to take a year.
We probably won’t see a significant impact until next year.
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