Project Program Management
Tesla Motors 325,000 Model 3 Pre-orders – Analysis
14 de abr. de 2016
After days of seeing how the number of pre-orders increased significantly, today, I finally had the opportunity to review the video where Tesla revealed the upcoming Model 3 and decided that this could be a topic worth analyzing in order to understand more in detail how the number of orders for “325,000” cars could impact the car industry.
Pre-orders in History
Focusing on a number of premium brands like Ferrari, Lamborghini and others, I was not able to find any previous historical pre-order that came close to the number of pre-orders that Tesla have achieved. I had to move into another industry such as the Entertainment sector with the Sony PS4 games to get similar numbers. Higher numbers can be found in the smartphone Industry. The switch from Cars to Games helped me identify an important aspect for this review, which is the Target market.
Even though the Model 3 is cheaper than all the previous models, the price tag of $35,000 and being only an electric vehicle will limit the target customers. Current customers that preorder this vehicle are betting on switching to this electric car, ruling out any other option could be available in the market before the delivery date of this vehicle.
Now, when you analyze the type of customer Tesla targeted, you should only include premium customers that lately renewed cars taking advantage of low oil prices and will switch to electric or keep both options depending on how the oil market is performing at the time of delivery.
Car Battery packs
When you multiply 325,000 by the amount of batteries needed to run this car, the volume is an additional load that the Tesla lithium-ion Gigafactory will need to handle. From another view this load in combination with the batteries used in solar solutions will provide this plant the initial work expected for such a facility.
Replacement Parts & Car Maintenance
Planning to have 325,000 on the street will require having repair and maintenance parts available. Facilities to service vehicles in strategic locations to handle the increase. There are many car manufacturers that experienced sales increase and were not able to produce enough replacement parts to cover the demand.
During the video, Elon Musk mentioned that the delivery time for Model 3 should begin by the end of next year. The increase of expected pre-order numbers will affect the date provided previously, this could impact negatively on a customers’ expectations. When you try to put together mechanical parts, interior and exterior accessories not directly produced by Tesla and finally the enormous central console, it’s clear that an aggressive strategy will be a key player to meet the delivery dates. This is assuming all pre-orders make it to the end.
Is Tesla Motors currently creating the required financial reserves to produce 325,000 vehicles and keep servicing their existing customers, or it will require new investors or private financing?
This analysis was performed assuming 325,000 pre-orders as a real value. It also covered some areas were this value will make an impact, in this case, on a company like Tesla Motors.
In order to meet the expectations, Tesla will be forced to attract experienced workers from the car industry to help improve the current processes. Executives from premium car brands should be the main targets to sustain the quality and ramp the factory up to its required levels.