Tinker71

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I think there are multiple tiers to the CT conversion rate.

Some people desperately want and really like the CT and will do anything to get one (like many of us fanboys here), some ordered multiple to keep, some are just Tesla product fans and got one to be in the "I ordered a CT crowd", others ordered one or more to flip, others ordered only just in case to avoid the cue, others ordered but don't know how to afford it yet and so on.

On top of that the waiting game does two things. It adds orders and more conversions as more people become aware of the CT and start to like it and want it more, it allows many to save up to buy one, if not 2.

The ones cancelling their orders are the ones who don't want to wait and get something else that is available now (probably a MY or Ice truck seeing EVs options are thin atm) or need the $100 back for groceries, meaning they weren't really orders that would convert anyway. Then of course theres the anti-EM buyout twitter crowd now...

But of all of those I expect the most lost conversions will not be now before delivery, but rather when the CT has to be paid for. Especially if theres a price hike or only the top models are available.

From a manufacturers perspective though, the only relevant data is can you make the vehicle profitably and will your order books fill faster than you can make them?

Currently, most of us are buying CTs from a few pictures and video from a screen, without ever seeing a CT. Wait until they hit the road.
As you said I think many people will hold on to their $100 deposit to see what it is actually worth.
Maybe the people that ordered 10 on the robotaxi principle will get a refund because they need the deposit cash back and don't see full level 5 across the country in a year, but most will hold their reservation a little longer.

Tesla wants to know how solid the pre-reservation list as much as we do. I wonder if they are running credit checks on us? , they may also be looking at SM meta data to come up with a internal take estimate. I would love to see their logic and math.

 

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As you said I think many people will hold on to their $100 deposit to see what it is actually worth.
Maybe the people that ordered 10 on the robotaxi principle will get a refund because they need the deposit cash back and don't see full level 5 across the country in a year, but most will hold their reservation a little longer.

Tesla wants to know how solid the pre-reservation list as much as we do. I wonder if they are running credit checks on us? , they may also be looking at SM meta data to come up with a internal take estimate. I would love to see their logic and math.
I'm not sure they are worried about how many will convert to actual sales at all.

This is because, at least initially, they will be unable to meet the pre-order demand with manufacturing ramping up anyway, and by the time they meet it, the CT's on the road from pre-sales, will more than double demand, meaning once again sales will be limited by manufacturing, but not by lack of demand.
 
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As you said I think many people will hold on to their $100 deposit to see what it is actually worth.
Maybe the people that ordered 10 on the robotaxi principle will get a refund because they need the deposit cash back and don't see full level 5 across the country in a year, but most will hold their reservation a little longer.

Tesla wants to know how solid the pre-reservation list as much as we do. I wonder if they are running credit checks on us? , they may also be looking at SM meta data to come up with a internal take estimate. I would love to see their logic and math.
Musk didn’t hesitate for a second when asked if Tesla was worried about losing market share due to the delay. It was an instant “No”. He is extremely confident what they deliver will sell well. That tells me the value is still there.

If they deliver that value/ bang for the buck they shared at launch, sales are going to be just fine regardless of the take rate as new orders fill in the backlog. (Even if it’s reasonably inflation adjusted)

If you assume 80% of orders drop, Tesla still has more than 200k Cybertruck orders to keep them busy for 18 months. By then they will either have a pocket full of new orders or be rebooting the program.
 
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Cybertruck is talked about at 59:30......
And I think the first couple tweets I posted sum it up.

A fairly sparse interview for Cybertruck fans. I did enjoy the section with him and Straubel talking together. Perhaps the best part of the interview.
 

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Musk didn’t hesitate for a second when asked if Tesla was worried about losing market share due to the delay. It was an instant “No”. He is extremely confident what they deliver will sell well. That tells me the value is still there.

If they deliver that value/ bang for the buck they shared at launch, sales are going to be just fine regardless of the take rate as new orders fill in the backlog. (Even if it’s reasonably inflation adjusted)

If you assume 80% of orders drop, Tesla still has more than 200k Cybertruck orders to keep them busy for 18 months. By then they will either have a pocket full of new orders or be rebooting the program.
I still think conversion rate scenarios are important for Tesla to know. They have a hard decision to make when determining pricing for the next 3 years. They might upset a lot of reservation holders or stockholders. 4WS and Quad motors and build order are huge wildcards and give Tesla more wiggle room than Rivian.

To beat a dead horse. Tesla wants to claim a huge chuck of the light truck market which include new EV and ICE offerings. They need a compelling price and performance differential to get some of the diehards to switch loyalty to the big 3 and ICE in general. This gives me the best hope that price escalation will be reasonable and acceptable for most.

Their pricing will have a huge impact to future demand and market penetration. Ultimately they need to gage the demand for 2026 deliveries and beyond in order to plan. The further we are away the harder this is.
 


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(Text of Tweet) Elon Musk on Cybertruck and if Tesla will lose potential truck market share by launching later than rivals: No; We have more orders for Cybertruck than we could possibly fulfill for the first 3 years of production.



What surprises me about this Tweet Is the fact that he says “3 years”. Given a production rate of 250k vehicles/ year you would think he would say 5 years here. Perhaps a hint that they are targeting far more than the 250k units he’s said publicly. Something I’ve suspected for a while.
You are over thinking it. The statement would be true if they only made 5 trucks in 3 years. There are more orders than 5 trucks in 3 years. Or lets say they do think there are 2M orders and they can only make 100k per year. Then again the statement is true. There are more orders than they can fulfill.
 

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I still think conversion rate scenarios are important for Tesla to know. They have a hard decision to make when determining pricing for the next 3 years. They might upset a lot of reservation holders or stockholders. 4WS and Quad motors and build order are huge wildcards and give Tesla more wiggle room than Rivian.

To beat a dead horse. Tesla wants to claim a huge chuck of the light truck market which include new EV and ICE offerings. They need a compelling price and performance differential to get some of the diehards to switch loyalty to the big 3 and ICE in general. This gives me the best hope that price escalation will be reasonable and acceptable for most.

Their pricing will have a huge impact to future demand and market penetration. Ultimately they need to gage the demand for 2026 deliveries and beyond in order to plan. The further we are away the harder this is.
If Tesla cares so much about the truck market why does it seem like their last priority right now.
 

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If Tesla cares so much about the truck market why does it seem like their last priority right now.
Because they also have more cars and suv/uat's backlogged as well and those can be ramped up far quicker. The more cash flow they have coming in, the more cash they can use to tackle CT once that begins to ramp up. Cash flow for the cars can be realize at least a full year (maybe two) before CT cash flow starts to trickle in.
 

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Because they also have more cars and suv/uat's backlogged as well and those can be ramped up far quicker. The more cash flow they have coming in, the more cash they can use to tackle CT once that begins to ramp up. Cash flow for the cars can be realize at least a full year (maybe two) before CT cash flow starts to trickle in.
Tesla isn't cash constrained.
 
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I still think conversion rate scenarios are important for Tesla to know. They have a hard decision to make when determining pricing for the next 3 years. They might upset a lot of reservation holders or stockholders. 4WS and Quad motors and build order are huge wildcards and give Tesla more wiggle room than Rivian.

To beat a dead horse. Tesla wants to claim a huge chuck of the light truck market which include new EV and ICE offerings. They need a compelling price and performance differential to get some of the diehards to switch loyalty to the big 3 and ICE in general. This gives me the best hope that price escalation will be reasonable and acceptable for most.

Their pricing will have a huge impact to future demand and market penetration. Ultimately they need to gage the demand for 2026 deliveries and beyond in order to plan. The further we are away the harder this is.
If you assume there are going to be huge adjustments to pricing the existing pre-order roll is worthless. If you assume they will adjust prices somewhat in line with inflation or preserve them entirely, conversion won’t be a problem.
 


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You are over thinking it. The statement would be true if they only made 5 trucks in 3 years. There are more orders than 5 trucks in 3 years. Or lets say they do think there are 2M orders and they can only make 100k per year. Then again the statement is true. There are more orders than they can fulfill.
I just thought it was peculiar that he picked “3 years”. You are of course right. But it’s an oddly specific number.
 
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If Tesla cares so much about the truck market why does it seem like their last priority right now.
They can’t put the cart before the horse. Doesn’t matter how badly they want to build the Cybertruck, it has dependencies and until those are checked off they can’t move forward with the truck.

Because they also have more cars and suv/uat's backlogged as well and those can be ramped up far quicker. The more cash flow they have coming in, the more cash they can use to tackle CT once that begins to ramp up. Cash flow for the cars can be realize at least a full year (maybe two) before CT cash flow starts to trickle in.
As of the last earnings call, Tesla had retired all but a tiny amount of debt and has $18b cash plus their $2b bitcoin reserves.

Cash is not the problem.
 

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It was an instant “No”.
My read on that moment differs.

EM’s response was exceptionally different; in stark contrast to the thoughtful, eye-rolling, extemporaneous answers provided throughout.

His response, tenor and cadence, reflected uncertainty. In juxtaposition to his textual answer, it created a thought bubble cartoon of a boy trying to put his finger in a dike.
 

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(Text of Tweet) Elon Musk on Cybertruck and if Tesla will lose potential truck market share by launching later than rivals: No; We have more orders for Cybertruck than we could possibly fulfill for the first 3 years of production.



What surprises me about this Tweet Is the fact that he says “3 years”. Given a production rate of 250k vehicles/ year you would think he would say 5 years here. Perhaps a hint that they are targeting far more than the 250k units he’s said publicly. Something I’ve suspected for a while.
It is a stretch to take his 3 year statement as more than what it is. Maybe he didn't want to frighten people. Maybe he doesn't think the media can understand numbers greater than 3 or timelines longer than 3 years. Maybe he doesn't want to make predictions that far out since maybe there WILL be more people that relinquish their reservations. Who knows why he ever says anything? WE know that there are plenty of orders, and even if a lot of people jump ship they should still have more than enough that stay the course for the first 3 years of production.
 

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Tesla isn't cash constrained.
Oh I understand, but cash on hand is still a good thing to have and abundance of especially if they are wanted more Giga Factory's in the near future. Doesn't hurt the stock price either.

 

 
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