Merrill Lynch: Tesla Sitting On 3K Cars Despite Alleged Scarcity

Cameron Aubernon
by Cameron Aubernon

If you’re still waiting for your Model S to arrive in your driveway, you might not be too pleased to learn there could be 3,000 cars hiding in the back room, thanks to one man seeking knowledge about Tesla’s famed scarcity.

The Daily Kanban reports Merrill Lynch research analyst John Lovallo found that while the hype held up for the Model X — for obvious reasons — the same couldn’t be said for the Model S. Despite Tesla’s claim that they sold every car they had in Q3 2014 — even the ones in the showrooms — Lovallo saw a different story with the finished goods inventory. In short: Some 3,000 vehicles were either in transit or in a warehouse.

Merrill Lynch — who told its clients in its research note about Tesla that the automaker’s stock will remain labelled “underperform” for the foreseeable future — also noted that Tesla is facing difficulties in penetrating the Chinese market, “coupled with seemingly tepid European demand for the Model S.” Despite the Chinese government creating a separate pool for EV license plates, 70 percent of plate winners failed to cash-in by the end of last month, and even if everything worked out, lower-cost EVs like the Nissan-Venucia r30 and the 20-some models set to leave Volkswagen’s factories would hardly leave any money for a higher-end EV like those sold by Tesla.

The note concludes by pointing out that the automaker barely makes money from selling regulatory credits to other automakers, while not making a dime off of its vehicles, the latter an issue that “could ultimately prove to be the biggest risk for the company and the pure electric vehicle market at large.”

Cameron Aubernon
Cameron Aubernon

Seattle-based writer, blogger, and photographer for many a publication. Born in Louisville. Raised in Kansas. Where I lay my head is home.

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  • NN NN on Nov 14, 2014

    isn't it possible that those 3k cars could be waiting to be loaded onto a ship for export (they don't do that one car at a time, folks)? Most of what I've read has indicated that the Chinese problem is that they haven't gotten enough cars over there yet.

    • See 1 previous
    • 05lgt 05lgt on Nov 14, 2014

      How would a freighter worth of S's headed to China look in this analysis? It's a B$ number with no supporting information to relate it to. If it's more than normal for Tesla but there's a big shipment in transit to fulfil those mentioned Chinese orders, or if it's a normal number for the current sales rate, or a disasterous overproduction... It's all left to the readers imagination. ML would be burning my trust with this B$, but there's nothing left to burn.

  • Nickoo Nickoo on Nov 14, 2014

    I'm short tsla so good hit piece. In reality its probably a non story. I just don't think Tesla is that great as a business right now. The car is awesome when compared to other electric cars on the market, compared to conventional cars, there are a lot of downsides, namely price point. The model 3 probably won't get here until 2019, that's a long time to try to hold on when competitors are about to hit back in a big way. Voltec in a real full sized luxury mobile will be very bad news, so will next gen leaf, sonic ev, etc.

    • See 1 previous
    • Mcs Mcs on Nov 14, 2014

      >> Voltec in a real full sized luxury mobile will be very bad news, Voltec is a PHEV architecture and if you look at EV sales numbers, that's not what EV buyers are purchasing. 1,439 Volts vs. 2,589 Leafs in Oct 14 for example. If pure EV range increases and the number of Level 3 DC chargers keeps increasing, there will be even less people that will want to haul around a lump of metal they don't need. The biggest threat to Tesla would be something like a large full electric Infiniti or if BMW adds a luxury sedan to it's i Series. Working in Teslas favor are some of Nissans dysfunctional dealers (doing stupid crap like displaying used ICE cars in charging spaces and ICEing their own customers) and BMW and GM's adoption of the almost non-existant SAE DC fast charging standard - the betamax of DC fast chargers.

  • AJ AJ on Nov 16, 2014

    A mall in my town has a Tesla store setup. I walked in recently and was looking at a large picture on a wall of the drivetrain, as I thought it was interesting. A salesman walked up to me and asked if I was an engineer, which I'm not I replied. He told me that the only people that pay attention to that picture are engineers, which I thought was strange being that it's the technology that makes the car interesting, at least to me.