Lower Tesla order backlog adds to worries over unsold inventory

Not so long ago we reported on Tesla-s unsold inventory to grow to the highest level ever recorded by the company. At the time of that report, Tesla had just over 9,500 vehicles in stock which isn’t a huge number but it is an unfamiliar ground for the company that only last year had nearly half a million customers waiting for their cars.

Thanks to Troy Teslike, we have a full picture now - on one side we have the unsold inventory, on the other we have the diminishing order backlog and now we can try and make some sense out of that. As of April 15, Tesla has 72,000 orders still waiting to be fulfilled and its 30,000 orders less than it had at the end of March. Is that good or bad?

Orders being delivered is never a bad thing but if the backlog keeps going down it means one thing - new customers aren’t buying. Tesla keeps increasing its production rate and its Gigafactories keep hitting new targets which means more cars are coming to the market. At the current production rate, Tesla has a 22-day backlog and if the sales don’t pick up, in about 3 weeks the unsold inventory will start piling up.

Hi everybody. Based on my calculation, Tesla's order backlog was 72K units on Apr 15, down from 102K on Mar 31.

I've just posted a new update on Patreon. It'll be on Twitter in 2 weeks. Patreon allows me to continue spending a lot of time on this. Thanks https://t.co/7jeWthBknx pic.twitter.com/Urd6jkRcfg

— Troy Teslike (@TroyTeslike) May 1, 2023

Now we are starting to see the reasons for Tesla's recent price cuts - after the final push in December last year, the company ended up with a backlog of just 74,000 orders. Realizing the reproduction was ramping up, Tesla turned to price cuts in the hope to shift the growing inventory. It helped a little as we can see the order backlog growing in February and March to just over 100,000 orders. Unfortunately, the success was short-lived, Tesla kept messing about with prices and customers simply put the brakes on.

While the short waiting times are great for car buyers, for manufacturers they mean trouble. It means there is not enough demand to keep manufacturing at full pace. Each company has a number based on the production output and for Tesla, that number is between 4 and 8 weeks. If the waiting times fall within that period, it means the production is sustainable. Now we can see why 22 days mean trouble.

Troy Teslike posted a very informative table that shows only Tesla Model 3 and Model Y manufactured in Fremont, Model S, and Model X from Fremont, Model Y from Giga Berlin, and Model Y from Shanghai have waiting times over 45 days. The rest of Tesla’s lineup is in trouble - Model 3 Performance and Model Y Performance from Shanghai have a waiting time of only 11 days.

Here is a detailed table as of Apr 15. It shows my calculation for the order backlog based on the wait times for new orders shown on Tesla's website multiplied by the daily production rate of each trim level.

The red cells show wait times that are too short. pic.twitter.com/VgRu2Nznro

— Troy Teslike (@TroyTeslike) May 1, 2023

Is Tesla in trouble then? Very unlikely, the company will adjust the pricing - yet again - and will probably shift the production to those few models with longer waiting times. Those customers who have been paying attention and waiting for the prices to drop even further - may be in luck.

Tesla putting prices back up would be a gamble but it would force some people to jump in and buy one of its models. It would fix the profits for a short time but with Elon Musk signaling he’s prepared to make no profit on cars in preparation for the eventual FSD launch means only one thing - the prices will go down yet again.

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