"There's so much inventory here, it's crazy."When Tesla finally met its Model 3 production run rate target, astute investors and analysts pointed out the use of the word "factory gated" in the company's press release: “Not only did we factory gate 5000 Model 3’s, but we also achieved the S & X production target for a combined 7000 vehicle week!” Musk wrote in an email to his staff that week.
It was a term that Tesla hadn’t used before.
Now, thanks to a couple of sleuths on Twitter, we may have just found out what the term means. Twitter Tesla sleuth @ISpyTSLA, with the help of others, has been trying to figure out exactly where all these vehicles are winding up. @ISpyTSLA found that it appears that "thousands" of vehicles are being stored "in a field" 500 E Louise Ave, Lathrop, CA 95330.
We found the cars.— Value Dissenter (@ValueDissenter) July 19, 2018
Amazing Twitter sluething.
They are sitting on a field in Lathrop, CA
Photos/Livestream from @IspyTsla to follow.$tsla
Thousands of $tsla Model 3s are at this address:— Value Dissenter (@ValueDissenter) July 19, 2018
500 E Louise Ave, Lathrop, CA 95330
A google map visual of the address:
According to public records, the property was also available for lease just 6 months ago, suggesting that Tesla leased it recently. Why?
Perhaps as a place to temporarily dump cars that should be 'off the books' or as some said,' "There's so much inventory here, it's crazy."
There is so much inventory here it’s crazy— IspyTSLA (@IspyTsla) July 19, 2018
The accompanying video appears to show "thousands" of Tesla vehicles just rusting in the open air under the scorching California sun.It’s like a sea of Model Ss, 3s & Xs.— IspyTSLA (@IspyTsla) July 19, 2018
Cars are coming in but not coming out?
noted that "there's no real activity in the inventory lot" before noting that "some cars are coming out".
The reaction from Twitter was underwhelming.Well some cars are coming out pic.twitter.com/0YrrQDeBNq— IspyTSLA (@IspyTsla) July 19, 2018
Great News Lemmings! All of our 5K Burst week cars are sitting in a scrap heap. This is GREAT news, we are going to make submarines out of them. Elon $TSLA— William B. Smith (@blainefundlp) July 19, 2018
But why stash the cars there? Is it to optimize net working capital and give investors - and auditors - the impression of more liquidity than is actually available?$TSLA is hiding Model 3s in an industrial which is apparently somewhere in CA. Why not deliver them? Demand issues? https://t.co/H9lCePgOSG— Salt_Nole (@Salt_Nole) July 19, 2018
Surely this will, or should, be one of the "boring" questions asked on the company's conference, if PricewaterhouseCoopers doesn't ask first.
Meanwhile, Tesla already had to fend off a downgrade from Needham this morning, who warned that Model 3 refunds were moving faster than deposits, something we documented here over a month ago.
"Based on our checks, refunds are outpacing deposits as cancellations accelerate," wrote analyst Rajvindra Gill in the note Thursday. "The reasons are varied: extended wait times, the expiration of the $7,500 credit, and unavailability of the $35k base model."This morning Tesla refuted this, however, with the discovery of this new lot Tesla's PR spin job for today may only be getting started.
"In August '17, TSLA cited a refund rate of 12%. Almost a year later, we believe it has doubled and outpaced deposits. Model 3 wait times are currently 4-12 months and with base model not available until mid-2019, consumers could wait until 2020," Gill added.