Elon Musk said that Tesla may stop taking orders on some models of its popular electric vehicles because of the long delivery timelines.
There’s currently a rush to order electric vehicles as the technology gains momentum – both naturally, as it becomes more mainstream, and in the short term, more directly through the gas price increase.
For Tesla, we previously reported that this has resulted in a significant increase in its order rate in several regions of the US. In March, this resulted in many Tesla models being sold out until 2023 in the US. That’s despite several price increases throughout Tesla’s entire lineup over the last two years.
Now Tesla is even considering stopping taking orders on some models. CEO Elon Musk said during an interview at the FT Future of Cars Conference:
Demand is now exceeding production to a ridiculous degree. We are actually probably going to limit or just stop taking orders for anything beyond a certain period of time because some of the timing (for delivery of new orders) is more than a year away.”
The comment comes as Tesla updated many delivery timelines for some of its most popular vehicles in the US. A new order of a base Model Y now shows a delivery timeline of February 2023–May 2023. More expensive versions of the vehicle, like the Model Y Performance, get a much faster delivery timeline of July to September 2022.
Over the last year, Tesla has also started to offer faster delivery timelines by adding some options on certain trims. For example, the base Model Y (Long Range AWD) gets a faster November 2022–February 2023 delivery timeline if you add the bigger 20-inch wheels, which cost an extra $2,000.
Model 3 is also still popular, but the delivery timelines are more reasonable than with Model Y. All trims of the Model 3 can get delivered by the end of the year in the US.
If Tesla stops taking orders on some trims of its vehicles, the base Model Y is likely going to be the first one to go.
Now you might think: What’s the advantage of not taking new orders? Don’t you just want as big of a backlog as possible?
Yes, but the delivery timelines are becoming long enough that people are now buying a vehicle that is probably going to be different by the time they get it. Tesla is always updating its vehicles, and if you are getting yours a year after ordering it, it is likely going to have several new features and changes.
Also, the price is likely going to change. Tesla is now delivering new Model Ys to people who ordered them last year for $5,000 to $10,000 cheaper than it is to buy one right now with a new order.
Elon Musk recently explained Tesla’s difficulties in adjusting pricing for vehicles that they are delivering six to twelve months from now, especially with rising costs of materials.
So while Tesla does want to have a significant backlog of orders, there comes a point where it becomes too difficult to manage.
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