One of the things Tesla Motors Inc (NASDAQ:TSLA) bulls have been keeping tabs on to help with tracking production is the vehicle identification numbers (VINs) issued by the company. More than one bullish analyst has pointed to the posted numbers on Tesla’s forum as a reason to believe the automaker has produced more vehicles than expected. But of course using those numbers certainly has its problems, as Forbes contributor Chuck Jones notes in a recent post.
The problem with tracking Tesla’s VINs
The VIN tracking is done by University of Cincinnati professor Craig Froehle. Tesla Motors Inc (NASDAQ:TSLA) reported that it sold a little over 5,500 during the third quarter but produced approximately 7,150 vehicles. Most of those extra vehicles are loaner cars, vehicles for the new showrooms Tesla is opening and internal research and development vehicles. As a result, you can’t rely solely on VINs alone to guess sales or even the production rate.
Jones provides a number of variables which must be considered when looking at VINs. Aside from the cars which are produced but not sold for one of the reasons listed above, there is also a lag time between production, sales and the report that buyers have purchased the vehicles. This lag time increases for vehicles shipped to Europe, meaning that more of them are in transit. In addition, Europeans may not be reporting their VINs as frequently as owners in the U.S.
What can be gleaned from Tesla’s VINs
Nonetheless, Jones says there are some suggestions we can receive from viewing the VINs from Tesla Motors Inc (NASDAQ:TSLA)’s cars. The automaker said it is trying to increase production to keep up with demand, and Jones notes what sees as a possible production ramp in the middle of October. He said production climbed to about 725 vehicles a week and then fell to 580 later. On average, Tesla produced just 550 cars a week during the September quarter, however.
But what Jones sees is a pretty consistent increase in production, which is certainly good news for Tesla and its investors. The automaker guided to sell a little less than 6,000 vehicles during the December quarter, and Jones believes it will come in a little ahead of that guidance.
Can Tesla keep up with demand for future vehicles?
In spite of Tesla Motors Inc (NASDAQ:TSLA) managing to rather consistently ramp up production for the Model S, he remains concerned that the automaker will be able to continue ramping production after it adds the Model X crossover next year and then the Generation III car in 2016. He notes that battery supply continues to be a concern for Tesla.
Recently Tesla expanded its battery production deal with Panasonic, and there have been reports that the automaker is looking to add even more battery makers to its supply chain and possibly even open its own battery factory. But whatever the solution ends up being, the company has to figure it out quickly or risk falling further and further behind demand. Tesla may already be limiting the number of markets it is expanding into, so this battery supply problem will only get worse if the company doesn’t figure this out.
Shares of Tesla Motors Inc (NASDAQ:TSLA) declined more than 5% in midday trading.
