Estimate when you will get a Tesla Model 3 if you make a reservation today.

Here's how I would approach this questions

1. Clarify and lay out the scope: 

Question is to calculate the wait time for a Tesla Model 3 (booking to delivery). Wait time in # of days or months. Does it matter which sub-model within Model 3? 

I am assuming any model 3 will have the same wait time, though in reality it can vary between standard or other models within Model 3. I will consider US market for this analysis

2. Equation

# of Model 3 booked per month / # of Model 3 produced per month 

Assumption - production rate and delivery time remains the same month over month (ex. delivery time is X months on any given day). Both of these can vary in reality based on supply chain, shipping delays, etc

3. Calculation

# of Tesla Model 3 booked per month

Determine how many cars are sold every month

Total US population : ~300M, # of households : ~100M (assuming 3x household)

Average age of a car : 10 years, implies 10M cars purchased every year per household. If every household has 2x cars on average, it is 20M cars per year or ~2M cars per month

Determine # of EV cars 

EV cars account for ~15% of total, thats 300,000 EV cars per month

Determine # of Tesla cars per month within EV

Assuming Tesla has 90% market share in EV in the consumer segment, thats 270,000 Tesla cars per month. 

Determine # of Model 3 

Tesla Model Distribution assumptions:

Model 3 is latest and price concious buyer can afford it - 40%

Model S is the sedan which is most popular in the segment - 30%

Model X gained popularity in the >5 seater segment but high cost - 20%

Model Y  is very new - assuming 10%

So # of Model 3 booked per month = 40% of 270,000 ~110,000 cars per month

 

# of Tesla Model 3 Produced per month

Tesla produces ~200K cars a month, 40% of that is ~80,000 Model 3 per month

Wait time in months = 110,000/80,000 = ~ 2 months 

There are a lot of assumptions in this calculation that must be validated with real stats. Ex. # of cars sold in US each year. That can be further segmented into price bands to find out how many cars are sold in the Model 3 price. Delivery and production times are assumed to be constant. The model must assume variability - delay in production due to supply chain issues, delivery delays due to macroecomonic conditions, etc.

As someone buying a new Tesla Model 3 in the USA:

• Suppose that 15M new vehicles are sold every year in the USA
• Sale of EVs are only about 5% of all new vehicles sales
• Tesla is the most popular EV brand, and makes up roughly 80% of the EV market
• Tesla Model 3 is the most popular model of the 4 models in Tesla's portfolio, let's assume it makes up 50% of all Tesla sales
• Tesla recently passed a benchmark of 1M new vehicles produced per year annually
• Let's assume 50% of all Teslas produced are delivered to the USA market

I'm going to look at # of sales/orders of Teslas per month/year and subtract the number of shipments to date from that to figure out the outstanding orders to be filled.

I'll also figure out the avg number of shipments arriving per month.

So let's take any city like NYC/London - 8 mil population. Let's figure out avg # of tesla orders/sales per year/month.

avg households is 2.5 -> 3.2 mil households.

car ownership is lower so maybe 75% of housholds have a car so thats - 2.4 mil cars. Avg car purchase timeline is 10 years so 240K cars sold every year.

Let's figure out how many of these would be tesla 3. Let's say sedans make up about 25% of all cars sold. And then we say 10% of that market is Teslas. so 240K x 25% x 10% = 6000 Tesla 3s sold per year.

Assume Tesla 3 has been available for the past 3 years and they started taking orders when it became available.

So we've had 18000 orders for tesla in the last three years.

 

Now let's look at order fill rate. So tesla cars are coming in from USA/China. Let's pick China for London and say they're coming by ship freight. I'd say we're only getting 1 shipment per month. And how many cars are held in a shipment. I don't think Tesla would have a full ship leased for themselves, so I don't think they'd be sending 1000s of cars a month. I'm going to say 400 cars are shipped per month by Tesla.

So 12*400 = 4800 per year and assume the shipment rate has remained the same since production began (3 years ago). So we've had 14400 cars (round up to 15000 cars shipped).

Backlog is 18000 - 15000 = 3000 cars/orders.

at 400 cars per month - if I ordered now I'd get my car in 3000/400 = 7.5 months.