- Tesla (NASDAQ:TSLA) buyers usually have 10 days to take delivery of their car once it's finished at the factory.
- Usually, that's not an issue — unless that window overlaps with the end of a quarterly deadline for Tesla.
- In the company's rush to deliver cars by the end of the period, some customers get "unmatched" in favor of someone who can take the car sooner.
- Tesla on Wednesday reported its biggest sales drop ever, with the number of quarterly deliveries sinking 31% since Q4.
As Tesla rushed to deliver cars before the end of the quarter on Sunday, some buyers’ cars were offered to other customers who could take delivery of their vehicles sooner than the intended recipient.
Getting the keys into a buyer’s hands usually isn’t an issue, especially since buyers are typically eager to take delivery of their cars once ready, but that's put to the test at the end of the quarter as tight deadlines lead to high pressure inside the company.
For a small number of customers, Tesla's 10-day delivery period, as designated in the contract, sometimes overlaps with the end of the quarter. When that happens, customers are told their car may be given to another buyer.
Current and former Tesla employees, speaking to Business Insider on the condition of anonymity because they are not authorized to discuss internal practices, say that the practice — known as VIN "unmatching" — is a regular part of life at Tesla. The issue first came to light in a viral Reddit thread last week.
"Generally speaking, as soon as the car arrives, we schedule the delivery," one current employee said. "Most people are okay with that, but the ones who aren’t, for whatever reasons, are unmatched.”
"The sole focus at the end of the quarter is to check every car 'delivered' by whatever means necessary," the employee said.
To be sure, customers will still receive the same model they purchase, though the VIN may not be the one originally assigned to them in the sales process. In some cases, the current employee said, it could also result in a delay as customers are re-matched.
A Tesla spokesperson declined to comment.
Other current and former employees confirmed the practice is typical at the ends of quarters, when Tesla is notorious for all-hands-on-deck approaches to get cars out the door and into customer driveways. In emails seen by Business Insider at the end of March, CEO Elon Musk told all employees that their "primary priority" should be deliveries.
"This is the biggest wave in Tesla's history,” Musk said in the email. "But it is primarily a function of our first delivery of mass manufactured cars on two continents simultaneously, and will not be repeated in subsequent quarters."
When all was said and done, Tesla on Wednesday posted one its largest quarterly declines in company history, with deliveries falling 34% from the previous quarter.
"We had only delivered half of the entire quarter's numbers by March 21, ten days before end of quarter," Tesla said in a press release Wednesday night. "This caused a large number of vehicle deliveries to shift to the second quarter."
On Thursday, Elon Musk's lawyers will head to federal court in New York for a hearing in the billionaire's contempt of court case against the Securities and Exchange Commission.
More from Tesla's first-quarter delivery struggle:
- Tesla says it delivered about 63,000 vehicles in the first quarter of 2019, a 31% drop from Q4 2018
- Tesla is plunging after first-quarter deliveries came up short
- Tesla is planning an exclusive event to show off its self-driving car tech — but Americans still have major fears about autonomy
- Elon Musk and the SEC are in a fierce battle over one of Musk's tweets — here's what you need to know about their dispute