Estimation question

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

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What this question tests

Estimation using supply and demand reasoning, breaking a wait time question into production rate and backlog size.

How to approach it

  1. State the assumption, an approximate global Model 3 production rate of roughly 350,000 to 400,000 units a year.
  2. Estimate the current reservation backlog, a few hundred thousand pending orders, stating it is a rough guess.
  3. Divide the backlog by the production allocated to new reservations, after accounting for existing demand, to get a wait time in months.
  4. Adjust for regional allocation, since US delivery may differ from other factories.
  5. State the final estimate as a range, for example two to six months, with the key assumption named.

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