Tesla: 63,000 cancelled Model 3 orders in past year but
08-04-17, 10:25 AM
#1
Tesla: 63,000 cancelled Model 3 orders in past year but
About 63,000 people have canceled their Tesla Model 3 orders in the past year, Tesla CEO Elon Musk said during the electric-car company's quarterly earnings call on Wednesday.
Total orders for the entry-level electric luxury sedan dropped to 455,000 from about 518,000, Musk said, but he suggested the cancellations were merely a drop in the bucket because the company had averaged about 1,800 new Model 3 reservations a day since Friday, when the first 30 cars were handed over to Tesla employees.
Customer deliveries will begin this fall.
Musk took the cancellations in stride, saying that Tesla could drive up the Model 3's reservation numbers with little effort but that doing so wouldn't serve the company or its growing legion of potential customers.
"It's like if you're a restaurant and you're serving hamburgers and there's like an hour-and-a-half wait for hamburgers do you really want to encourage more people to order more hamburgers?" Musk said. People who put down a deposit for a Model 3 at this point most likely won't see their cars until the end of 2018, according to most estimates.
Tesla aims to produce 20,000 Model 3 cars a month by December, a journey Musk bluntly described as "production hell" during the launch event at the Tesla factory in Fremont, California, last week.
http://www.businessinsider.com/tesla...ow-many-2017-8
Total orders for the entry-level electric luxury sedan dropped to 455,000 from about 518,000, Musk said, but he suggested the cancellations were merely a drop in the bucket because the company had averaged about 1,800 new Model 3 reservations a day since Friday, when the first 30 cars were handed over to Tesla employees.
Customer deliveries will begin this fall.
Musk took the cancellations in stride, saying that Tesla could drive up the Model 3's reservation numbers with little effort but that doing so wouldn't serve the company or its growing legion of potential customers.
"It's like if you're a restaurant and you're serving hamburgers and there's like an hour-and-a-half wait for hamburgers do you really want to encourage more people to order more hamburgers?" Musk said. People who put down a deposit for a Model 3 at this point most likely won't see their cars until the end of 2018, according to most estimates.
Tesla aims to produce 20,000 Model 3 cars a month by December, a journey Musk bluntly described as "production hell" during the launch event at the Tesla factory in Fremont, California, last week.
http://www.businessinsider.com/tesla...ow-many-2017-8
08-04-17, 11:08 AM
#3
Americans are about immediate gratification so the wait alone would create drops.
Another huge point in my mind is that doofus Musk said no AWD for the model 3 to simplify production. Have a look at BMW 3 series cars in New England, NY tristate area or Chicagoland/Upper Midwest and tell me how many are RWD only outside of the M cars Elon.
Another huge point in my mind is that doofus Musk said no AWD for the model 3 to simplify production. Have a look at BMW 3 series cars in New England, NY tristate area or Chicagoland/Upper Midwest and tell me how many are RWD only outside of the M cars Elon.
08-04-17, 11:46 AM
#6
Super Moderator
Back OT, a 12% breakage rate doesn't really surprise me, given that everyone knew going into it that the deposit was 100% refundable. Not a big risk to ensure your place in line before you've decided whether or not you actually want one. They'll still sell plenty. One of our VPs ordered two the week they were announced, then about two weeks ago went and bought a Model S (also RWD) to jump the line.
08-07-17, 08:18 AM
#7
Lead Lap
I think it was expected that there would be a decent amount of cancellations. However, the hype surrounding the Model 3 also directs attention to Tesla in general and other offerings, particularly the model S.
All the news about cancellations just adds more to the Tesla hype. Anyone who wants to get into a Tesla now can find a lot of great deals on certified used RWD Model S cars out there in the $40-$45k range and free supercharging. If i were in the market for a sedan right now, i would definitely consider a certified Model S since the price is comparable to a new Model 3. My co-worker has said his next car will either be a CPO Model S or another CPO german car, just depends on the charging infrastructure in the next few years...Interesting to see how folks are comparing cars/cross-shopping.
As they begin to deliver more and more of the Model 3, I think more people will reserve them or buy a Model S and the cancellation rate will almost be irrelevant.
All the news about cancellations just adds more to the Tesla hype. Anyone who wants to get into a Tesla now can find a lot of great deals on certified used RWD Model S cars out there in the $40-$45k range and free supercharging. If i were in the market for a sedan right now, i would definitely consider a certified Model S since the price is comparable to a new Model 3. My co-worker has said his next car will either be a CPO Model S or another CPO german car, just depends on the charging infrastructure in the next few years...Interesting to see how folks are comparing cars/cross-shopping.
As they begin to deliver more and more of the Model 3, I think more people will reserve them or buy a Model S and the cancellation rate will almost be irrelevant.
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08-07-17, 07:14 PM
#8
Lexus Champion
Originally Posted by AJLex19
Anyone who wants to get into a Tesla now can find a lot of great deals on certified used RWD Model S cars out there in the $40-$45k range and free supercharging. If i were in the market for a sedan right now, i would definitely consider a certified Model S since the price is comparable to a new Model 3.
08-07-17, 09:47 PM
#10
No wonder that Model dumped him...
08-08-17, 04:03 PM
#11
Fascinating story; Musk loses cash hand-over-fist and people climb over each other to buy the stock, The company now has a book value higher than well-established highly-regarded competitors who have demonstrated staying power for decades.
Good Luck to Musk and Tesla. Me, I wouldn't buy a share of stock in the company (or a bond) unless I wanted something to talk about at cocktail parties.
Good Luck to Musk and Tesla. Me, I wouldn't buy a share of stock in the company (or a bond) unless I wanted something to talk about at cocktail parties.
08-08-17, 04:23 PM
#12
Lexus Fanatic
Then you don't like making money. You could have bought in at ~$30 and made a fortune or even if you were late to the party you'd have doubled your money.
08-08-17, 04:48 PM
#13
Lexus Champion
Originally Posted by Lexus2000
Then you don't like making money. You could have bought in at ~$30 and made a fortune or even if you were late to the party you'd have doubled your money.
But he was worth a ridiculous amount of money before he even turned 30. Founded Zip2 and spun off into x.com and into Paypal before they ousted him. He got $165M just from the Ebay purchase of Paypal. That's the whole thing. The capital markets seem to be willing to gamble on him.
08-08-17, 05:20 PM
#14
Lexus Fanatic
I was going to start another thread with this article, but, on second thought, figured it was better to simply add it onto this thread. Elon Musk is now issuing bonds to try and finance the Model-3 construction. My guess is that he will have to pay some pretty good interest to attract investors....hence the junk-bond classification. 
https://www.reuters.com/article/us-t...-idUSKBN1AN13I
Tesla seeks $1.5 billion junk bond issue to fund Model 3 production
DETROIT (Reuters) - Tesla Inc (TSLA.O) said on Monday it would raise about $1.5 billion through its first-ever offering of junk bonds as the U.S. luxury electric car maker seeks fresh sources of cash to ramp up production of its new Model 3 sedan.
The move to issue junk bonds - lower-quality investments that offer higher yields - represents a bet by Tesla Chief Executive Elon Musk that bond investors will be as hungry as stock investors to back the company on expectations that its Model 3 will be a hit.
Tesla shares are up 67 percent this year, pushing the company's market value to about $60 billion, above that of top U.S. automakers General Motors Co (GM.N) and Ford Motor Co (F.N), even though Tesla has yet to make an annual profit.
"Bond investors, who typically don't love companies that don't make money, will be far more forgiving when it comes to Tesla," said bond expert Robbie Goffin, managing director of FTI Consulting, citing the company's stellar stock market value.
Tesla was to start pitching potential investors on Monday, IFR reported, citing lead bankers on the deal.
So far, Tesla has been raising money to pay its bills with a combination of equity offerings and convertible bonds, which eventually convert into shares. In March, the company raised $1.4 billion through a convertible debt offering.
Following the announcement, Standard & Poor's reaffirmed its negative outlook for the automaker and assigned a "B-" rating for the bond issue - deep into junk credit territory. S&P also maintained its "B-" long-term corporate credit rating on Tesla.
"We could lower our ratings on Tesla if execution issues related to the Model 3 launch later this year or the ongoing expansion of its Models S and X production lead to significant cost overruns," S&P said in a statement on the bonds.
Moody's assigned a junk "B3" rating to the bond issue and said the company's rating outlook was stable.
The rating agency said the overall company's "B2" rating was supported by the fact that if Tesla ends up in serious financial trouble, its brand name, products and physical assets would be of "considerable value" to other automakers.
The automaker's debt load increased significantly last year when it bought solar panel maker SolarCity.
CFRA equity analyst Efraim Levy said the bonds provide Tesla with funds "at least into mid-2018."
https://www.reuters.com/article/us-t...-idUSKBN1AN13I
Tesla seeks $1.5 billion junk bond issue to fund Model 3 production
DETROIT (Reuters) - Tesla Inc (TSLA.O) said on Monday it would raise about $1.5 billion through its first-ever offering of junk bonds as the U.S. luxury electric car maker seeks fresh sources of cash to ramp up production of its new Model 3 sedan.
The move to issue junk bonds - lower-quality investments that offer higher yields - represents a bet by Tesla Chief Executive Elon Musk that bond investors will be as hungry as stock investors to back the company on expectations that its Model 3 will be a hit.
Tesla shares are up 67 percent this year, pushing the company's market value to about $60 billion, above that of top U.S. automakers General Motors Co (GM.N) and Ford Motor Co (F.N), even though Tesla has yet to make an annual profit.
"Bond investors, who typically don't love companies that don't make money, will be far more forgiving when it comes to Tesla," said bond expert Robbie Goffin, managing director of FTI Consulting, citing the company's stellar stock market value.
Tesla was to start pitching potential investors on Monday, IFR reported, citing lead bankers on the deal.
So far, Tesla has been raising money to pay its bills with a combination of equity offerings and convertible bonds, which eventually convert into shares. In March, the company raised $1.4 billion through a convertible debt offering.
Following the announcement, Standard & Poor's reaffirmed its negative outlook for the automaker and assigned a "B-" rating for the bond issue - deep into junk credit territory. S&P also maintained its "B-" long-term corporate credit rating on Tesla.
"We could lower our ratings on Tesla if execution issues related to the Model 3 launch later this year or the ongoing expansion of its Models S and X production lead to significant cost overruns," S&P said in a statement on the bonds.
Moody's assigned a junk "B3" rating to the bond issue and said the company's rating outlook was stable.
The rating agency said the overall company's "B2" rating was supported by the fact that if Tesla ends up in serious financial trouble, its brand name, products and physical assets would be of "considerable value" to other automakers.
The automaker's debt load increased significantly last year when it bought solar panel maker SolarCity.
CFRA equity analyst Efraim Levy said the bonds provide Tesla with funds "at least into mid-2018."
08-09-17, 09:59 PM
#15
Could it be that potential buyers saw pictures and it is not what they expected. I do not what steering wheel with an iPad.