When Kyle Field and I were waiting in line in Santa Monica to reserve 4 Tesla Model 3s on what I’ll call “Triple Threat Day,” and also interviewing people for a few hours beforehand, a few things became clear: 1) a lot of people were in line because they were hoping to take advantage of the $7,500 US federal tax credit before Tesla hit its quota, 2) a lot of people were in line because they wanted to get their Model 3 in a timely fashion, not in 3 years (duh), and 3) some people were counting on Tesla Model 3 production to be late so that they’d have time to scrounge up the money for a Model 3, or for the most options their overly excited fingers could click.
Reservations flew past 100,000 before the car was even shown. Within a week, they had gone past 300,000. And within 2 weeks, they were approaching 400,000! If you’ve ever seen the pageviews of an article that goes wild/viral on Facebook or something (I know, this example is squarely from my work), you know how a story rises in a crazy-fast way, spreads from people sharing/word of mouth, and then all of a sudden starts rolling down the hill of fewer and fewer views. In other words, a huge splash doesn’t last for long.
Tesla’s Model 3 splash was insane, and Tesla will surely make some more splashes before the Model 3 is delivered to the first customer (unveiling part #2, for example). But the initial splash is basically over. Also, as people came to their senses, some decided to cancel reservations (I’d assume 2nd reservations, for the most part) either because they feared it would take too long to get one of the highly coveted all-electric vehicles, they needed their $1,000 back, their wives said, “No way! Not until you take me to the Seychelles!,” or whatever*. We have been curious what that total number is, and now, Tesla has kindly told us. 😀
Of course, Tesla didn’t drop CleanTechnica a line on this matter. Rather, it made an SEC filing to raise money to ramp up production capacity for the Model 3, and in that filing, it revealed some key details. Here are the ones I think will interest you:
- Tesla had reservations for ~373,000 Model 3 customers by May 15, 2016, following…
- ~8,000 customer cancellations, and…
- ~4,200 cancellations that Tesla made “on the belief that they could have been duplicates from speculators.” (We reported on that here.)
Overall, you can see that customer cancellations (not including the ones Tesla made) come to just ~2% of the total reservations that had been made.
Here’s a bit more, with a particularly teasing part bolded by me: “We have obtained this level of reservations without any advertising or paid endorsements, with only a few social media posts leading up to the March 31st unveiling, without anybody but those who were in attendance on March 31st having had an opportunity to test drive the car, without yet publicly disclosing numerous features about the car, and with almost no attempt to drive customers to make Model 3 reservations since the week following the March 31st unveiling. If we wanted to, we believe that we could further increase the number of Model 3 reservations with minimal effort, but believe it is better to guide customers to purchase products currently in production. We are on track to achieve volume production and deliveries of Model 3 in late 2017. Because of the significant demand that we have seen, we have decided to advance our 500,000 total vehicle build plan (combined for Model S, Model X, and Model 3) to 2018, two years earlier than previously planned.”
Naturally, several reservation holders on the TMC forum who quickly saw the cancellation news were rooting for more cancellations so that they can (theoretically) get their cars sooner. However, just as reservations tapered off, I expect cancellations have tapered off as well. Without a big jolt of bad news, I don’t expect they’ll drop much more, and once production time creeps around, and Tesla makes more big announcements about the cars, I expect we’ll see some big spikes in reservations again.
Oh yeah, Kyle has more coming on the financing boost, but suffice it to say, we all saw this coming: Tesla couldn’t move a production target of 500,000 cars to 2018 from 2020 without raising a lot of money.
*Update: Some other possibilities for cancellations I’ve seen tossed around are people accidentally reserving two online (stories of that) and reserving before seeing the car and cancelling because they were counting on a hatchback.