Cars

Published on May 19th, 2016 | by Zachary Shahan

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8,000 Tesla Model 3 Customer Cancellations (2%) — Not Too Shabby

May 19th, 2016 by  

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. 😀

Battery Model 3 Tesla

model3_quarter_mod2

Tesla Model 3 favorite


 

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.

Your thoughts?

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.

Related: Tesla Model 3 Production & Deliveries To Be Timed To Maximize Tax Credits?

Pictures by Kyle Field | CleanTechnica


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About the Author

is tryin' to help society help itself (and other species) with the power of the typed word. He spends most of his time here on CleanTechnica as its director and chief editor, but he's also the president of Important Media and the director/founder of EV Obsession, Solar Love, and Bikocity. Zach is recognized globally as a solar energy, electric car, and energy storage expert. Zach has long-term investments in TSLA, FSLR, SPWR, SEDG, & ABB — after years of covering solar and EVs, he simply has a lot of faith in these particular companies and feels like they are good cleantech companies to invest in.



  • Zachary Pernikliyski

    Just order mine I wonder how many people are going to make reservations between now And the next unveiling

    • Calamity_Jean

      I’d reserve one if I could figure out how to pay for it. There’s probably a lot of people saying the same thing, and some of them will figure out how to pay for it. Maybe even I will.

      I can’t imagine not wanting a Tesla.

  • Chris Gage

    Elon just texted me and said I’m going to get one of the pre-production models. He said the car was going to drive itself to my house but that it would be able to pick up enough Uber fares along the way to pay for my Full Plaid upgrade. I guess I’m ok with that as long as they don’t eat french fries in my car.

  • omar

    I think orders will jump again at secound and final unvailing.

  • Carl Raymond S

    There will be a second bump when the remaining features are revealed. At least that’s what Tesla have intimated.

  • Marion Meads

    Hmmm…. at least my number has moved earlier by 8,000 assuming that no new reservations with costlier options are added…

    • omar

      I have already did a model to try to expect for you when you can get your M3 based on previous Tesla production plan and the result was that you will get it middle or end of 2018 but now with the new plan you will get it end of 2017 or Jan 2018, this is the huge move for you. 8000 mouvment is not significant from 380000 reservations.

    • NRG4All

      You raise a good point. It would be interesting to know if the 8,000 were closer to the first reservations, spread evenly, or what. My guess is that you may be right, that the reservation cancellations may be more from the first ones reserved before the unveiling.

  • Philip W

    Apparently they weren’t as close to 400k as everyone thought. I would’ve expected them to reach 400k by now.
    Still an amazing number we can’t complain about 🙂

    • Meh, I think they were about where I expected when Elon said they were approaching 400,000, but rather than continuing to pull in reservations, I think they basically halted and some cancellations occurred as people got concerned that it would take years to get their cars.

      But who knows? That’s how I’m reading everything.

      • Bob_Wallace

        Didn’t Musk say that there would be another info drop before long?

        If there’s more good news then the number might shoot up again. I might sign up when it looks like delivery could be about three years away. I just don’t want to buy a new car before then.

        • Brian

          Gee, I can’t believe Sanders isn’t enthused about the Democratic party! Let’s see: the DNC chair is a vocal Clinton supporter who tried to hide Democratic debates on the worst nights possible for exposure, the committee cut Sanders off from its important voter database, various state party representatives have unfairly given Clinton an advantage in delegate selection processes, the party has a sweetheart fundraising deal with Clinton and they recently changed their rules to accept more money from corporate lobbyists – a practice that Sanders deplores. Why should running in the Democratic primary stop Sanders from criticizing the party leadership and apparatus? Some prominent Democrats have even insinuated that he never should have ran as a Democrat if he doesn’t like the way the party is run. You can believe in a lot of the issues that the Democratic party stands for, believe that Clinton is the best candidate to beat Trump, while also still believing that the Democratic party is corrupt institution that caters to corporate interests over the people and needs to be overhauled. It’s one thing to say that Sanders should lay off Clinton and focus on Trump. But saying “don’t criticize your party” sounds like something out of Soviet Russia. If anything, progressives should be criticizing it more.

          • Bob_Wallace

            Off topic…

        • Yes, there’s supposed to be a “part 2.” And this bit from the SEC filing says the same: “without yet publicly disclosing numerous features about the car.”

          Model Y for you 😀

          • Toiko

            Any fleet action? Rental cars company mobiles?

          • Haven’t heard of anything like that. I’m sure a lot of people are looking at those options, but Tesla hasn’t allowed more than 2 reservations from a single individual.

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