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A way Tesla could convert preorders to cash

Discussion in 'TSLA Investor Discussions' started by henderrj, Apr 7, 2016.

  1. henderrj

    henderrj Member

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    A boatload of people have, in effect, added the combined equivalent of more than a million shares of Tesla stock with Model 3 preorders. To meet the demand Tesla seems poised to offer actual additional shares. But there may be another way for the Stanford poster child to raise these needed funds. Having myself stood in line for three hours this would certainly pique my interest.

    “Dear Tesla Model 3 reservation holder. If you turn your preorder into a hard order with an additional non-refundable deposit of $5000 you will receive Supercharger access for free when you configure your car.”Of course they could use many features – autopilot would be a definite draw.

    Maybe they have levels – for $1,000 you get supercharger access, for $5,000 you also get autopilot, add on another couple grand and you get the heads up display (if that actually materializes). Okay, maybe a chart of options to be gained for free – a buffet of electric tech!

    To be helpful they’d have to get this money soon so some offerings could not be listed.

    One caveat – they must not let people jump the live by converting now. This would create animosity amongst the many faithful who have begun savings accounts for the purchase of their Tesla.

    Hmm, that’s a last thought. “Help us oh people! Convert to a hard order and anything you put down we’ll pay prime plus X percentage like any savings account.” Hey, Musk did Paypal, right? This couldn’t be that hard. Save up the money and save the planet in one fell swoop!

    What are your thoughts? Would it be better/simpler just to raise more capital the conventional way?
     
  2. stopcrazypp

    stopcrazypp Well-Known Member

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    This would send the wrong signal that Tesla is desperate for cash (naysayers would have a field day; there are already some that say the current reservations are a cash grab), and nonrefundable deposits would go against convention.

    In case it is not clear, right now Tesla can use the funds, given it is not in an escrow (for most, there may be some regions that require deposits to be in escrow). There is no need to make it nonrefundable.
     
  3. henderrj

    henderrj Member

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    I agree that some (thinking a certain Seeking Alpha contributor) will find anything they can to push the stock down. But the reality of needing a faster ramp-up would seem obvious to most investors. A question is whether such an action would drive the stock price up or down.

    Obviously my wording was somewhat tongue-in-cheek - more eloquent language would, i'm sure, be forthcoming from our California crew. And, yes, Tesla can use the funds, they just need a lot more of them to produce 200K units the first year. Well, at least that's my thought. Am I right?
     
  4. bonaire

    bonaire Active Member

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    A graduated decrease in price could be done. Get 2017 Model 3 out say September 2017 at base price of $41k plus options and those who don't mind paying extra, get the first 10-20k of them. Then each month after, lower base price by 500 until a year later, you are roughly at $35k. There would be plenty of those willing to pay more early on due to the 7500 ITC wind-down. Those who want it earlier would pay more and offset the R&D costs and perhaps higher battery costs in the earlier builds.
     
  5. stopcrazypp

    stopcrazypp Well-Known Member

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    No need for changing anything about base price. Tesla already said they will be doing the same thing as with S and X: the ones with the most options will have priority. So the first batch out of the gate will be the most expensive ones anyways.

    Changing the base price will have the media saying Tesla broke their promises.
     

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