Cancelling my reservation
- Thread starter TheMaverick
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- Model 3
To set everyone's expectations accordingly:
Wondering if Musk is overly ambitious/optimistic/means well/has difficulty executing is like
Wondering if the Pope is Catholic.
That sums up the reality pretty well from my experiences with Tesla.
Would I buy another car? Couldn't imagine it..
Wondering if Musk is overly ambitious/optimistic/means well/has difficulty executing is like
Wondering if the Pope is Catholic.
That sums up the reality pretty well from my experiences with Tesla.
Would I buy another car? Couldn't imagine it..
Dr. J
Active Member
It is significant that the $1,000 deposit is fully refundable. (Please allow 6-8 weeks for delivery.) Meaning: anyone that gets tired of waiting can readily get his/her money back. Many have, and have moved on.
BlackM3
Member
My 2 cents: Tesla harmed their credibility with new middle class buyers who waited in line for a $35K car and talked it up for 2 years to their friends and coworkers.
1) Tesla announces their new car will be $35K in early 2016.
2) People line up for hours to get an early reservation. Many are new middle class buyers. Even though people are familiar with Tesla's strategy of selling the most expensive version to rich people for months/years, this Model 3 seems like a new era for Tesla. They are reaching out to the mainstream buyer with promises of a cheaper, simpler car that is easier to manufacture and meant for the masses.
3) Q4 2017: New Model 3 cars go on sale for $49K instead of $35K. This is a 40% increase in the price that was promised by Elon the CEO. Buyers figure it will be a few months extra delay for the $35K version.
4) February 2018: Tesla informs the middle class buyers who waited in line for hours that they will NOT be getting their $35K car anytime soon. In fact it's delayed for a full year past when production began and will likely arrive in late 2018. Instead Tesla will continue building and selling tens of thousands of the version that is 40% higher in price. Then Tesla also decided to add a new version with 2 motors instead of 1 motor. After that, then they will design and deliver the $35K car.
Result: Tesla credibility is harmed for me and many other buyers. Why should we believe that it will be available at end of 2018 when there have already been 2 other delays? However, there are no other affordable electric cars with good looks available yet so we will keep our reservation and wait. When our friends and coworkers ask us about when we are getting our car we say the reviews for the car are great, but that we have been tricked the affordable version is delayed a year.
My suggestion to Elon and Tesla: Get to work on the $35K version of the car and start delivering that NOW. 6 months past first production is more than enough time to deliver a car with a smaller battery than what is already being delivered today.
Key takeaways:
1) Tesla delivered on their promise to build the Model 3 and make it a great car. Great job!
2) Tesla tricked us by promising a $35K car, then taking our reservation money for 2 years, then delaying the affordable build of the car by a year.
1) Tesla announces their new car will be $35K in early 2016.
2) People line up for hours to get an early reservation. Many are new middle class buyers. Even though people are familiar with Tesla's strategy of selling the most expensive version to rich people for months/years, this Model 3 seems like a new era for Tesla. They are reaching out to the mainstream buyer with promises of a cheaper, simpler car that is easier to manufacture and meant for the masses.
3) Q4 2017: New Model 3 cars go on sale for $49K instead of $35K. This is a 40% increase in the price that was promised by Elon the CEO. Buyers figure it will be a few months extra delay for the $35K version.
4) February 2018: Tesla informs the middle class buyers who waited in line for hours that they will NOT be getting their $35K car anytime soon. In fact it's delayed for a full year past when production began and will likely arrive in late 2018. Instead Tesla will continue building and selling tens of thousands of the version that is 40% higher in price. Then Tesla also decided to add a new version with 2 motors instead of 1 motor. After that, then they will design and deliver the $35K car.
Result: Tesla credibility is harmed for me and many other buyers. Why should we believe that it will be available at end of 2018 when there have already been 2 other delays? However, there are no other affordable electric cars with good looks available yet so we will keep our reservation and wait. When our friends and coworkers ask us about when we are getting our car we say the reviews for the car are great, but that we have been tricked the affordable version is delayed a year.
My suggestion to Elon and Tesla: Get to work on the $35K version of the car and start delivering that NOW. 6 months past first production is more than enough time to deliver a car with a smaller battery than what is already being delivered today.
Key takeaways:
1) Tesla delivered on their promise to build the Model 3 and make it a great car. Great job!
2) Tesla tricked us by promising a $35K car, then taking our reservation money for 2 years, then delaying the affordable build of the car by a year.
If supply is limited enough, and demand is high enough - count on Martians getting their first Roadster before Earthlings get their $35k Model 3.
It's complete common sense to extract as most margin as you can for a vehicle for as long as you can.
Few things in this world are not "pay to play".
I have a degree in Economics but I would think just about everyone would understand this intrinsic fact of life.
I believe Tesla is doing their best to manage the balancing act of customers/shareholders/production but they realistically have no competitors.
People can take their money to an alternative to get a vehicle sooner - but it will be an inferior one.
Disagree as you'd like but I tell it how it is.
outdoors
Always roaming
Still looking for that promise by the CEO. Can't seem to find it anywhere..
N5329K
Active Member
Tesla tricked us by promising a $35K car, then taking our reservation money for 2 years, then delaying the affordable build of the car by a year.
It wasn't a promise and it's no trick. It was an expectation Tesla encouraged, and you have every reason to feel disappointed. Just not betrayed.
Robin
It wasn't a promise and it's no trick. It was an expectation Tesla encouraged, and you have every reason to feel disappointed. Just not betrayed.
Robin
Even if a $35k variant loses money on each one sold?
"We are expecting a negative Model 3 gross margin in Q1, while generating positive operating cash flows." - Tesla Fourth Quarter & Full Year 2017 Update.
Tesla is not saying what the Average Transaction Price is on the Model 3LR is, but it is likely to be about $55,000. And they believe they will lose money at that price. This is probably why the 2 motor is arriving before the $35k variant. It could even be the actual reason for slower than expected ramp-up schedule. Q4 lost more money than ever before.
This! I understand people who wanted the 35k base model are disappointed. Would it ease the pain if Tesla just acknowledged that they can’t build the car for that without losing money?
When a retail store makes a mistake and sells something below cost, they do it for customer service reasons. Tesla can’t goodwill a 10k loss on 300,000 vehicles...not if they intend to borrow more capital from the same people who have provided it thus far.
You can be frustrated, and you can cancel your reservation. But you have no “right” to buy something at Tesla’s loss. That’s a mindset that seems relatively new and likely to run into reality.
ℬête Noire
Active Member
The bolded part is disjointed from objective reality. Perhaps you mean something more like "regularly sets goals that are very challenging to execute on"?
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I was on holiday and hadnt got found to listening to the earnings podcast.
Starting to believe there will never be a $35k version if they can't make a gross profit on a car loaded with high margin upgrades this far into the production ramp.
Someone is feeling a bit of class persecution, hyperbole much?
ℬête Noire
Active Member
That's a very good point to keep in mind, and that's probably fair for figuring out the order in which variants are likely to become available. That's kinda inside baseball stuff.
However I'm not sure how at the time you'd know about the Model 3 worthy enough to drop down a $1000 (assuming $1000 is something that means something to you) without knowing about the Model X manufacturing difficulties. Tesla had been dragged through the press for that for quite some time by then on that snafu. Even relatively cheerleader outlets tended to toss a tidbit about in the Model X falcon door centered difficulties in nearly every Tesla article. Further, if I'm tossing down a $1000 deposit I tend to dig some. Even for a "fully refundable" deposit, because sometimes that stuff goes sideways, too. *shrug*
EDIT: Musk laughed about it on stage Mar 31, 2016. I just watched that video in full for the first time yesterday. Man, it must have been tough getting out of bed everyday to face that pain.
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bonnie
I play a nice person on twitter.
My assumption is that the negative gross margin is because of NRE costs associated with starting up a new production line.
It's always negative in the beginning. That's normal. Product lines don't magically pay for themselves. Costs of getting up and running are amortized over the life of the product -- meaning as production volume increases, costs go down for each individual vehicle. I didn't read that as meaning that the COGs > than the base car price, only that engineering development costs plus expenses associated with line startup are exceeding profit to-date. Which makes sense. It also makes business sense to get to the positive side of the line by making heavily optioned cars. It means they reach break-even that much sooner.
ℬête Noire
Active Member
@McRat 's quote is about Q1. If there wasn't any room to improve factory floor efficiency it would certainly be a reasonable longterm concern, but that's hardly the case.
A lot of start-up pain going on there, paying for the whole building and not using that much, along with not fully automated to the extent they are expecting.
JRP3
Hyperactive Member
"This far into production ramp" is basically still at the beginning. Elon set aspirational goals but at the same time said those goals would likely not be met on time. No one seems to remember that part yet they "remember" a "promise" which was never made.
N5329K
Active Member
I knew very well there'd be "issues" with ramp and delivery (one of Tesla's founders and I were collaborators on a project) and I still put down my deposit (the morning after the reveal...I wanted to make sure it wasn't going to be a weirdmobile). But you don't just bring your credit card to something like that. You also bring your hopes, your desire to see a better world and not another gas station again. Ever. It all gets mixed up pretty thoroughly when you're talking about a Tesla. That's why people were lined up outside Tesla stores and not outside, say, GM dealerships. You really want to believe, you want it to work, you want it all to be true. This is the secret sauce behind the big reservation numbers.
Tesla dodged one bullet by designing a compelling-looking car (I still think it's compelling). They dodged a few more when it turned out Model 3 wouldn't have a liftback. Or an instrument binnacle. Or a HUD. Or a key fob. It remains to be seen how much ordnance they'll have to dodge when it comes to actually selling that compelling car for the price they said it would sell for a year (or more?) after many line-waiters expected to see a Model 3 in their driveway.
Robin
BlackM3
Member
March 2016: On stage Elon says:
"In terms of price it will be 35 thousand dollars".
"You will not be able to buy a better car for 35 thousand dollars even if you get no options. It's a really good car even with no options."
On the same day, they collected hundreds of millions of dollars in (refundable) reservations from a new group of people hoping for a $35K car.
Actually I still believe Elon's statements, and I think Tesla is an overall good company that will deliver on their promise. Production delays of a year are a credibility issue, but not the biggest problem. The part where we got tricked was when the car was delivered for $49K (40% price increase) and they will keep improving and delivering that version for at least a year before they sell the $35K version. I'm a bit surprised to see the various arguments from Tesla forum members about how I should not feel that they should build and deliver the $35K version now. Wow. Anyway I'm looking forward to enjoying the car.
"In terms of price it will be 35 thousand dollars".
"You will not be able to buy a better car for 35 thousand dollars even if you get no options. It's a really good car even with no options."
On the same day, they collected hundreds of millions of dollars in (refundable) reservations from a new group of people hoping for a $35K car.
Actually I still believe Elon's statements, and I think Tesla is an overall good company that will deliver on their promise. Production delays of a year are a credibility issue, but not the biggest problem. The part where we got tricked was when the car was delivered for $49K (40% price increase) and they will keep improving and delivering that version for at least a year before they sell the $35K version. I'm a bit surprised to see the various arguments from Tesla forum members about how I should not feel that they should build and deliver the $35K version now. Wow. Anyway I'm looking forward to enjoying the car.
ℬête Noire
Active Member
Go ahead feel that way....just urging you to realize it isn't particularly rational and to stop misaiming blame and using loaded words like "tricked" to dodge your significant part in reality not lining up with your expectations.
ℬête Noire
Active Member
"Me being emotional about this, my dreams not fully lining up with reality, is someone else's fault." That's where I step in to call BS.
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