How many model 3 reservations will cancel out of 400,000?

[CmdrThor]

I think one major problem for a lot of people who are hoping to get the credit is that they will have to place an order and make their deposit non-refundable before they know whether they will get the credit. Tesla gives general indications of criteria they use for priority (options ordered, location, etc), but there is a whole lot behind the scenes that doesn't always make sense.

Even if some east coasters order early, I can see it now where Tesla is cranking out Model 3s in the quarter that the full credit expires and California reservation holders who have not ordered get a call saying if they order now they can take delivery that quarter and get the full credit. East coasters meanwhile get the shaft because they are too far away to deliver the vehicle in time for quarterly delivery numbers (and the tax credit).

 

[alseTrick]

Consider this, if Model 3 is on time and new reservations are scheduled for mid 2018 then it's likely a vast majority of current reservation holders will get the full credit.

Seems doubtful.

 

[aesculus]

A base S minus tax credit vs a 3 without a credit is a hard sell to me. Plus a year or two wait.

Precisely. If they were all that interested in owning an EV like a Tesla, they could have had a low end Model S after credits etc. for about the same cost as an equivalent 3 would be. I think a lot of people (I know at least 6 persons) just got caught up in all the excitement.

 

[Twiglett]

with tax credit expiring, options being more expensive than anticipating, personal situations changing.... how many can we expect to cancel?

This makes no sense to me.
The tax credit was always going to expire and not in the slightest bit of a surprise.

 

[diesel]

I would be surprised to see more than 100k, I estimate the number will be ~60k based upon folk who find they can buy another vehicle (i.e. a Volt, Leaf, Model S or X) sooner. My own personal experience is that I made a reservation for a M3 and later decided that a MS60 whilst free supercharging was available was a good option for me to get a car right now rather than wait for a few years (I wouldn't expect the M3 to be available to Australia until 2019)

I never would have bought something in the luxury sedan segment previously but my old Holden Commodore with > 200,000 kilometres definitely wouldn't survive until 2019.

 

[ohmman]

I voted 100k+ based on what happened to both the Model S and Model X. Reservations outpaced early shipments. They will catch up but so many people get hyped and then reality hits (or lack thereof) when it's actually time to take delivery. Plus I also think EV early adopters are starting to saturate a bit. Tesla and the Bolt may have captured most of them already.

I disagree. The X reservation situation was blunted by a vehicle that disappointed on a lot of metrics. I believe the reality of the falcon wing doors, the lack of folding seats, and other tangibles encouraged reservation holders to walk away. In Tesla's defense, a lot of people showed up to fill those gaps, and I've learned to love my X. But I do think that's why we saw the attrition rates on the X that won't apply to the 3.

I know a few "wealthy" people who wanted to watch the S/X thing unfold before they committed. One of them wanted an S but was unwilling to own a car that was so big, so he's waiting on his 3. We may be near "early adopter saturation" but in my opinion we're not even bordering on saturation for the EV market. This car speaks to a lot of people on a number of different levels:

• Competitive pricing
• Reduced adoption risk (proven model)
• Vehicle size
• Brand/service security (Tesla will be around to service broken vehicles)
• Established fast charging network

I'm probably in a bubble of some sort, but I'd be very surprised if even one person that I know cancels their 3 reservation. That covers about 12 reservations, and it's across the country, not just in forward-looking California.

It'll be interesting to follow.

 

[ricardocabesa]

I disagree. The X reservation situation was blunted by a vehicle that disappointed on a lot of metrics. I believe the reality of the falcon wing doors, the lack of folding seats, and other tangibles encouraged reservation holders to walk away. In Tesla's defense, a lot of people showed up to fill those gaps, and I've learned to love my X. But I do think that's why we saw the attrition rates on the X that won't apply to the 3.

I know a few "wealthy" people who wanted to watch the S/X thing unfold before they committed. One of them wanted an S but was unwilling to own a car that was so big, so he's waiting on his 3. We may be near "early adopter saturation" but in my opinion we're not even bordering on saturation for the EV market. This car speaks to a lot of people on a number of different levels:

• Competitive pricing
• Reduced adoption risk (proven model)
• Vehicle size
• Brand/service security (Tesla will be around to service broken vehicles)
• Established fast charging network

I'm probably in a bubble of some sort, but I'd be very surprised if even one person that I know cancels their 3 reservation. That covers about 12 reservations, and it's across the country, not just in forward-looking California.

It'll be interesting to follow.

"forward-looking California"?

 

[pinski]

I think one major problem for a lot of people who are hoping to get the credit is that they will have to place an order and make their deposit non-refundable before they know whether they will get the credit. Tesla gives general indications of criteria they use for priority (options ordered, location, etc), but there is a whole lot behind the scenes that doesn't always make sense.

Even if some east coasters order early, I can see it now where Tesla is cranking out Model 3s in the quarter that the full credit expires and California reservation holders who have not ordered get a call saying if they order now they can take delivery that quarter and get the full credit. East coasters meanwhile get the shaft because they are too far away to deliver the vehicle in time for quarterly delivery numbers (and the tax credit).

Even after placing the order, all that's on the line is the $1000 deposit, correct? Just becomes non-refundable at that time. Yes, it's still a decent chunk of money, but if it becomes clear that you're not going to be among those receiving the full credit (if you're dependent on it), then you could cancel. You'd be out the $1000 deposit, but would have "saved" about $2750 by doing so.

For me, if we don't get in the queue that will receive the full credit, it's going to be a lot more difficult to convince my wife to keep our reservation.

 

[dsvick]

I think one major problem for a lot of people who are hoping to get the credit is that they will have to place an order and make their deposit non-refundable before they know whether they will get the credit. Tesla gives general indications of criteria they use for priority (options ordered, location, etc), but there is a whole lot behind the scenes that doesn't always make sense.

Unless you're one of the early people that get to configure and order I would think you should have a pretty good idea of the rate of production and be able to make and a pretty good guess as to whether or not you'll get the credit. Sure there will some people that will be right on the edge of one quarter or the next and not know for sure but most people should be able to figure it out.

 

[McRat]

"forward-looking California"?

He's joking. Normally we are looking at our cellphones.

 

[dsvick]

Precisely. If they were all that interested in owning an EV like a Tesla, they could have had a low end Model S after credits etc. for about the same cost as an equivalent 3 would be. I think a lot of people (I know at least 6 persons) just got caught up in all the excitement.

You're saying that a base Model S 60 at about $60K after the tax credit is equivalent to a Model 3. Without the tax credit I can take a base Model 3 and add $25K in options to get to the $60K for the base Model S - there is no way the 3 isn't significantly better.

 

[ryanakata]

Odd maybe, but $7500 out of "$35k" is a big deal. It's over 20%. Off an S or X it's less than 10% and customers are more affluent.

$1000 refundable deposit isn't the biggest commitment either.

The worse part is they also put down a non-refundable deposit for an Elio, which will probably never see the light of day.

They lost that money but "It was spent so long ago, it doesn't matter". Where as apparently the Tesla isn't worth it and it's "pointless without a tax credit".

Some people I just don't understand.

 

[BluestarE3]

"forward-looking California"?

Somebody's gotta be leading the way.

 

[eisbock]

Precisely. If they were all that interested in owning an EV like a Tesla, they could have had a low end Model S after credits etc. for about the same cost as an equivalent 3 would be. I think a lot of people (I know at least 6 persons) just got caught up in all the excitement.

I'm struggling with this right now. Do I get a stripper S or a nicely-optioned 3? Thing is, even the base S has lots of cool features that will likely be options on the 3 and will be a damn fine car even if I don't fully load it. Plus, the S is a far better-looking car.

I'm leaning toward the 3 though, simply because I want options. I want the AWD for these harrowing winters, I want Autopilot (which is now no longer chump change!), larger battery of course, and maybe I'll splurge for a premium package if the price is right.

For that reason, even though I like the S's looks more, I can't justify spending the same amount of money for a car that doesn't have the features I want. I suppose since it's ridiculous to expect the 3 to be equivalent to an S but $35k cheaper, I'll have to make some concessions on form to ensure I get the function I desire.

 

[eisbock]

Unless they're all hard-up for their thousand bucks right now, why not wait a year to see how Model 3 deliveries and cumulative Tesla U.S. sales stack up by then? If the credit is gone by then and they haven't yet received their cars, then cancel and get their deposits back. By canceling now, they'll end up in the back of the queue should they decide they want a Model 3 after all (e.g., cars begin delivering to Louisiana customers and the tax credit is still available).

I'm not sure I even believe this story. First of all, everybody in the office reserved under the pretense they'd be getting the tax credit? And that's literally the only reason they did so?

And then these people turn around and dump the reservation just because some silly tech blog speculated they won't get the credit? Not even cold hard facts, just a completely ungrounded inkling. I mean, we've only reached halfway toward expiration. We're only halfway there! This is speculation on an event that might happen an entire year from now. They were seriously spooked by reaching the halfway point and an article trying to create news where there is no news?

My god, it's a good thing they don't follow TSLA on Seeking Alpha, or they'd have cancelled their reservation 10 minutes after making it! Hell, they probably would've managed to cancel the reservation before making it!

There are tons of reasons to cancel, and this is by far the dumbest I've heard.

 

[Zaxxon]

Also, if they're anywhere near the front of the line, they can likely sell the car immediately at a profit. There's gonna be... a market.

Also, I'm with ohmman--the X reservation situation is likely to be different than the 3's. (I could, of course, be wrong on this.) The X did not meet some folks' expectations (when it first shipped, especially) due to several areas not meeting the reveal's promises (folding seats and therefore overall space, falcon door initial quality/reliability, etc). Tesla largely laid off the crazy in the 3 reveal outside of the internal controls, and I don't think they'll make the same mistake this time.

 

[alseTrick]

I'm struggling with this right now. Do I get a stripper S or a nicely-optioned 3? Thing is, even the base S has lots of cool features that will likely be options on the 3 and will be a damn fine car even if I don't fully load it. Plus, the S is a far better-looking car.

Like what, do you think?

 

[ricardocabesa]

I'm not sure I even believe this story. First of all, everybody in the office reserved under the pretense they'd be getting the tax credit? And that's literally the only reason they did so?

And then these people turn around and dump the reservation just because some silly tech blog speculated they won't get the credit? Not even cold hard facts, just a completely ungrounded inkling. I mean, we've only reached halfway toward expiration. We're only halfway there! This is speculation on an event that might happen an entire year from now. They were seriously spooked by reaching the halfway point and an article trying to create news where there is no news?

My god, it's a good thing they don't follow TSLA on Seeking Alpha, or they'd have cancelled their reservation 10 minutes after making it! Hell, they probably would've managed to cancel the reservation before making it!

There are tons of reasons to cancel, and this is by far the dumbest I've heard.

Since I arrived late to the party on 12/26,I doubt I'll qualify for more than the last part of the program,$1875. But in no way did it figure into my decision to purchase. Nor would the full ride if it were available.

 

[Trev Page]

There are a number of factors that could affect reservation cancellations:

• Final pricing is unknown. Options $ could turn some people off. (Unrealistic to charge $1500 for metallic paint on a $35K car)
• Wait times. Some people are impatient and will go elsewhere if ramp is slow.
• Final design. Lots of people are freaking out over the simplistic interior (not final yet).
• Competition. Some might just go to the Bolt after we see the final design. It happens
• Performance. Unrealistic expectations might push some to a Model S
• Size. Not much smaller than a Model S but some will still covet Model S
• Cargo space. Frunk is smaller/smallower (witness custom shaped luggage @ reveal event)
• Model 3 liftback has a smaller opening than full Model S liftback or Bolt hachtback.
• Financial distress
• Tax credit phased out. Some are counting on getting the credit to help financially
• Meh... changed my mind.

I'm sure there are other objections but you can't expect all 400K+ reservations to convert into firm orders. Their plan at Fremont was always to hit 500K by 2020 (now 2018) and with the new expansion they're projecting 1M probably by 2020. I think it's one of the reasons why they have not updated the reservation count (surely over 500K by now) since June because they can't make a dent in the 400K at the moment so why disappoint and turn away customers if they won't be getting cars until 2019? Tesla has said at the current projected production rate the first year is completely sold out (2017-2018)

 

[Dwdnjck]

The biggest driver of Model 3 cancellations will be Model Y. Otherwise, Model 3 reservations would rise faster than cancellations for a couple of years,at least.