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Blog Report: Tesla Has Refunded 23% of Model 3 Deposits

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Nearly a quarter of all Model 3 deposits in the U.S. have been refunded, according to a report from a company that analyses anonymized credit and debit card purchases.

About 450,000 people gave a $1,000 deposit to reserve a place in line for Tesla’s electric car for the masses. However, Second Measure says 23 percent of those people have asked for their money back.

A Tesla spokesperson told Recode that Second Measure’s data does not match its own, but did not offer more specifics. Second Measure says its numbers matched when Tesla CEO Elon Musk disclosed reservation figures last August that suggested 63,000 reservations had been canceled.

“Our analysis aligns with Tesla’s reported figures, also finding that 12 percent of deposits had been refunded at that time,” the report says.

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The Model 3 has experienced serious production woes that could push out delivery of some reservations for years. It’s understandable that some consumers either can’t or are not willing to wait that long for a new vehicle. Still, there’s no doubt that Tesla will continue to sell Model 3s as fast as they can make them.

The company said it delivered just 8,180 Model 3s last quarter, but expects to notch a significant milestone in production this month.

“Another set of upgrades starting in late May should be enough to unlock production capacity of 6000 Model 3 vehicles per week by the end of June,” Musk said in a letter to employees in April. “Please note that all areas of Tesla and our suppliers will be required to demonstrate a Model 3 capacity of ~6000/week by building 850 sets of car parts in 24 hours no later than June 30th.”

Model 3 deposits are fully refundable up until the customer configures a car by selecting features and paying an additional fee of $2,500. After configuration, vehicles are typically delivered in just a few weeks.

Update: It’s worth noting that canceled reservations for the Model 3 may have been converted to orders for a Model S or Model X.

 
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I wonder if the $2500 between configuration and delivery sits in that fund as well. If so your quantity of reservations is high.

Imagine 6,000 S and X and whatever the current float of Model 3 all times $2,500. Each one counting to reduce the Model 3 reservation estimate by 2.5. So if it is 10,000 cars float, it'd be 25,000 less reservations?
It is high, but they claim they have nearly a bilion dollar in reservations, now I don't know the details of them, so I made an estimated guess.
Maybe solar panels and battery packages are also involved, I don't know.
I'd like to see others making their estimated guesses.
 
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If you read the original article it's specifically about US deposits only.

I'm somewhat concerned that the trend may grow once the federal tax credit starts phasing out. Alternatively, Tesla may have to lower prices to compensate which will reduce their profit margins The cancellations may also have a significant effect on Tesla's dwindling cash, since the reservations make up a full third of their cash holdings according to the article. Hopefully they'll become profitable before it becomes critical.

I think that is part of what you are already seeing.
 
Cancellations do not necessarily mean people do not want a 3. In addition to the wait time and upsells. Reservation holders may not have the money or have needed to spend it on other things. Just think about marriage, divorce, children, change in housing, jobs, school etc. Things can change a lot in two years. I love my wife's 3 but not as much as my old S. I have delayed my second reservation to decide wether to get a performance 3 or a newer CPO S.
 
Care to actually read say the 10Q and tell us jest what/where you want/need more transparency ??
Tesla - Quarterly Report

Perhaps the FORM 8K?
Tesla - Current Report

nearly $1billion in deposits - can only make about 100,000 Model S/X per year max. we shall see how Tesla does.
side note: industry reports sedan sales down, SUV sales up - If Tesla can make the 100,000 who cares about the mix?

What transparency problem ??

Hmm, I apologize for any misunderstanding.
I don’t believe there is any transparency “problem” per se.
The research piece shows us more information than was in those reports.
It would be nice if Tesla released monthly data on reservations. And if they had, they could better control the information hitting the wires.
As such, with minimal data, they leave it up to others to fill in the blanks.
Some will err on the side of doom and gloom, others are far to pollyannish.

Both of those can create problems. Tesla could prevent these problems by being more transparent.
I suppose if you qualify ‘not preventing a problem’ as a ‘problem’ then I would agree it is a problem.
 
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the only reason people cancel is because of the wait
If EM said that it's not true. People have a number of different reasons for canceling. Life change, needs change, dissatisfaction with the product, dissatisfaction with the cost of the car available for sale, deciding on a new S or an X, a used S or X, a Jaguar, a Bolt, etc etc.
Waiting too long is just one of those reasons.
Robin
 
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A bit strange they only show numbers after May 2017.

Why? Could it be because so many ordered the Tesla Model 3 in the year prior to that that these later numbers doesn't matter in comparison? Show us the numbers of May 2016 for scale!
Tesla reports quarterly, not monthly. Elon doesn't like feeding meaningless numbers that are only "important" to speculators. It is Actual performance that counts - cars made/delivered/sold. Still can't make them fast enough.
Quarterly reporting - not daily/weekly/monthly and of course the annual report.
 
Hmm, I apologize for any misunderstanding.
I don’t believe there is any transparency “problem” per se.
The research piece shows us more information than was in those reports.
It would be nice if Tesla released monthly data on reservations. And if they had, they could better control the information hitting the wires.
As such, with minimal data, they leave it up to others to fill in the blanks.
Some will err on the side of doom and gloom, others are far to pollyannish.

Both of those can create problems. Tesla could prevent these problems by being more transparent.
I suppose if you qualify ‘not preventing a problem’ as a ‘problem’ then I would agree it is a problem.
Customer problem? No, seems only a speculator problem. I don't see a problem.
Controlling info that hits the wires? seriously?
As long as Tesla doesn't spend ad dollars with the Media, don't expect many good Tesla stories.
Anyway, who trusts anything from the media now days?? not me - seems all PR and spin.
 
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Cancellations do not necessarily mean people do not want a 3. In addition to the wait time and upsells. Reservation holders may not have the money or have needed to spend it on other things. Just think about marriage, divorce, children, change in housing, jobs, school etc. Things can change a lot in two years. I love my wife's 3 but not as much as my old S. I have delayed my second reservation to decide wether to get a performance 3 or a newer CPO S.
. This is absolutely spot-on. I suspect most of the 23% cancellations have nothing to do with the car per se. People's lives change over a two-year period and, for all kinds of reasons, their car-buying choices (and needs) change. The 'proof of the pudding' will be the demand rate after the backlog has been filled. If they're making 5K/week and people buy 250K per year then they're solid.
 
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Customer problem? No, seems only a speculator problem. I don't see a problem.
Controlling info that hits the wires? seriously?
As long as Tesla doesn't spend ad dollars with the Media, don't expect many good Tesla stories.
Anyway, who trusts anything from the media now days?? not me - seems all PR and spin.

Every company attempts to influence their appearance in the media.
Perhaps “control” was the wrong word, but “influence”, definitely.

And like it or not, almost everyone is influenced my media, be it news on TV, car magazines, Facebook or other sources.
If they were not, advertising wouldn’t be a thing.

Again though, this seems to be a legitimate research paper. The results are reasonable, and not delivered in an inflammatory way.

I don’t see what here is surprising to people.
 
Every company attempts to influence their appearance in the media.
Perhaps “control” was the wrong word, but “influence”, definitely.

And like it or not, almost everyone is influenced my media, be it news on TV, car magazines, Facebook or other sources.
If they were not, advertising wouldn’t be a thing.

Again though, this seems to be a legitimate research paper. The results are reasonable, and not delivered in an inflammatory way.

I don’t see what here is surprising to people.
side note: If the product is needed, good quality, fair price people should buy. IF not then the company should probably just go out of business. Brand development vs Product development - the product wins.
He seems to think PR/spin/Ads money better spent on product improvement. I tend to agree.
Perhaps this helps explain Elon's behavior toward media?
 
This hardly seems surprising, certainty not worth sensationizing. Over a 2 year period people’s lives, preferences, and needs change. If the product is successful and a quality value there will be plenty of replacement depositors to replace the cancellations well before Tesla can build them anyway.
 
I think the big question isn't so much all those existing reservations, but instead, "What effect will the cars that get sold have on the general public?" More specifically, as more buyers start to expose their friends and family to these somewhat affordable cars will there be a big uptick in new reservations or will the general public still give a collective yawn to EVs (here in the TMC bubble it is easy to believe everyone is clamoring for more EVs...they aren't)?
 
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I think the big question isn't so much all those existing reservations, but instead, "What effect will the cars that get sold have on the general public?" More specifically, as more buyers start to expose their friends and family to these somewhat affordable cars will there be a big uptick in new reservations or will the general public still give a collective yawn to EVs (here in the TMC bubble it is easy to believe everyone is clamoring for more EVs...they aren't)?
That is a very good question.
According to the 3rd party report, deposits have continued at roughly the same rate for the recent
I would expect there to be more as production ramps up and the wait gets shorter.
 
That is a very good question.
According to the 3rd party report, deposits have continued at roughly the same rate for the recent
I would expect there to be more as production ramps up and the wait gets shorter.


I've been a "Car Guy" for a looong time, and the Model S is the first car I've owned that "non car people" seem to be really into. I mean sheesh, after a funeral several weeks ago we went to a family gathering (for the deceased) at their house....before it was over I was giving test rides around the block. That never happened with any of my other cars. Beyond that, I am seeing YOUNG people who are suddenly interested in this car (interest in cars by younger folks is practically non-existent in my experience). Anyway, I have a (bad) feeling a lot of folks are really stretching to get into Model 3s and that could result in more of their peers doing exactly the same thing. Heck, I see half the population here in Texas riding around in SUVs that I know cost as much or more.
 
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No that won’t work. Here’s why:

Disagree. If the article said "Tesla reservations collapsing!", I would agree.
This is simply an analysis. It doesn't seem unreasonable.

Other people will try to fill in the blanks.

We do it, Bloomberg News did it, this company did it.

Best way to stop Tesla.

Do you see the point? Writers, out of sloppiness, negligence, ignorance, or spite, will redact portions of Tesla’s statements in such a way to obscure the original meaning, suggesting a wholly different message that Tesla didn’t say. Ever heard of telephone tag? It happens in “journalism” every day, consciously or not.
 
23% is quite low IMO. I'm impressed.

Unlike the S/X, this attracted people with far less means. Like others have said, lives change and $1,000 means a lot more to those who can only afford a 3 vs those who can afford a S/X. Considering the $35,000 tagline and how that increasingly looks like a pipe dream according to the media, the fact that only 23% cancelled is quite impressive.
 
No that won’t work. Here’s why:



Do you see the point? Writers, out of sloppiness, negligence, ignorance, or spite, will redact portions of Tesla’s statements in such a way to obscure the original meaning, suggesting a wholly different message that Tesla didn’t say. Ever heard of telephone tag? It happens in “journalism” every day, consciously or not.

I agree articles always have some errors. However, any reputable article also links to the actual report.
Articles that are intentionally misleading are easily corrected IF there is real information from Tesla.
Without that real information, you simply have a case of he said she said, which fits into the short term goal of the shorts.
 
23% is quite low IMO. I'm impressed.

Unlike the S/X, this attracted people with far less means. Like others have said, lives change and $1,000 means a lot more to those who can only afford a 3 vs those who can afford a S/X. Considering the $35,000 tagline and how that increasingly looks like a pipe dream according to the media, the fact that only 23% cancelled is quite impressive.
I'm not impressed, more people need to hurry up and cancel so I can get mine this year.
 
If the numbers are true, it is just outstanding for Tesla
The more interesting stat though would be cancellation rate when the order window opens. Even so, now that people have pretty accurate pricing information they probably are either cancelling now or are good for a purchase excluding changes in financial means and buyer's remorse.
 
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