Should Tesla move M3 reservations to a realistic time closer to actual release?

[Krugerrand]

If I was Tesla, I would start with a single variation of the Model 3, bare bones, rather than the top of the line.

This is an interesting idea that has validity, however, I vote no and here's why: I wouldn't trust the media reporting and headlines that could (and probably would) come of Tesla offering a bare bones/striped down version. 'Tesla guts Model 3 making it barely more than a golf cart'

And as well the point made by Fiver about margins. Getting those higher margins just means more cash flow for Tesla to put the pedal to the metal with expansion plans that we don't even know about yet. Go big or go home, I say. I also believe there will be obscene gobs of people wanting a fully loaded Model 3 with Sub first in line.

 

[ProphetM]

I don't see any reason why they have to offer just one version at launch anyway. Do other carmakers do that? It's not like there will be some sort of fundamental difference between the lower- and higher-end versions that prevents them from being manufactured on the same line. They will do some batching I assume, but that shouldn't be enough to significantly effect deliveries from one version to another. I would hate to think that on the eve of production Tesla is so cash-strapped that they need to make all the expensive ones first just for the money. Personally I hope they will just make what's been ordered, more-or-less in the order it was reserved.

Early orders will probably tend towards more-optioned anyway, as those reservation holders will have been able to afford giving Telsa a bunch of money years in advance; few of them are likely to want a bare-bones version. For selfish reasons, I am hoping there will be no first-release Signature version. Although I'll upgrade mine in some ways, I don't have much interest in a fully-loaded version like a Sig, and there's no way I would be able to afford the likely huge deposit required for one if I did. So putting out a thousand Sigs first would just make my own car arrive that much later. There's not much you can get on a Sig that you can't get by just ordering all the options, is there? Aside from the badging.

 

[aronth5]

This is an interesting idea that has validity, however, I vote no and here's why: I wouldn't trust the media reporting and headlines that could (and probably would) come of Tesla offering a bare bones/striped down version. 'Tesla guts Model 3 making it barely more than a golf cart'

And as well the point made by Fiver about margins. Getting those higher margins just means more cash flow for Tesla to put the pedal to the metal with expansion plans that we don't even know about yet. Go big or go home, I say. I also believe there will be obscene gobs of people wanting a fully loaded Model 3 with Sub first in line.

This is why I'd love to see a lottery for lets say 500 lucky winners who would get the bare bones $35k model right away along with the fully loaded model that other early deliveries would receive. We know the expensive Model 3 is what their accountants want. The lottery would be fun and give Tesla great publicity. Can you imagine how much interest a lottery would get in the forum!
I wouldn't participate in the lottery myself as I will add options.

 

[Krugerrand]

This is why I'd love to see a lottery for lets say 500 lucky winners who would get the bare bones $35k model right away along with the fully loaded model that other early deliveries would receive. We know the expensive Model 3 is what their accountants want. The lottery would be fun and give Tesla great publicity. Can you imagine how much interest a lottery would get in the forum!
I wouldn't participate in the lottery myself as I will add options.

A vision of the 'running of the bulls' came to mind - in a China store - with no exits - and the lights off.

 

[Fiver]

This is why I'd love to see a lottery for lets say 500 lucky winners who would get the bare bones $35k model right away along with the fully loaded model that other early deliveries would receive. We know the expensive Model 3 is what their accountants want. The lottery would be fun and give Tesla great publicity. Can you imagine how much interest a lottery would get in the forum!
I wouldn't participate in the lottery myself as I will add options.

For some reason I get the feeling the media would just cover this poorly. "Tesla offers lottery for chance to buy cheap car... Meanwhile, continues to sell expensive cars out of price range for normal people."

 

[ludicrousspeed]

If the deposits are refundable, how can Tesla use this cash and where would it show up on the income statement? Not doubting that they can, just genuinely curious because that will be a TON of extra revenue, especially if they keep reservations at $5K.

 

[stopcrazypp]

If the deposits are refundable, how can Tesla use this cash and where would it show up on the income statement? Not doubting that they can, just genuinely curious because that will be a TON of extra revenue, especially if they keep reservations at $5K.

It shows up as a liability. Some states/countries require deposits to be put in an escrow, but when that is not a requirement, Tesla can use the money.

 

[ludicrousspeed]

It shows up as a liability. Some states/countries require deposits to be put in an escrow, but when that is not a requirement, Tesla can use the money.

Thanks, deferred revenue does make sense. Hopefully not too many areas require an escrow and Tesla can put it towards getting production vehicles out on time.

 

[shokunin]

After the X delay debacle, should Tesla (after showing the car next spring) not accept reservations until it's actually closer to release? We know it's a few years off. Tesla will know when it's probably 4-6 months out and could open reservations then. I feel like building up 30,000+ reservations for a car from the general public isn't exactly fostering goodwill, especially if it has delays like the X.

Tesla knows by reserving well in advance it takes people "off the market" on a car and allows people to plan and save for the car. Instead of jumping on that new 2017 BMW 325i, they might have their eye on the Model 3 based on what was shown and previewed and people will wait. Since these cars are BTO, they need a fat pipeline to ensure a proper launch and potentially front load the highest (most profitable) packs first.

It's also good for PR for Elon to boasting about the number of reservations on the car.

 

[McHoffa]

Tesla is not in danger of going under, worst case they issue more stock and move forward. Assuming the Model 3 design isn't a weird Mobile I'll be reserving day 1, minute 1 hopefully. I'll take a signature series fully optioned, thanks.

Ditto... been waiting for the M3 for YEARS (meaning since the MS was released and they said they'd have one cheaper eventually). Now I am working toward a place where I could get a lower end Model S, so when the reveal happens, I'll make my decision to put deposit on two M3s or go for a MS sooner. I love the X, but I think those doors are asking for trouble down the road. I hope they make the M3 sexy but simple to save costs. All I REALLY want out of it is that acceleration, and I'll pay for a fully loaded M3 if that's what it takes.

 

[gene]

I'd pay for two deposits right now if it was allowed.

 

[ImEric]

I don't see any reason why they have to offer just one version at launch anyway. Do other carmakers do that? It's not like there will be some sort of fundamental difference between the lower- and higher-end versions that prevents them from being manufactured on the same line. They will do some batching I assume, but that shouldn't be enough to significantly effect deliveries from one version to another. I would hate to think that on the eve of production Tesla is so cash-strapped that they need to make all the expensive ones first just for the money. Personally I hope they will just make what's been ordered, more-or-less in the order it was reserved.

I think that there will probably be Signature versions, in that Signature Red and that Signature badge for the signature customers, but I would hope that, unlike with the X, Tesla opens up the design studio for everyone to at least publicly display a $35,000.00 price tag. That has been the main selling point of the III for some time now. That and "real-world, usable 200 mile range." So having the media say things like "Tesla's Model III" cost $60,000.00 could really hurt interest in a company that doesn't do any advertising. Maybe not enough to really affect the bottom line, though, since I fully expect the III to have well in excess of 100k reservations before launch. I, too, will be ordering 2 non-signature versions in March on Reveal day. One for me, one for my girlfriend, to whom I'll be proposing before March, and to whom I will hopefully be married by the time we get our matching Teslas .

 

[MassModel3]

...one for my girlfriend, to whom I'll be proposing before March...

Well now that the cat's out of the bag, I certainly hope she doesn't read these forums!!!

 

[ImEric]

Well now that the cat's out of the bag, I certainly hope she doesn't read these forums!!!

...damnit.

 

[aronth5]

Well now that the cat's out of the bag, I certainly hope she doesn't read these forums!!!

...damnit.

ImEric so I just have to ask will she more excited about the proposal or the Model 3?:smile:

 

[KD5MDK]

Probably the Model 3, if he's already willing to put down a deposit AND make a proposal, it's probably a pretty stable relationship that could keep going as is for a while.

 

[Big-T]

Assuming reservations are indeed refundable, I think I could make a semi worthwhile argument that Tesla should do the opposite and open reservations right now.
Here's my logic (or lack thereof, you all can decide)...

There's clearly a lot of pent-up demand for this car, however it no doubt varies in intensity levels. I think the constituents can very roughly be grouped-out something like this, sorted in descending order of desire:

1. Non-Tesla owners amazed at what the company has achieved so far, desparate to be a part of it, who have high confidence that the M3 will meet or exceed their expectations at a price point they can handle. They almost want to have that agonizng years-of-blind-faith-waiting experience so that they will feel worthy when meeting the OG Roadster, S and X folk who suffered before them and allowed the 3 to be.
2. Tesla owners happy with their Roadster/S/X and anxious to add an M3 to the portfolio.
3. Non-Tesla owners impressed at what the company has achieved so far, definitely wanting to go EV and this sounds like the one, just waiting for the reveal to see if it is.
4. Non-Tesla owners who think the company is bold/intriguing but still have reservations about whether it's going to survive the cash bleed needed to make it to prime time, M3 is on their this-could-be-my-EV radar, but want to see concrete proof of if/when it's going to happen and if this car will really be all that and a bag of chips.

I think there's a lot of people in Group 1 (me for sure) and maybe Group 2 that would lay down cash today, sight unseen, if that got us an earlier production slot. Most of Group 3 will wait to commit at or soon after the reveal. Group 4 will commit when they feel it's close enough to production to prove that the naysayers are wrong, the company is still doing fine and it's all "real".
Although there is indeed a slight risk of more cancellations if the car isn't what's expected or production doesn't start on time (though the need-to-pay-for-now-running-Gigafactory incentive is a huge one to ensure it does), I think the addtional show of faith and new buzz this would create for the company would be well worth it. And I'm sure the injection of what might be a couple of hundred mil into the coffers, although not hugely significant, certainly wouldn't hurt and should help maintain investor confidence in this dark period where they obviously need to spend a hell of a lot more than they're making to finally build the car that will get them to the "big time".

So, who's in??

I'm #3, but I'll be one of the folks crashing the server March 31st at midnight (or whenever they open orders). If they opened it up tonight you bet I'd be mashing F5 on my browser until I got the page to load. Even though I would like to see SOMETHING before I actually get the car, I don't want to get shoved 1 or 2 years back in line by waiting. If I don't like what I see I'll just get a refund on my deposit later.

 

[BriansTesla]

I think that since this is Tesla's "peoples car" the reservation system should allow everyone, regardless of what options they are paying for, equal chance to make a deposit early in the process. This might mean delaying the start of reservations until all the pricing is fully baked. This would mean putting off deposit taking for a while but I think in the long run this would be a good thing, avoiding the likelihood of bashing about "no $35,000 Model 3's".

I think this could be a win win for Tesla and Model 3 buyers.

 

[Cebe]

I think that since this is Tesla's "peoples car" the reservation system should allow everyone, regardless of what options they are paying for, equal chance to make a deposit early in the process. This might mean delaying the start of reservations until all the pricing is fully baked. This would mean putting off deposit taking for a while but I think in the long run this would be a good thing, avoiding the likelihood of bashing about "no $35,000 Model 3's".

I think this could be a win win for Tesla and Model 3 buyers.

This is why they should start with base car only. One option - supercharging, otherwise, pick a color, and that's it. A year later, start with the P and all the things that push it up to $60k.

 

[gregincal]

I think that since this is Tesla's "peoples car" the reservation system should allow everyone, regardless of what options they are paying for, equal chance to make a deposit early in the process. This might mean delaying the start of reservations until all the pricing is fully baked. This would mean putting off deposit taking for a while but I think in the long run this would be a good thing, avoiding the likelihood of bashing about "no $35,000 Model 3's".

I think this could be a win win for Tesla and Model 3 buyers.

They don't need (any never have had) pricing available when taking reservations. Nobody chooses options when making a reservation.