Would you increase your Model 3 deposit If?

[Wshowell]

Lots of interesting news today around Tesla needing to do another round of financing to fund the Model 3 assembly line. That, amongst other things, hit the stock price hard and got the press all in a fit about TSLA bleeding money. Elon is having a rough week with Falcon 9, the Twiiter self-imposed and missed deadline for AP 8.0 and such...

It got me thinking. How could Tesla get quick access to funds at a low cost without another round of stock dilution, bond offering of selling of shares?

If Tesla asked existing reservation holders to pony up another $5K in deposit money I wonder how many would? I'm not sure I'd want to give an interest free loan to tesla for 2 years even though I'm a firm drinker of the Tesla kool-aid.

Now, change that to pony up $5k in additional deposit money and Tesla will provide Supercharging for free on your car. Would you do it? I would in a heartbeat. This would be a win:win because I doubt most people really use Superchargers so much as to run up the cost. Those that have the extra $5K in the bank are getting next to nothing anyway in return. In fact, if they said pony up $10K and we will throw in AP for free, I would. Since SC and AP are both just software entitlements on the Model S they wouldn't be out anything. I'm assuming the 3 will all have the capability to supercharge and arrive with the hardware installed.

If 100K people were willing to make the extra $5k deposit tesla would generate $500MM which is what they need I believe for the new assembly line. If another 50K people were to opt for the additional $5k for the free AP upgrade that's another $250MM.

That's $750mm in 0% financing for the next several years and it would send a very strong signal to all the other fence sitting car manufacturers that the demand is legitimate.

Anyway, that was my thought. I also though about a bigger deposit to get bumped up higher in the delivery queue but that seemed to be very against what Elon is trying to do with his vision and the Model 3. Would like to hear other's opinions that have reservation(s).

 

[number12]

Lots of interesting news today around Tesla needing to do another round of financing to fund the Model 3 assembly line. That, amongst other things, hit the stock price hard and got the press all in a fit about TSLA bleeding money. Elon is having a rough week with Falcon 9, the Twiiter self-imposed and missed deadline for AP 8.0 and such...

It got me thinking. How could Tesla get quick access to funds at a low cost without another round of stock dilution, bond offering of selling of shares?

If Tesla asked existing reservation holders to pony up another $5K in deposit money I wonder how many would? I'm not sure I'd want to give an interest free loan to tesla for 2 years even though I'm a firm drinker of the Tesla kool-aid.

Now, change that to pony up $5k in additional deposit money and Tesla will provide Supercharging for free on your car. Would you do it? I would in a heartbeat. This would be a win:win because I doubt most people really use Superchargers so much as to run up the cost. Those that have the extra $5K in the bank are getting next to nothing anyway in return. In fact, if they said pony up $10K and we will throw in AP for free, I would. Since SC and AP are both just software entitlements on the Model S they wouldn't be out anything. I'm assuming the 3 will all have the capability to supercharge and arrive with the hardware installed.

If 100K people were willing to make the extra $5k deposit tesla would generate $500MM which is what they need I believe for the new assembly line. If another 50K people were to opt for the additional $5k for the free AP upgrade that's another $250MM.

That's $750mm in 0% financing for the next several years and it would send a very strong signal to all the other fence sitting car manufacturers that the demand is legitimate.

Anyway, that was my thought. I also though about a bigger deposit to get bumped up higher in the delivery queue but that seemed to be very against what Elon is trying to do with his vision and the Model 3. Would like to hear other's opinions that have reservation(s).

LOL

They would only get the interest on that money. That money is headed their way anyway.

~3% of 750M is 22.5M-free SC and/or free AP. Congrats I think you found a way to lose Tesla money.

If they did anything close to this plan I would short the stock immediately.

All about speculating ideas, but that one is bad.

 

[Wshowell]

LOL

They would only get the interest on that money. That money is headed their way anyway.

~3% of 750M is 22.5M-free SC and/or free AP. Congrats I think you found a way to lose Tesla money.

If they did anything close to this plan I would short the stock immediately.

All about speculating ideas, but that one is bad.

You lost me... You are assuming everyone will pay for "unlimited" supercharging and enable AP correct? This is unburdened debt so it doesn't dilute shareholder value or affect bond ratings. The press went wild when they were tallying up all the "FREE CASH' tesla was able to put in their coffers during the Model 3 release week.

 

[number12]

You lost me... You are assuming everyone will pay for "unlimited" supercharging and enable AP correct? This is unburdened debt so it doesn't dilute shareholder value or affect bond ratings. The press went wild when they were tallying up all the "FREE CASH' tesla was able to put in their coffers during the Model 3 release week.

Upping deposit reduces payoff when you receive car right? So it's just raising cash at X%. So you only get benefit from removal of interest payment. Roughly 3% or 22M. Subtract whatever benefit for that money like free charging cs charging for it. You basically raised 0 money.

 

[Wshowell]

Upping deposit reduces payoff when you receive car right? So it's just raising cash at X%. So you only get benefit from removal of interest payment. Roughly 3% or 22M. Subtract whatever benefit for that money like free charging cs charging for it. You basically raised 0 money.

Ok yes got it and a truly valid point. I agree that they would be giving up huge sums in order to reduce their interest rate. However, it's not just that, it's the effect on tangible valuation items but moreover it's the effect of perceived value and future commitment from the public.

It seems that Tesla is raising and spending capital at such an accelerated rate that it's really undercutting investor and industry confidence for a future valuation. I just read that the Rive cousins "gave up" over $100MM in stock options to do the SCTY TSLA merger. Today alone the stock value took a $1.5BB valuation hit. If some positive financial support could buoy the stock back up to 2016 highs that'd be reason to think outside the box on raising capital besides executives to give up options or writing personal checks to buy bond issuance.

Of course, on the flip side, asking people to pony up more money would look very desperate and the press would eat that up too. If you saw the documentary and the scene where Elon told all the Roadster depositors he was increasing the cost of their "yet to be built" car, now that was an ugly situation.

 

[shrspeedblade]

I expect Tesla to succeed, but also realize that it is not a foregone conclusion.

I put a grand up knowing that there is a small chance it could go poof, as the reward was worth the risk to me.

But, at $5000, the phrase "too rich for my blood!" applies. If I'm going to risk that much on Tesla it will be buying their stock after a dip.

 

[Red Sage]

@Wshowell -- Wow. The initial deposit for the Tesla Model S was $5,000. By early 2014 it had been reduced to only $2,500. You want people to pay $6,000 up front for their 'affordable car'? Having a $1,000 deposit amount was an absolute boon. Having it set at 20% of the Generation II amount firmly underlines that the car is meant to be affordable for all who are in the market for a new vehicle purchase. Increasing the amount sends the exact opposite message.

 

[Low Spark]

Well, based on the vote so far...71.4 % said yes. Taking a conservative total of serious depositors and applying that percentage gives Elon just over $1B dollars to work with. Seems like a no-brainer to me.

 

[Pinewold]

How about 5k to increase your priority of your spot in line? No cost just treat it the same as money spent on options. Reason for building high optioned cars fist was to get most money soonest. Since you are giving money ahead, treat it like you asked for that many options.

 

[Wshowell]

How about 5k to increase your priority of your spot in line? No cost just treat it the same as money spent on options. Reason for building high optioned cars fist was to get most money soonest. Since you are giving money ahead, treat it like you asked for that many options.

I think this would upset the people that stood in line or drove far away to get an earlier number since they would the. Be pushed further down the list. I do think that Tesla can do things to assist in their cash crunch that wouldn't ruffle anyone's feathers or add additional costs. Giving out free SC and or AP for a larger deposit would cut into profits on those cars but we just saw some crazy discounts given on inventory cars last week that most certainly hurt the profitability of the company for the sake of hitting a number.

 

[dsvick]

Well, based on the vote so far...71.4 % said yes. Taking a conservative total of serious depositors and applying that percentage gives Elon just over $1B dollars to work with. Seems like a no-brainer to me.

Not really, all of the deposits show up as a liability on their balance sheet. So, while they are free to use the money, they have to be cautious with how much of it they use in case they need to refund it.

 

[daniel]

I voted no, but for a different reason: I charge at home. My only long road trip is north from Spokane into Canada for hiking, and I don't expect there to be any superchargers on those secondary roads any time soon, and even if there were, I'd use them once a year each direction. So I have no need of unlimited supercharging.

However, if Tesla issued bonds at a favorable rate of interest to raise money for the Model 3 development and construction, I would buy them. I already own some TSLA stock, but I don't think I'd buy more because at my age I invest for income, and Tesla is a growth company.

 

[arnis]

I'm happy to pay for very rare SuperCharger access (or actually I'm fine with new free limit). But I would cough out 5k deposit in addition to 1k for AP unlock without actually paying for unlock later.

So no money for unlimited SC access.
No money for getting up in line.
But yes for "free features" - be it AWD, battery, seat memory or sunroof.

 

[contactace]

The super charger really does come in handy. I'm glad I have that for my X... strongly recommended! I have the snail charge at work and it's so slow.