Tesla Says Model 3 Orders Top $10B In First 36 Hours

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$10 billion in thirty six hours? Holy crap! I figured the thirty five thousand price point would make the Model 3 a popular choice for the electric car crowd but that's just crazy. I guess the big question now is if Tesla can fill all 253,000 orders. :eek:

Tesla Motors Inc said orders for its new Model 3 electric sedan topped 253,000 in the first 36 hours -- a fast start for the company's first mass-market vehicle, which may not begin to reach customers for another 18 months or more. Tesla Chief Executive Elon Musk tweeted on Friday that the Model 3, which is slated to go into production in late 2017, will sell at an average price of $42,000, including the price of options and additional features, which would give the initial flurry of orders an estimated retail value of $10.6 billion.
 
That sounds like a big number, but I wonder how much the amortization point is.
 
I wonder how many people will cancel their orders when they find out they no longer qualify for the huge tax rebates.
(the rebates phase out after a certain number of cars are sold)
 
nutzo said:
I wonder how many people will cancel their orders when they find out they no longer qualify for the huge tax rebates.
(the rebates phase out after a certain number of cars are sold)
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THe rebate begins to fall off after hitting 200,000, for the manufacturer, total. If they accept all these orders, they technically are out of rebates for all their cars as of now.

However, Tesla gets special treatement from the government. They are getting $45,000 worth of money for the Model S from credits they sell to gas car makers when they should only get half that. Here, it may be closer to 20-25,000. The credit scheme is a tax [gas] & subisdize [electric] scheme hidden as a regulatory requirement.
 
I have yet to understand why cheap cars almost always look like large baby-nike-shoes... wouldn't they sell like hot-cakes if they used a more classic style?
 
They can fill all those orders, the question is how soon. Obviously they'll have to do better than 50k / year. They intend to, based on all the factories they're building.
 
EODetroit said:
They can fill all those orders, the question is how soon. Obviously they'll have to do better than 50k / year. They intend to, based on all the factories they're building.
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The new plant should have plenty of capacity to fulfill those order, but it isn't ready yet. They are saying those order will stretch in to 2019 and maybe 2020.
 
rezerekted said:
Preordering a car is about as dumb as preordering a PC game.
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Rest assured that there will be a 2nd market that appears for the first be batches of people that pre-ordered. There's always some rich guy that was late to the game and wants one "now" and happily pays 150-200% (or more) in some cases to be the first on the block.

If I knew it was an easy way to get an almost 50% return on my money (or whatever that crap winds up being) I'd happy throw my name into the hat. I have a mortgage though and prefer more solid avenues of building ones worth.
 
nutzo said:
I wonder how many people will cancel their orders when they find out they no longer qualify for the huge tax rebates.
(the rebates phase out after a certain number of cars are sold)
Click to expand...

It's a $35,000 car. That's not an unreasonably price to pay given the total cost of ownership compared to a gasoline powered car in a similar weight category.
 
collegeboy69us said:
Rest assured that there will be a 2nd market that appears for the first be batches of people that pre-ordered. There's always some rich guy that was late to the game and wants one "now" and happily pays 150-200% (or more) in some cases to be the first on the block.

If I knew it was an easy way to get an almost 50% return on my money (or whatever that crap winds up being) I'd happy throw my name into the hat. I have a mortgage though and prefer more solid avenues of building ones worth.
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If they were paying that much extra, they would opt for a Model S instead. But I'm sure these will go for a premium on the used market.
 
HockeyJon said:
It's a $35,000 car. That's not an unreasonably price to pay given the total cost of ownership compared to a gasoline powered car in a similar weight category.
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True, but those tax rebates were 7,500 fed + state. I think he is correct in that quite a few folks will drop their pre-order if the tax break doesn't get renewed/limit increased.
Raekwon said:
If they were paying that much extra, they would opt for a Model S instead. But I'm sure these will go for a premium on the used market.
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That is a great point, perhaps if one could sell their spot in line, but I'm sure those will be non-transferable.
 
rezerekted said:
Preordering a car is about as dumb as preordering a PC game.
Click to expand...

Not the same in that this reservation is fully refundable at any time.

Silentbob343 said:
True, but those tax rebates were 7,500 fed + state. I think he is correct in that quite a few folks will drop their pre-order if the tax break doesn't get renewed/limit increased.

That is a great point, perhaps if one could sell their spot in line, but I'm sure those will be non-transferable.
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Tesla isn't going in order of reservations completely. Former Tesla owners get priority, then California, then the ones that ordered the higher specced (more expensive) versions.
 
Tsumi said:
Not the same in that this reservation is fully refundable at any time.



Tesla isn't going in order of reservations completely. Former Tesla owners get priority, then California, then the ones that ordered the higher specced (more expensive) versions.
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Yes
 
Look, I'm excited about the Model 3 as well, but it is amazing to me how many people are willing to order one based solely on pictures and very light details of an unfinished prototype.
 
Zarathustra[H] said:
Look, I'm excited about the Model 3 as well, but it is amazing to me how many people are willing to order one based solely on pictures and very light details of an unfinished prototype.
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Like I said, it's the near zero risk that is allowing this. If $500 was non-refundable, I am 99% sure there wouldn't be a third as many reservations.
 
I'd say the numbers are slightly BS'd. It was a $1,000 deposit on the vehicle which registers as a 'sale'. So while you have 253,000 orders or $10 Billion in sales, the raw cash is significantly lower. That's a lot of up-front costs.


I get faster results on a kickstarter.
 
Zarathustra[H] said:
Look, I'm excited about the Model 3 as well, but it is amazing to me how many people are willing to order one based solely on pictures and very light details of an unfinished prototype.
Click to expand...

That and their terrible time appreciation. I will be surprised if this prototype makes it to the assembly line in 2017.
 
jpm100 said:
THe rebate begins to fall off after hitting 200,000, for the manufacturer, total. If they accept all these orders, they technically are out of rebates for all their cars as of now.

However, Tesla gets special treatement from the government. They are getting $45,000 worth of money for the Model S from credits they sell to gas car makers when they should only get half that. Here, it may be closer to 20-25,000. The credit scheme is a tax [gas] & subisdize [electric] scheme hidden as a regulatory requirement.
Click to expand...

Oh it's more messed up than that. They phase out over time once the goal is hit. Tesla has already pumped out a bunch of cars, so at this point the majority of pre-orders will not get $7500 in subsidies. Now what they get is highly dependent on what tesla does in sales for other models while waiting on the cheaper ones, and how quickly they can make them once the threshold is hit.

I hope their terms were spelled out really well in teensy tiny print, or they could wind up on the wrong side of a class action suit for not producing as fast as is possible if they did everything perfectly.
 
wgm3446 said:
I'd say the numbers are slightly BS'd. It was a $1,000 deposit on the vehicle which registers as a 'sale'. So while you have 253,000 orders or $10 Billion in sales, the raw cash is significantly lower. That's a lot of up-front costs.


I get faster results on a kickstarter.
Click to expand...

I would have to disagree. We have a Telsa store here in Irvine,CA and when the preorders opened up. There was a line of people waiting to make their preorder that snaked through the mail area. It looked like a damn iPhone line. One of my co-workers went by a few hours later and she said there where still people waiting in line to make there preorders.

That is was just one store in one city. If it was like other places, I think these numbers are pretty realistic.
 
SGTGimpy said:
I would have to disagree. We have a Telsa store here in Irvine,CA and when the preorders opened up. There was a line of people waiting to make their preorder that snaked through the mail area. It looked like a damn iPhone line. One of my co-workers went by a few hours later and she said there where still people waiting in line to make there preorders.

That is was just one store in one city. If it was like other places, I think these numbers are pretty realistic.
Click to expand...


I agree, but those preorders, were people making the $1,000 deposit to reserve a vehicle or were they pay for the vehicle in full?


$10B in orders does not relate to sales until the customer receives the product.

According to the Securities and Exchange Commission, the seller cannot recognize revenue related to a layaway situation until it has delivered the held goods to the customer. Until that point, any cash received from the customer should be recorded as a liability.
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Yeah, the press and non-buyers are not taking the 10k in tax credits into consideration. But I can assure you the people buying the Model 3 are doing just that.

With tax credits the Model 3 only costs about 25k.

The Federal Gov even gives Automakers huge tax breaks for clean energy car production. However, there is a problem. It's only up to 200,000 cars. Production over 200,000 cars erases these tax breaks. So this is both good and bad news for Tesla.

At the state level, for example, in California, there is an additional $2,500 tax credit.

There are many pro's and con's but more pro's the more affordable the car costs. For example, electricity vs gas and total cost of ownership. It's possible to recoup a major portion of your investment over the expected life time of an electric vehicle.

The Saudi Oil Empire has forecast models that show it needs to start selling all of it's oil now. That's one of the reasons OPEC refuses to lower it's daily output / production. You do not want to be left with billions of dollars of oil left in the ground when a lot less people have demand for it.

The real money is in quantity. If he can sell 10 billion in cars at 35k. He can make trillions of dollars at a 20k price point. Electric cars are going to take over the market in the next decade. Longer range and much cheaper ownership.
 
Something tells me that this is not going to go well for all these preorder people.

I mean Tesla will not be able to meet such demand.
 
wgm3446 said:
I agree, but those preorders, were people making the $1,000 deposit to reserve a vehicle or were they pay for the vehicle in full?


$10B in orders does not relate to sales until the customer receives the product.
Click to expand...

The line was designated for Model 3 Preorders only. They had signs stating so and I got to watch them tell a guy that he had to wait in the line no matter what to make a preorder for the model 3. He started to throw a fit and the security kindly escorted him away.
 
SGTGimpy said:
I would have to disagree. We have a Telsa store here in Irvine,CA and when the preorders opened up. There was a line of people waiting to make their preorder that snaked through the mail area. It looked like a damn iPhone line. One of my co-workers went by a few hours later and she said there where still people waiting in line to make there preorders.

That is was just one store in one city. If it was like other places, I think these numbers are pretty realistic.
Click to expand...

Did they put their $1000 down to buy a car? Or to flip their spot in line? Is 253k the actual demand for the car. Even if every customer is earnestly intent on buying, it still doesn't necessarily mean the numbers aren't bullshit. They cna be bullshit because we are heading to 300k in a few days of pre-orders, and tesla honeslty doesn't have the capacity to make them anytime soon. Their optimistic goal back when it was 180k was end of 2017 to deliver them. They can't afford to build lower margin vehicles, and the $1000 deposit is not enough money to support ramp up of production. Are those people in line willing to wait 2-3 years for a car? Howabout 4? For example, FCA rolled otu the renegade/500x with an initial 125k capacity in manufacturing and ramped that up to 375k oc annual capacity. But doing so required about 18 months of executing a plan that had about 2-3 years baked in for bringing the capacity online. Tesla makes cars in the low 5 figures quantities, and are bringing on TWO new models, one of which they took a shitload of preorders for wiht an admission that higher priced items go first. The federal incentives are on a ticking box already, and they will surpass the threshold for credit phase outs well before they deliver even a third of what they took pre-orders for unless they drop a fuck ton of them REALLY, REALLY fast. Like record setting fast.
 
Many of you are forgetting, that many Tesla Model 3 pre-orders are from outside of USA, so they dont count towards 200K cars which get federal tax credit.

Also, Tesla plan has been for several years to have 500K / year car production capacity in 2020 and thats what they are spending money for a past few years.


Everyone knows, that those ordering now wont get their car before 2019, but that is not a surprise.
Why people do it? Some because of tax credit and some because they want a reasonably priced long range EV with features, that others like GM Bolt of Leaf 2.0 likely wont have (like supercharger network).
 
I owned a 72" Bug that had been converted over to electric. Paid $6500 for it. I didn't drive it much and ended up flipping it for $7500. But it didn't have that great of range like a modern electric car. I think I got around 65 miles range. Can't remember.
 
Tesla walked away with 273 Million dollars without having to solicit extra funding and having an open ended "Fully refundable" deposit scheme is even better as they can sit those funds in an account and use it to hedge operating costs from their cash reserves.

Bravo Musk! I cant wait to get mine with fucking autopilot ;)
 
Not to say they can't do it. However last quarter they delivered just over 14k Model X due to parts supply issues. There is already a backlog of orders for their current models. What happens when people get tired of waiting for back orders?

I would love to have a model 3, just not boarding the Musk hype train.

Tesla blames 'hubris' for Model X part delays - BBC News
 
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Here is a wrench that tesla and no one on this site has talked about yet. What if the UAW forms a big enough union at tesla, and threatens to strike for better wages. Like the boeing UAW did when the dreamliner got its preorders inline. These preorders could be a powerful tool for the UAW to bargen with...

Sure tesla can threaten their jobs, but the autoworkers may be able to get another job, but can tesla fold his company and get another to replace it? There are sharks in those waters too.
 
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