23% Of U.S. Tesla Model 3 Reservations Have Been Refunded

JUN 4 2018 BY DOMENICK YONEY 175

Cancellations may now be outpacing new orders

The Tesla Model 3, just like certain modern human celebrities, owes some portion of its fame to just being popular. When the order books first opened up for the all-electric sedan on March 31, 2016, people stood in lines at stores around the U.S. in an effort to be among the first to take delivery of a car they wouldn’t see until later that day.

A week later, it was announced that the company had received 325,000 initial reservations — within a month the figure had climbed to 400,000. By the time the first vehicles were ready to be handed over to the first customers, the number, despite 63,000 cancellations (about 12 percent), had still grown to 455,000 worldwide. It was a phenomenon the auto world had never seen before.

Image Via Second Measure

With production being pushed back a couple times, though, it seems that juggernaut of a number may have decreased. According to analytics outfit Second Measure which “analyzes billions of anonymized purchases to answer real-time questions about consumer behavior,” reservation refunds have, of late, outpaced deposits, leading to a total of 23 percent of reservations being returned since that first heady day of down-the-block lineups.

Looking at their graph, it seems the bloom really started to come off the rose this past January, with the deflowering accelerating in April. Of course, new reservations are still coming in but their pace has not been equal to those receiving their $1,000 deposit back. According to Recode, which also covered the issue, Tesla says the Second Measure numbers do not “align with its internal data, but would not be more specific as to how far off it is.” We’ have also reached out for clarification and will update this post with any new information.

It seems likely a large portion of these latest cancellations are related to the pushback of the base $35,000 version of the sedan and price-sensitive customers realizing they won’t be able to take advantage of the full $7,500 tax credit that begins to phase out when a manufacturer reaches the 200,000 mark.

While the issue certainly makes for a dramatic headline, the cancellations won’t really affect Tesla for now. It’s still far from being able to keep up with demand. It had targeted producing 5,000 Model 3’s per week by the end of this month, a rate which would equal 260,000 units over a year.

In a related story, after conducting a teardown of several Model 3 units, a German company said it believes Tesla could reduce its cost to build significantly —  as low as $28,000 ($18,000 for materials and logistics and $10,000 for labor). Tesla CEO Elon Musk later confirmed, on Twitter, that he believed this would indeed be possible.

What wasn’t disclosed is that this teardown was performed on the Long Range Model 3 (which is and has been the only Model 3 available to date). If a similar teardown took place on a base $35,000 Model 3, it would likely prove much less expensive to build. This information seems to suggest that the base Model 3 will show its face at some point (despite naysayers) and the automaker will be able to turn a profit on it. We can only wait to see when the originally promised Model 3 will come to be and how it may all pan out, as well as how reservation holders and new buyers will react to the variant.

33 photos
2. Tesla Model 3
Range: 310 miles; 136/123 mpg-e. Still maintaining a long waiting list as production ramps up slowly, the new compact Tesla Model 3 sedan is a smaller and cheaper, but no less stylish, alternative, to the fledgling automaker’s popular Model S. This estimate is for a Model 3 with the “optional” (at $9,000) long-range battery, which is as of this writing still the only configuration available. The standard battery, which is expected to become available later in 2018, is estimated to run for 220 miles on a charge. Tesla Model 3 charge port (U.S.) Tesla Model 3 front seats Tesla Model 3 at Atascadero, CA Supercharging station (via Mark F!) Tesla Model 3 Tesla Model 3 The Tesla Model 3 is not hiding anymore! Tesla Model 3 (Image Credit: Tom Moloughney/InsideEVs) Tesla Model 3 Inside the Tesla Model 3 Tesla Model 3 rear seats Tesla Model 3 Road Trip arrives in Tallahassee Tesla Model 3 charges in Tallahassee, trunk open.

Source: Recode, Second Measure

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175 Comments on "23% Of U.S. Tesla Model 3 Reservations Have Been Refunded"

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Omar Sultan

Without explaining the methodology that got them to 23% this seems kinda pointless and fake news-y. You guys have a great reputation for doing the in-depth analysis with the sales scorecards–maybe apply that some rigor to other posts.

xcat

Hey! This isn’t CNN.

MDEV

You mean Faux news

Tom

And my favorite ‘percent of what’? Certainly not 23% of 455,000. Clicking through to the source article there is a second graph which gives a better indication of total deposits and total refunds for the net number. It doesn’t give exact numbers in a table though which is unfortunate and is indexed to 2017. A ‘net outstanding reservations’ number would be nice though.

Percents aren’t any good unless we know the numerator and the denominator.

doggydogworld

I came up with 582k gross reservations. 46.5k had configured as of the last data point (this includes ~20k who who switched to S or X). 134k had received refunds and 402k reservations were still active.

Nix

So starting with the baseline 455K reservations, the net so far is that 448.5K have either purchased S/X/3, or still have active reservations.

Not too shabby, actually.

Of course we have nothing to really compare that to, because no car maker has ever had reservation numbers anywhere near these numbers. The closest comparison would be that ICE car buyers on average test driving and walking away from 2 cars before buying the third car they drive. That’s a 66% rejection rate. Not exactly the same, but since most car makers have zero reservations on the majority of their cars, there really isn’t a way to compare apples to apples.

Phil Gorski

What percentage of those just didn’t want to wait and decided to buy a Model S or X?

mx9000

Also, what percent couldn’t wait, and signed a lease deal on a eBMW, for example, but will be back in the market in 3 years?

MoMac

In 3 years, there will be a number of new and good EV models to choose from.

Get Real

Yes, thanks to Tesla’s unrelenting pressure on the
legacy laggards.

Terawatt

Why do you credit Tesla with this? It’s the regulators, CARB, the EU, and China, that are getting the incumbents to start moving. Tesla has very little to do with it, and it’s really annoying that people keep misunderstanding the issue. But it is pretty obvious if you think about it: if there’s political will, we certainly don’t need Tesla on order to get zero-emission cars.

Maybe Tesla contributes to creating that political will. Or maybe they do the opposite. I certainly know in Norway there are a lot of people that can’t afford a newer car who are pretty pissed off that the stock brokers are breezing past them in the bus lane in their subsidized Model X, parking for free, and paying no road toll – while a single mum who can’t afford to replace her 13 year old diesel pays high road tax, fuel tax, parking fees, and can’t use the bus lane. In fact a lot of the attacks on EV incentives in Norway argue precisely that it is anti-social to subsidize this kind of too big, too heavy, and for other road users too dangerous vehicles – Tesla.

Counterpoint

Tesla is part of the push toward electric vehicles because they proved people will buy electric cars. Prior to Tesla, electric vehicles were even more of a niche market than they are now. But as a result of the Model S and Model X, more companies are planning their own electric lines. Political pressure is a big factor in the rush to electrification, to be sure. But it’s not the only one.

I can agree with you, though, that EV subsidies are largely benefitting the rich, since the poor and middle class rarely have the means to buy such expensive cars, even with the subsidies.

Dave_the_braver

Of course Tesla is pushing the OEMs … they have demonstrated sexy cars that a safe, efficient, long range, quick, and have a charging system for long trips. The OEMs were/are complaining that they could/can not make cost effective cars that weren’t/aren’t ugly, slow, with small batteries.
The point of subsidies is to enable EVs … and they are doing there job. Tesla was forced to work top-down because they started from scratch. The OEMs do not have that excuse: where are their EVs that compete with Tesla’s?
#TeslaKillerCemetery

Robert Weekley

Well, poor people also seldom figure out how to raise their income levels, too. Mostly because they see themselves as victims to an outside force, and not in control of making changes in their life. Also “Poor” is a Mind Set, and “Broke” is Temporary.

Single Mothers often work so much, between Job and Raising Children, they also can fall into the trap of no time, energy, or money, to improve their situation! But, not all single Mothers, or Single Fathers, as in my own brothers case!

Asak

Not everyone has above average intelligence, drive etc. Some people have bad attitudes, that’s true.

But saying being poor is purely due to mindset is about as true as saying my not being in the NBA is due to mindset, nevermind my below average athletic ability. The world just isn’t that simple.

Robert Weekley

So, like they did in the USA, subsidized H1 Hummers would be better? Remember that old beast? It came about just in time to kill the EV1 from GM! And, it got accelerated 100% Depreciation, exactly Because it was heavy: over 6000 pounds!

However, are you saying Mitsubishi Never sold any iMiEV’s in Norway on this Tax Incentive Program? (Or the Peugeot Variants of it?) I suppose no European Volts were Sold in Norway, too; based on your Targeting Tesla as the Problem! And Nissan never Sold a Leaf there, either, according to your slant on this complaint!

SansIce

One can credit Tesla with this because they are the first to create exciting, highly desirable vehicles that lots of people want and have true long range capabilities. They are the best of the best and a benchmark for all other manufacturers – that is why.

Djoni

Obviously, you could use some of you tera?watt to make your brain work to write more toughfull comment here!
See Robert Weekly reply below.
Tesla ain’t the only EV available, it’s a luxury we all know about, but complainning about poor working class not able to get a cheap EV is misleading.

Rooster-x

Norway doesn’t directly subsidise electric vehicles, they tax fossil fuel vehicles heavily instead making electric vehicles appear cheap or same cost as the their FF brethen. I agree they do push electric cars with charging infrastructure, zero tolls etc..

Jason
I think you have to be pretty daft if you don’t think Tesla has hugely influenced the EV market. For instance, you cite CARB and those mechanisms, but all they have done is force manufactures to sell very low volume of EV in that specific market, hence we see EV’s in California (mostly) but not really anywhere else. Yet Tesla is everywhere, and everywhere around the world! Now look at what Tesla has done. Model S has eaten into the luxury car market so much it has those manufacturers scrambling to get a product to compete. That’s a fact supported by worldwide sales data. Nissan has done a lot for EV’s, but even with all their resources it has been a pretty slow climb. Look at somewhere like Australia. There are 2+ timed as many Tesla as there are Leaf. In fact Nissan dropped the Leaf because they couldn’t sell it, but Tesla built the Super Charger network because they gamble they will be able to keep on selling more Tesla (can’t wait for Model 3 to get here). Ask anyone what the Leaf is and they don’t know. Ask them what a Tesla is and they will probably say… Read more »
Pushmi-Pullyu

I certainly hope so! Of course, since Tesla’s competitors keep aiming at where Tesla is, not where it’s going, Tesla is going to continue to lead the way.

Vexar

I really hope InsideEVs has a social event some day and I get a chance to meet you. You remain one of the more thoughtful and informed contributors here. The mere fact that you are maligned by so many proves your value. 🙂

+1. Great idea!

Mark.ca

You just tell me where and i’ll bring my boxing gloves!

Hehe …

Vexar

I think the odds are low that the folks here contain many pugilists. However, I will challenge anyone here to a push-up contest, backflip contest, or foot race.

Mark.ca

Oh no, the gloves are to protect my head while Bill and a few others pound me.

HVACman
Actually, I don’t see most of Tesla’s “competitors” aiming for where Tesla is or caring much where they are going. Every month we see another global seeking their own EV voices and niches that fits their internal culture and their market-base. EVs are proving to have some many competitive advantages in a variety of niches – performance, luxury, AWD, home-charging, autonomous-friendly micro, emissions-free light and heavy commercial vehicles in congested urbania. It is a wide-open global market like the Oklahoma land rush and everyone is dashing to stake out their own territory. Example: GM’s first long-range EV – the Bolt – is an entirely different design than the Model 3 and designed for an entirely different market – the urban global people mover and future autonomous urban fleets. And GM’s next-gen BEV plan is not a model but a modular EV platform (EME 1.0) that GM can build anything from a low-cost low-profile BEV sedan to a high-end 7-passenger ESUV. BMW will build ICE, PHEV, and BEV versions of their entire line, interchangeably built on the same line. VW has the ID, which will have sedans, CUVs, and even a next-gen Beetle van, plus their Porsche performance line, Audi luxury… Read more »
Dave

I hope the Bolt Platform is not GM’s long term platform (actually I know it isn’t) Bolts platform will see 2 more vehicles, and then be put out to pasture… GM’s long term EV platform is in development, and a prototype of it was underpinning the Buick concept shown in Beijing. The Bolt platform can get longer, but not wider is the problem. The new platform will be wider, and I think highly likely will be built at the Lansing Grand River plant as they retire the Camaro in 2021. I think Lansing Grand River is going to be EV central for GM (in addition to Orion). Write this down and see if I am right in 2 years or so when they make announcements. :)~

Dan F.

Yes and (unfairly?) they will, per current law, have $7500 tax credits availablr while Tesla will not.

MDEV

And BMW i3 ?

Shane

If I could get an S for $59,900 I’d move up.

St John

I got a model S in the move ember 2016 with 31,000 miles on it, like new condition, $53,000 from Tesla. I bought that instead of a model three. Absolutely love it. It’s an S – 85.

Chris Raymond

I reserved and canceled twice, so I’m skewing the results.

scott franco

Stop that.

Terawatt

Since your cancellations exactly cancel out your reservations you’re actually not skewing the results.

Mikael

Of course it is skewing it. If I made a few hundred thousand reservations and cancelled them suddenly the cancellation rate would be over 50%.

Or to make a simple example:
Reserving, then cancelling, then reserving = 50% cancellation.
Just reserving = 0% cancellation.

Same end result, very different statistics.

Dave_the_braver

And so the question arises, is someone gaming the system with recycled reservations and cancellations. The question is moot. It doesn’t matter to Tesla until the wait-list is fulfilled. Once Model 3s are on the streets and in the stores, the reservations will balloon.

Pushmi-Pullyu

“Since your cancellations exactly cancel out your reservations you’re actually not skewing the results.”

I see that statistics, and even basic ratios, are not your forte.

Bob

“German company said it believes Tesla could reduce its price significantly — as low as $28,000”

You shouldn’t conflate the $28,000 Cost estimate, with a sales price. The $28,000 doesn’t include profit…

Bob

What Robb said… 18k in parts 10k in labor +25% profit =35k… All in line with what Tesla has stated from March 31…

MaartenV

Nearly correct.
It is $18k in parts + $10k in production costs + $##k in overhead costs = break even price.

If $##k is smaller than $7k than the $35k Model 3 is profitabel, if it is bigger, the sale of a Model 3 base creates a loss.

Saying there is room for a large discount is showing zero understanding of basic accounting.
That Gross Margin is to pay for R&D, SG&A, Interest, and taxes.

Bob

Musk is a physics guy, will always comment to the theory of what is capable (25% profit ignoring real overhead).

I don’t think the Model 3 will ever be priced less than $35k. If demand was wavering they would just add value to the 35k price. E.g. make premium options included, like they have done with S and X.

theflew

You’re missing the cost to cover warranty repairs, sales cost (those sale centers in malls aren’t cheap). That’s the issue when Tesla says 25% margin. It’s not comparable to what others when comparing margins.

God/Bacardi

“COULD” is the keyword there…Huge grain of salt especially considering you still have to buy the $5000 PUP option…

Cavaron

If I Look at the chart, July 2016 looks about to be 65%. Back then there have been the 400,000 reservations. So 100% today must bei something like 615,000 reservations. If 8% of that are deliveries, that would be 50.000 units, which doesn’t add up.

Based on the sales chart of insideevs, 8% sales would be the 20,000 Model 3. So 100% would be 250,000 reservations. That could bei right for US only. 23% would be 57,500, which would leave 172,500 US reservations in Teslas books. Not too bad for the US market.

Scott B.

This data point is really pretty trivial, in regards to the big picture. Of course some people are going to back out and want a refund on a vehicle that still isn’t really available. Eventually, everyone in the market for a new vehicle will eventually have to give up waiting and buy something else. If the car was readily available, not only would 23% of reservations not be canceled, but the number of additional reservations/purchasers would significantly exceed this. The reality is that, regardless of production capacity, the Model 3 will be sold out for a long, long time.

Terawatt

Maybe. You’re just postulating the long-term demand. I agree that it seems plausible – fewer ought to cancel if not for the long long wait, and more ought to order as well. But I’d say you’re lacking some detail in going from adjectives to a clear answer to whether Tesla will find on average 42k new buyers a month – for half a million a year. If they can find nearly that they should be ok. If they only find 15k a month they’ll find themselves with massive overcapacity.

It’s still a crazy adventure and fun to observe.

Dave_the_braver

If this many people reserved sight unseen, then more will reserve when they can see the car and test drive it. The reviews have been very positive.

Asak

Not necessarily. It could be in a year or two when Model 3s are commonplace that the novelty has worn off. It’s dangerous to extrapolate things like this. There have been plenty of products, television shows, etc that got off to a strong start only to fizzle out and turn into a bust. It’s happened with cars before too.

Mark

I’m one of those that cancelled when Elon made those comments about how far away the standard range model 3 would be. I was a non-owner, line stander that ordered after hours of waiting in line in the Bay Area. I’m not sure they’re really capturing all of the cancellations since I paid with credit card that no longer exists since its been over 2 years since the preorder was made. Tesla allows the money to be refunded to a bank account with ACH or you can provide them a new debit card number for them to deposit the refund to. Also, out of the group of friends and co-workers in my circle, I know of 5 people that pre-ordered 1 to 2 cars each. And 3 have already cancelled, and they had 2 reservations each. Of course, just my small sample of data, but I would have expected a real cancellation rate of closer to 50%, which should still not be an issue for Tesla as they ramp up and just start selling $50k cars to people that can afford them.

Assaf

Thank you for your firsthand experience report, and sorry that you had to cancel.

I think Musk et al. are really misreading how much damage they are causing Tesla with this continued disdain of non-rich customers who like you, have stood in line, put their money where their hopes are, only to hear that they are Tesla’s least important and least favored customers, just because they have a bit less spare $$.

It’s classic case of narrow thinking and misconceptions, blinding otherwise super-smart people to some very obvious long-term business (and ethical) principles.

Dav8or

Not only people with not as much money as others, but also people that have plenty of money, but think it’s absurd to spend $50,000 on a car.

MaartenV
I don’t know why you think there is any disdain from Tesla’s side. Tesla has announced to make a $35k car that would be better than any other $35k car you can buy. They have had numerous problems to get the production up to speed, and they are still not there, that is not a reason to accuse them of disdain. Tesla / Musk has said that as soon as they reach the minimum volume on which the $35k car is possible to make without loosing money, the full focus of Tesla will be on getting the cost down to a level that they can make that car for $35k. I don’t see any disdain in working as hard and as fast as they can to honor the promise of a $35k car, better than any other $35k car. Look at what Jaguar just did show with their I-Pace, a less attractive car than the Model 3 (I sat in an I-Pace), but for a 60% higher price. The competition can’t meet Tesla in price and quality in BEV, and not even in old school ICE cars. It looks like Tesla is taking huge risks to make the $35k base… Read more »
MTN Ranger

I’m really starting to doubt that statement “best $35k car you can buy”. If you took away all the premium package features, the Model 3 is pretty bare bones. Even with the package, it still seems basic to what you can get with the German competition. My wife isn’t impressed with the car at all, she really thinks I overspent and that the car doesn’t feel premium at all. Other than the 1% of the population that are EV enthusiasts, there are many, many more like her. If the price falls to the high $20k for base, that may be more reasonable.

Mint

Obviously your wife cares about interior bling, but if most people thought like her, the S and X would have a quarter of the sales that they currently do.

I have a 2018 Leaf, and aside from a Tesla, I wouldn’t want to commute in any other car below $50k, maybe even $100k. The instant throttle response, quiet yet strong acceleration, and ProPilot (okay, that’s not included in the base Model 3) make me miss it any time I drive something else, even when it’s a BMW/Merc/etc. My wife loves driving it too, despite the so-so interior, cloth seats, and many other flaws.

When it comes to handling, acceleration, and running cost, what is better at all three at $35k? I think it’s a well justified claim. There are many flaws, but it nails the core parts of a car.

MoMac

Don’t you think it would have been better for Tesla to have been more transparent about configuration/delivery priorities before people stated standing in line on day 0?

People took time off work. Some camped overnight. Only to find out that by the time their base Model 3 would be delivered, they would only qualify for a $3,750 (or maybe just $1,875) USA federal tax credit.

Collectively the “queue standers” gave Tesla a lot of free publicity. Yet, based on what we now know, it as absolutely pointless to stand in a queue in the first place.

Pushmi-Pullyu

I submit that it was wise of Tesla to remain flexible on delivery priorities, so they could shift things around without worrying about whether or not that would result in some people thinking they “broke a promise”.

Tesla locking itself into a specific ranking of priorities would have been a very poor business decision.

Mint

Higher configurations have always come first with Tesla. They also stated before the launch that previous owners come first, so they knew they were lower priority. During the launch, he was clearly poking fun at himself about the end-of-2017 target for first deliveries.

And what is accomplished by having a base model buyer the tax credit? There’s a limited number, so if one person gets it, the other doesn’t.

Dave_the_braver

This is true for most cars. One couldn’t buy the base Mustang for over a year after its introduction. If if they think they want the base, most people do not buy it anyway: they want a different colour from black, they want the better sound, they want AutoPilot, or larger wheels.

Dave_the_braver

… and considering that they moved the timeline up by over a year from the original before the huge response in reservations!

Asak

Personally I think a $35K car is too expensive. In the end it’s just a stupid car. In my case it will just sit in the driveway 95%. It’s not really worth spending that much for the rare experience I get when driving it.

Others who maybe drive more might consider the situation differently. For me a $7500 used Leaf makes a lot more sense.

Pushmi-Pullyu

“I think Musk et al. are really misreading how much damage they are causing Tesla with this continued disdain of non-rich customers…”

It’s really sad to see how many comments are written from the viewpoint of wishful thinking. That is, people wishing they could get a Tesla car a lot cheaper than it costs Tesla to make it.

If Tesla were to sell cars below cost, as you seem to be advocating, then it would soon go out of business, and how would that help anyone — rich or poor — get a Tesla car?

Dave_the_braver

Its below cost at low production rates, but above 5k/week, event the base car becomes profitable. That is why the base is not offered at the start of production: simple economics.

Mister G

Tell your friends to cancel today I’m in central Florida reserved on April 3 2016 and I’m tired of waiting. CONNECT THE DOTS ON CLEAN AIR WAKE UP FOLKS

terminaltrip421

florida. that helps explain it.

LS

> I’m one of those that cancelled when Elon made those comments about how far away the standard range model 3 would be.

Can you elaborate? 2 years ago you decided you wanted the car. Now you don’t want it. Why? Did you decide to purchase something else? The car didn’t change in that period, it has just been delayed. Do you no longer need a car?

Asak

Maybe he needed a car in the next couple of years to replace an old car. Now after two years it turns out it could be another two before it’s delivered and the price will be higher due to no tax credit.

Mister G

I hope more cancellations come in from USA, non tesla owners, date range March 31 2016 to April 3 2016. CANCEL NOW CANCEL TODAY I’M TIRED OF WAITING LOL CONNECT THE DOTS ON CLEAN AIR WAKE UP FOLKS THANKS FOR CARING

Drucifer

You were fine until you suggested that they sell cars for $28k, which is marginal manufacturing unit costs. Back to accounting 101 for you.

Bob

One more note on the recent wave of cancellations. Over the last 6 months there have been a lot of ads on Craigslist for selling reservation spots, the lowest being ~$300 + the $1000 deposit. I’m sure many of the line standers were also wearing Jordans… and are now giving up on thier dream of making money from thier early reservation.

Pushmi-Pullyu

You can’t “sell” a reservation. It’s in the fine print of what Tesla sends you that reservations cannot be transferred without express written permission from Tesla. All those CraigsList ads are either scams or are put up by people who didn’t read the fine print.

Info here, but be sure to read the comments:

https://insideevs.com/selling-tesla-model-3-reservation/

TeslaPlease

In my SF Bay Area there are 30+ pre-owned Model 3s out there. I do believe there has been much speculation on Model 3s (people buying several and trying to make a profit).

I do believe a large percentage of those who waited in line and registered were expecting the $35K model to be available.

This is no different than a person seeing a kickstarter for a $800 OLED TV when the avg transaction price is $2000+. It was hard to believe one could get type of BEV for $35K with this sort of range.

I still believe it cannot be done and in 2018 Elon knows the probability for this $35K vehicle being offered. Prediction: A small batch of $35K vehicles being built followed with a series of price increases up to $42K (base).

Dave_the_braver

I disagree. $35k cars will be available, but one will have to bite your tongue not to agree to some of the options. EM had estimated the average price would be $42k, but I suspect that will rise as people buy EAP and FSD in the future.

Shane

I have considered cancelling several times. Not needing the $1,000 right now I decided to make my final decision when (finally) I get the invite to configure. Factors playing into my decision: status of the 60 kWh Leaf, availability of the tax credit, what Tesla offers me/what I can get for my trade-in, etc. I am super-disappointed in the dash, the cost of AWD, $9,000 for batteries that I don’t think I will need — just to get $7,500 back from Uncle Sam — and the fact that I have to buy $5,000 in options just to get power seats and a decent sound system. Plus I have never been a fan of “vegan leather.” Where I come from we call it vinyl.

Elon might be able to land rockets on their feet, but the Model 3 roll-out, for me at least, has been less than spectacular.

Dave_the_braver

Fair enough. I want SR/AWD, so I am sitting on my invites. I fully expect the base sound will be fine, and the main features intact: safety, efficiency, quickness, OTC updates, superchargers, and the ability to upgrade to EAP or FSD at any time OTC.

trackdaze

Always figured that there would be about 1/3 rd of reservations that would cancel when it came time to stump up the cash. Its called human nature.

The question is what Tesla are relying on internally.

Dave_the_braver

They really don’t need to rely on it … they have more reservations than they can fill … ask them when they (if ever) get to the end of the waiting-list.

trackdaze

They would have at least one business and marketing analyst tracking daily, weekly, monthly and anticipated cancels and take up rates on configuration invites.

All patching into product, config invites and financial plans. They would have an expected cancel rate and its most likely above 23%

spinner

I cancelled because I’m in the UK and he said that RHD models would be released long after the LHD. I would still like one but I’ve now bought something else so now for a few years but by then hopefully there will be plenty of options.

SJC

People have been patient when it comes to Tesla.

MoMac

While the tear-down was performed on a long-range Model 3 with the premium interior, I don’t think it is fair to assume that $28,000 cost was based on a vehicle with those options.

I wouldn’t easy for the German engineering service provider (that came up with $28,000) to interpolate or calculate an estimated cost for the smaller battery and adjust for the premium package cost versus standard as well. I would think that more people would be interested in Tesla’s cost of the base version.

This article seems to assume that they didn’t bother to do that.

The Wirtschafts Woche article is totally ambiguous on this matter.
The article states, “The material and delivery costs of the $ 35,000- $ 78,000 car are only around $ 18,000.” But it is not realistic that the material costs of the base $35,000 car is the same as the $78,000 version.

So it is totally unclear whether they adjusted the costs to come up with the cost for the base version or whether it was the cost for with the long-range battery and premium options.

Pushmi-Pullyu

That appears to be so vague as to be meaningless. “…material and delivery costs” may not even include labor costs, let alone overhead, warranty, and sales costs. There is also the “cost of money”; that is, the interest paid on loans funding all of that. So it seems rather pointless to even talk about it.

Just my opinion, of course.

doggydogworld

Teardown reports always show costs on the base model, then provide estimates of the most common options packages.

Nix

And yet no base model is available for teardown. So are you claiming they based their numbers on a car they didn’t have?

menorman

Seeking Alpha must be ecstatic today.

Victor

i just cancelled my reservation last night. (Day 0 line waiter in san francisco ca)
I was waiting for the P model 3…but once they released the specs and price, paired with the other compromises of the 3, i knew that the car wasn’t for me. Im looking at an ipace now…or maybe a used model S. I already have a rav 4 ev, so Im in no rush for another ev.

James

You do realize an iPace is $70k, right?

jahav

And Model 3 P version, which Victor was waiting for, will be $78k.

MoMac

The price is negotiable, to a certain extent.

Pushmi-Pullyu

Sure. If you wait until the end of the model year for an I-Pace, or any other car from a legacy auto maker, the price can be negotiated much lower. But then, you’ll have to settle for what’s left in inventory, which is likely to be cars with trim levels and option packages nobody else wanted.

Brian

I think they will sell out at full retail.

Dave_the_braver

And that is the base iPace. Unlikely to be available from day one. Also, very limited numbers being produced. Check out this review: http://www.motortrend.com/news/2019-jaguar-i-pace-review-london-to-berlin-electric-jag/

Dave

Base I-Pace can be ordered now, they are building all configurations right from the start… Jaguar has a strong capital structure, not living and dying by monthly cash flow

Mister G

Thanks for canceling

MaartenV

You do know that the Jaguar I-Pace is a smaller car with less performance and less luxury for a higher price than the Model P3?

Dave

Who are you trying to kid? Any Tesla with more luxury then I-Pace? HAHA!!! How is the Model 3p off road? I-Pace smaller then Tesla Model 3…. Dude, please stay off drugs…

terminaltrip421

in what world could there possibly be “less luxury”? simply having an instrument cluster puts most cars on superior footing when it comes to luxury. unless of course you consider having a car that can drive itself into stationary objects luxury.

Dave

Luxury is the combination of materials and surfaces used inside. Just for instance the HVAC controls and steering wheel… Its all about materials and touch..

Bill Howland

To my knowledge Tesla themselves have never proclaimed their vehicles ‘LUXURY’ vehicles. The bare bones “S”‘s I test drove certainly were not. Yes it had the big touch screen. But traditional luxury buyers care about other accoutrements.

Brian

30k I-Pace world wide. They will sell out at $70k for two years in my opinion.

Dave_the_braver

Very likely, especially in EU. Check out http://www.motortrend.com/news/2019-jaguar-i-pace-review-london-to-berlin-electric-jag/ :
Difficult charging scenarios, poor efficiency. Smaller size may suit, and SUV style. Knobs and buttons do not luxury make. I would rather have clean elegance myself.

Murrysville EV

I cancelled in March after the rework reports came out, along with field reports of poor quality. Moreover, I didn’t want to buy a $50k car, and I’m really turned off by the center display and the safety risks of embedding the cruise and wiper functions into that display.

Too much money, too much drama – at least for now.

Dave

2 guys that work for me will eventually cancel, as they really cannot afford to buy a car over 30K…

Dave_the_braver

Tell them to do a cost over car-life analysis, including fuel, insurance, maintenance, etc. They may be surprised.

Bill Howland
Higher insurance costs plus higher costs after warranty would be SURPRISING to you. This is why I sold my Roadster 12 months after the warranty ran out. I simply couldn’t afford the on-going maintenance and repairs. The Brand New ELR I swapped it for so far has only cost me tires and wiper blades. But news reports of ‘problems’ here and elsewhere seem to indicate the new ‘3’ will even have more continuing maintenance, since these new Teslas are having troubles the Roadster COULD have had, but never did – although it should be cheaper to fix than an “X” or “S”. I took your advice and did my own ‘Car-Life analysis’ and got rid of it. As far as the ‘green ‘ factor, my Roadster used more Gasoline than any other vehicle I’ve ever owned – being regularly flat-bedded to Columbus, Ohio and back (I’m in Buffalo), plus plenty of extra gasoline used by plenty of ‘Ranger’ Visits in their Tesla – labeled SUV’s, from either Boston, or Green Bay, Wisconsin. The Car was only electric while I was driving it. Now there are some Teslas in moderate climates that seem to survive nicely. But I haven’t heard any… Read more »
Dave

I wonder if this is why Musk did not want to answer the specific question about reservation holders on the earnings call?

Get Real

And I wonder why “Dave’ constantly posts comments on InsideEVs that are indicative of a shorter.

Dave

haha! you are at it again… try attacking my messages and not me… With the name “Get Real”, lets get real… huh…

Pushmi-Pullyu

After awhile, it becomes clear that the reason for someone serially posting FUD is because that’s his — or rather, your — agenda, and not because you’re merely misinformed.

If Elon was annoyed at questions about the rate of reservations vs. cancellations, it’s because such questions — just like your comment — are not actually questions, but “concern troll” FUD. There is always going to be a certain percentage of cancellations, but anti-Tesla trolls try to make it out to be somehow “bad” altho it’s absolutely expected. I can certainly understand that Elon would get tired of explaining that again and again and again. And again.

A 23% cancellation rate is lower than expected, so that’s actually positive for Tesla. It’s too bad this article seems to imply the opposite.

Dave_the_braver

Because it isn’t really relevant. They are production constrained, demand is high. It doesn’t matter whether there are 400k or 1M reservations, they can’t fulfill them immediately, and they are going as fast as they can. Ie it makes not difference to their problem: ramping as fast as possible.

Miggy

Note that they are only talking about USA sales/deposits/refunds as shown in the graph.

Brian West

I canceled my M3 order when the ugly dash was revealed. I ordered a Model X instead.

Pushmi-Pullyu

This is great news!
🙂 🙂 🙂

Strange to see this article written as if 23% of Reservation holders canceling (and getting a refund) is a bad thing! The 23% figure was reported awhile back, so it’s surprising and — from the perspective of Tesla’s business — very encouraging to see that even with repeated delays, there hasn’t been an increase in cancellations. Some years back it was reported that there was a 25% cancellation rate for the Model S, so 23% is, if anything, better than expected!

Go Tesla!

terminaltrip421

yep. I’m sure Tesla shareholders are jumping for joy over the 23% figure.

Dave_the_braver

Its not relevant, and is expected. Not a problem.

Mark W

I don’t think 23% should be surprising to anyone. Given all the delays, and the fact that the $35,000 car will miss all incentives if it is ever delivered I would think would cause well over half of the placeholders to cancel.

Ahhm

I think there are many Europeans who don’t want to wait one more year before they get the car. It gets a bit annoying watching all the deliveries in USA and Canada but none over here…
Many other promising EV’s coming this year here as well.

Dave_the_braver

Yes, I feel for you. It will come, and then you will (1) get a better car with upgrades, and (2) can compare to the alternatives and make an informed decision. So that is a benefit. But waiting is hard.

scott franco
This is interesting (and by the way a hour or so late — I read this elsewhere). However, the more interesting number is outstanding reservations. Let’s do some simple math. If Elon achieves his 10k/week dream for Fremont production, that is 520k per year, and then the backlog gets cleared. At 5k/wk, that gets doubled, still not unreasonable. If Tesla clears the backlog (reservations) within 3 years, which is similar to what they did with model S/X, then there is not going to be a reservation list, and you won’t know if some of the reservation refunders came back and just bought the car. At that point, total sustained sales is another matter. Does the M3 get cost reduced? Apple didn’t succeed by having a price war. $35k is a good price floor for the M3. At that price, perhaps a small price premium over “similar” models, and perhaps not (depending on your definition of “simiar”). The M3 is not JUST another car. It is completely different than anything being offered out there. I have both an M3 and a Bolt. As of last weekend, I have taken both to Los Angeles from San Jose (About 300 miles). What’s the… Read more »
Dave_the_braver

Thanks for the hands on review. Bolt is good for local busy-work.

Asak

Yeah but in the end it is just another car. Last year I drove on a road trip from Florida to California in a rented Toyota Camry. I regularly pulled into a gas station and restored 300 miles in about 5 minutes, maybe 10-15 if anyone had to use the restroom.

Making long trips on electric may matter to EV enthusiasts like you and me, but most people just think we’re idiots. To the average person being able to recharge relatively quickly, albeit still slower than you already can with a gas car, doesn’t strike them as particularly remarkable.

The end goal for EVs is that people consider them just another car, which they can just drive without noticing a difference.

Depending on what you use the car for hatchback vs sedan is not a paltry difference either.

arne-nl

Another data point: I reserved mine on 1 April 2016. I did not cancel my reservation and do not plan on doing so.

Mister G

Have you received a configuration email?

arne-nl

No, I’m in The Netherlands (hence the ‘-nl’ suffix). Estimated delivery is beginning of 2019. My Leaf lease ends july 2019 and with some further delay likely, that will be perfect timing.

Sustainable2020
This is a BS article. I give you a few other reasons, off the top of my head, why some deposits have been refunded that are certainly a part of the 23%: 1) Obvious one first, some desposit holders have died, become severely injured or ill. Over a two year period of time with over 400k people, it is statiscally likely many thousands of folks are not capable to drive any more at this time n therefore they got their deposits back. 2) Another obvious reason is that some precious deposit holders simply don’t need an additional personal vehicle anymore cause they now have a company car, use only mass transit, use their bike/walk, etc or get this…they’ve retired. A myriad of reasons over a two year period of time occur why no new vehicle is needed or wanted….again many thousands for sure in this camp too. 3) Still many other thousands couldn’t wait or were enticed by the still free supercharging of newly manufactured Tesla model s n model x vehicles. They are both great Teslas, that if one can afford, would be well received by many model 3 deposit holders. 4) Some have heard speculation about the model… Read more »
doggydogworld

Your #3 doesn’t count as a cancellation because those people apply their $1000 deposit toward the S or X.

Sustainable2020

It does count cause it must be refunded to deposit holder before purchasing another Tesla. Those are two completely separate transactions and I’m sure that’s what Tesla does. Regardless, the fomer model 3 deposit holder has no skin the game for a model 3 as a result.

Vexar

If I were trying to promote my credit card analytics service, I’d certainly try to wiggle “Tesla” into the news bite. I was just telling someone yesterday that Mark Twain was famous for saying there are three kinds of lies: lies, damnable lies, and statistics.

Um… where did they get the data? Who the heck has access to my credit card transaction data anyway? I smell a privacy breach!

doggydogworld

Credit card processors give vendors lower fees in exchange for data collection rights. The data is anonymized.

Vexar

Well, the question remains, then, how they have credible information. It couldn’t be anonymized completely or they wouldn’t know it was going to Tesla.

Terawatt
Ridiculous. First $28k cost to build is treated as if it’s a price (“making up for the loss of the tax credit”) and then, even though they’ve already assumed an $18k material cost for the entire car, we’re told this is the long-range version and the base would be significantly cheaper. But in getting their low material cost estimate they’ve assumed a low battery pack cost, maybe just $100 per kWh. If so, shedding 30 kWh would only cut costs by at best $3k. And that’s probably optimistic since at the pack level the smaller pack will be more expensive per kWh than the bigger one. But worst of all is the idea that it doesn’t matter if long-term demand isn’t there, because I’m the short term Tesla is supply-constrained. It matters a lot. The investment to get to the kind of capacity Tesla is shooting for – half a million cars per year – is huge. The way this looks, Tesla won’t even be able to get up to full capacity before they run out of demand. And then you have an Airbus A380 serving a route that a Fokker 50 or a regional jet should have been handling…… Read more »
Mikael

The headline is missing a “in the US”. You are getting sloppy again in your headlines….

You would never have an article of German EV sales in June and give it the headline “EV sales in June” yet you manage to do the same mistake over and over and over again when it comes to articles only related to the US.

It should not be this hard to do such a simple thing and remembering to do it on all articles. You can even put up a post-it on your screen to remember to always write the region the article is talking about.

The vast majority of our readership is U.S.-based, we are U.S.-based, the Model 3 is only currently selling in the U.S. (a bit now in Canada). It wasn’t and is never intentional or in an effort to trick people. We are racing to get stories out and assumed that people would realize it was a U.S. story. We should never assume, of course. We also can’t and don’t include all the details in the title.

With all of this being said, the constant criticisms and tone of your messages here against the writers, editors, and design of Inside EVs is not appreciated. There is no reason that you can’t offer up a correction in a helpful and nice, non-attacking manner. Please know that we are always trying our best to be diligent and not make such oversights.

Thank you for pointing it out. I fixed it.

ffbj

I think it hardly matters as they have so many reservations, and if the cancellations were for the base model all the better for Tesla as they make less money on that model. I can certainly understand the chagrin and disappointment from those who did not get what they expected to get. It’s the main reason, when this came up, that I assured Base model 3 people that they would be shunted to the end of the line by virtue of the vehicles not being made until the last dog was hung.
It was pretty obvious that that would be the case, though hope springs eternal, often hopes are dashed, especially false ones.

I might add that RH steering, irrespective of options, model 3 cancellations would hardly matter since those probably won’t be made for another 2 years anyway, until Jan. 2020? So if you post that 15% of cancellations were from perspective buyers who needed RH steering, cancellations seem inconsequential.

Scott

I cancelled mine for a Model X instead. The Model 3 is the Ferrari for the middle class. As with most Ferrari’s there is at least a 2 year wait. Musk wants to be known as the battery guy vs car guy. With the Gigafactory his battery costs will be lower than the competition. The other manufacturers will have to pay middleman battery companies which will hurt their profits. The middleman battery companies may not be able to keep up with demand. The other car companies will be burning through a lot of cash to build a whole new car infrastructure.

floydboy

Meh, call me when it gets to 83%. Then I can get one sooner.

ModernMarvelFan

23% is lower than I expected. With the delay of base model, I expect the rate to be near 50%.

So, that means we still got more than 350K reservation left and new ones coming…

Don Zenga

This is perfectly normal. Many expected that the base model will sell for $35,000 by June and they can buy it and make use of $7,500 Fed rebate. At the end of last month, its clear that Tesla will likely hit the 200,000 mark by June with the base model being few months away.

Every one cannot afford a $44,000 car with just $3,750 rebate.
So they want their refund.

Nix

So what is the conversion rate for all the other car companies with 6 digit reservation lists?

Oh, right.

Jean-Marc Blanchette

Maybe simply some of us can no longer finance that dream car of ours… Life just moves on. Can I please get my thousand bucks back now? 😉 Thanks. Back in a couple years! ♡

Meeeee

I did not reserve this electronic automobile.