Why Is Tesla Taking Its Time In Revealing Model 3?

Tesla

NOV 3 2016 BY TESLAMONDO 27

Tesla Model 3

Tesla Model 3

ORIGINAL TARGET FOR TESLA MODEL 3 NOW SEEMS LAX

The Model 3 wasn’t supposed to achieve big-volume production until 2020. Then Tesla shocked everyone this spring when it shortened that to 2018.

Model 3

Model 3

But just imagine if the original timeframe were left intact. We’d be nursing ourselves through three more years of nothing but S and X. Seems like an awfully long stretch of nothing new, eh? It would strain the attention span of the average car buyer and allow myriad rivals to tiptoe from back burner to front. For Tesla devotees, those three years would have felt like three decades.

When Musk said the 2020 target wasn’t ambitious enough, it sure seemed like bizarre masochism. Not anymore.

Meanwhile, the woolly mammoth in the room is still growing. What mammoth? The number of Model 3 pre-orders. The nose-picking press seems to believe the preorders stopped coming in around 400,000 and have since ebbed to 375,000-ish due to people defecting to Model S or just giving up entirely. Well, TeslaMondo thinks the orders never stopped coming and now total at least 500,000. Tesla isn’t keen on discussing it because it’s a big, hairy creature at this point. Best to hang a sheet over it and focus on work, not slaying the beast.

This might also explain why Tesla is taking its sweet time in revealing the Model 3 interior. Does the company really need more pre-orders? Does it want to make the current S and X interiors look rickety by showing off the next generation interior? No and no.

Spy photographers will have a heck of a time trying to peer inside the Model 3, but that’s where the money shot is, or soon will be. The hindquarters will attract some attention too, as people wonder about Tesla’s casual vow to enlarge the trunk opening so we can fit our fantasy lifestyles inside.

Editor’s Note: This and other Tesla-related posts appear on TeslaMondo. Check it out here.

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27 Comments on "Why Is Tesla Taking Its Time In Revealing Model 3?"

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I doubt the orders are 500k. The total Customer Reservations number in the quarterly report is over 600k and that would put M3 reservations in the 410k-430k range. They keep putting “cars in transit” that are paid for into Customer Reservations at the end of quarters (which they shouldn’t) – and that bolsters the CR number and can throw off analysis. Just print two numbers. Actual Customer Deposits without inclusion of cars paid for – put that into another liability line item – and then match that with Accounts Receivable. Simple accounting – for a company that needs to keep simple accounting under a non-transparent lid.

I took a closer look: 690,364k – or almost $700M for the Customer Deposits. Maybe, just maybe, it could be slightly closer to high 400s right now. Just keep in mind – fully refundable and no requirement to complete the transaction at all. To do it right, should have made them non-refundable after 60 days. Let someone have a cooling off period if they want to surely buy a car but don’t let them make deposits if they are just trying to make things look better (ie. stockholders).

“To do it right, should have made them non-refundable after 60 days.”

I don’t see any upside for Tesla, for making the deposits non-refundable under any conditions.

With the threat of the deposit not being fully refundable, Tesla never would have gotten anywhere near 400,000 reservations, and wouldn’t have the bragging rights for the highest number of reservations for any product, ever. Making the deposit non-refundable would also be guaranteed to get a lot of people seriously ticked off at them. $1000 isn’t chicken feed!

Plus, Tesla gets the interest on all those deposits, whether or not they are eventually refunded. So how is a refundable deposit for a mere reservation — not an actual order — ever a bad thing for Tesla?

That’s exactly what’s wrong with business today…management no longer cares about the customer, he is just a number to satisfy Wall Street. Ask the Leafs owners who got stiffed by Nissan with the lowest resale values in history because Nissan wouldn’t offer a battery upgrade path for it’s older cars. Tesla is driven by a higher calling, Nissan is just after screwing their customers.

That makes no sense when you think of Musks track record. He’s not there to turn a huge profit. All of his companies are in the red and he sinks huge amounts of his own money into them for one thing. To change the world. He is not a wall street goon, he’s a visionary.

Another interesting negative thing about the LEAF (well, in the UK, anyway). My friend has one and it is coming to the end of its 2 year lease shortly. He is trying to decide whether to give the 15k mile LEAF back and lease a new one or pay it off and keep it. The latter option will cost £12k. Used LEAFs of the same age/condition/spec are selling for £7-8k. Not a hard choice! However, that isn’t my story. He got a quote for the final required service. £149 for a ‘full’ one. But then learned that ‘checking the brakes’ was an extra £50. Surely ‘checking the brakes’ comes under any sort of service, let alone a full one?! And, according to the official service schedule, yes it does. What the Hell is going on?! Sounds like Nissan is trying to pull a fast one and claw back some of the lost ICE servicing revenue they are missing with the LEAF, to me.

“Deposits should be non-refundable” — ridiculous Bonaire. I don’t imagine you’ll be running a company any time soon.

The obvious math leads to the current deposit number being in the 450-500K range.

The reason Elon’s not talking about it is that he clearly realizes that they’re now beyond their first year’s production for any new deposits.

So, why hype something that won’t be available until 2019 for new reservation holders??

To make a serious discussion out of this, I’d like everyone’s input on the word “preorder” and if it applies to what Tesla is doing with the Model 3.

I see it this way: Customers are putting down a deposit so they get a place in line to order the Model 3 later. I’d consider a “preorder” to be paying for the vehicle before it is released to the market.

Unless a select few who have a deposit down for the Model 3 have already been contacted by Tesla to customize and order their vehicle? If so, that deserves a separate article in itself on this website.

You aren’t having a serious discussion, because Tesla NEVER calls it a “preorder”. You are just being pedantic over TeslaMondo’s word choice, and that’s not a serious discussion. That’s just stirring the pot.

If you are confused, please see the actual reservation agreement, which clearly states that a reservation “does not constitute the purchase or order of a vehicle”.

https://www.tesla.com/sites/default/files/pdfs/model_3_reservation_agreement.pdf

You’re right. Tesla doesn’t call them “pre-orders”. Tesla CEO Elon Musk goes a notch further and calls them “orders”.


“276K Model 3 orders by the end of Sat”

Another deceptive phrase used by Musk include “Implied future sales”

I doubt the reason Tesla hasn’t revealed the production intent version is because they need to shut down “pre-orders” and “implied sales”. More likely – it just isn’t ready yet. The “pencils down” moment in July perhaps was a little premature.

HVACman said: “Tesla doesn’t call them ‘pre-orders’. Tesla CEO Elon Musk goes a notch further and calls them ‘orders’.” You’re citing a single tweet as the basis for your accusation? Given Elon’s history of making what can be charitably described as “unfiltered” public remarks and tweets, I’d say this is more likely to be a case of careless wording than intentionally deceptive phrasing. “Another deceptive phrase used by Musk include ‘Implied future sales’ ” If Tesla is using, for their own internal planning, a fraction of the reservations — a fraction based on their own experience of converting reservations to orders — and if they have a reasonable expectation of being able to fulfill those reservations — which seems to be the case — then this is in no way deceptive. Furthermore, the term “implied future sales” is obviously a qualified statement. If Elon had made it an unqualified statement, if he had said simply “future sales”, then you might have legitimate reason for complaint. HVACman, your remarks here come across as inappropriately negative and judgemental. Elon is certainly guilty of hype, and even on occasion what I’d call “hype squared” or “hype on steroids”. If you want examples of… Read more »

Are you guys now objecting to direct quotes of Elon’s own words? This is ridiculous.

You are substituting what you wish he said for what he ACTUALLY said. Given that your original objection was “Tesla NEVER calls it a ‘preorder'”, this line of rebuttal is not even remotely justified.

Why would you be surprised …. you are in Tesla’s house???

Every one else is just not cool or ICE shill.

@PP
“HVACman, your remarks here come across as inappropriately negative and judgemental”

according to the vacuous, lie-spewing name-calling self-important self-appointed
P-P-oliceman.. I’m certain that one of the few actually intelligent posters that has ignored you and continues to visit here is concerned at your constantly article-tattoing factually-void conclusion.

Please get your prescription checked. or better yet, consider rehab. You are a menace.

Also, could you be sure that your friend will be willing to report your untimely death Here on IEV, so none of us can miss it, and believe that you’re just changing your screen name again? Thanks.

Are you seriously trying to use twitter as a substitute for a serious discussion (as the OP of this sub-thread spoke of)?

Sorry, but twitter is the exact opposite of having a serious discussion.

I can “pre-order” something on Amazon.com. That means I can order it before it’s actually available, and Amazon will bill me for it and send it when it’s available. But the item is fully described; I am supposed to know what I’m going to get when I pre-order something, at least by Amazon.com’s definition of “pre-order”.

Contrariwise, you can’t pre-order (in that sense) a Tesla Model ≡, and in my opinion it was inappropriate for TeslaMondo to call a reservation a “pre-order”. Tesla makes it clear in their terms of service for a reservation:

“While this Reservation secures the approximate delivery priority within your region, it does not constitute the purchase or order of a vehicle. When the start of production for your Reservation nears, we will ask you to configure your Model 3. Tesla will create an order for your vehicle and you will receive a Purchase Agreement… Until you enter into a Purchase Agreement, your Reservation may be cancelled at any time, in which case you will receive a full refund of your Reservation Payment.”

Again, this is just my opinion. I can see that others might think it’s just a meaningless semantic difference.

Tesla does not really need any more pre orders…
The best thing the pre orders do at this point is let the rest of the auto manufactures know how much business they will be losing by not making a 200+ mile EV…

The purpose of the Product Reveal in marketing is to attract customers. Tesla has already attracted many times more customers from their initial early sneak-peek reveal than they can handle. There is no valid marketing reason to hurry the final full reveal. It is better for them to wait from a marketing perspective.

100% correct.

You make no sense …. to wait for what???

Another Euro point of view

well, when public is shown a $35K car with the looks and the performances of a $50K car rather obviously demand is not an issue. I would see more of an issue to deliver such car in large quantities and not sink the ship at the same time. Maybe this explains the delay, Tesla could still be in some sort of head scratching process about this very issue.

SparkEV-Fiat500-Leased - M3 Reserved - Bolt- TBD

exactly the criticism of Tesla. They have yet to prove as a manufacturer to produce in large quantity–and the limiting factor hasn’t been precious battery capacity either for them but standard supply line stuff.

So, the ramp up on Model 3 is going to be extremely important–not the Gigafactory in which they have control, but the 10,000 other parts and coordination.

SparkEV-Fiat500-Leased - M3 Reserved - Bolt- TBD

Everyone’s eye will be on the Bolt’s sales for first six months.

Litmus test is ongoing.

I see the Bolt litmus test as a “tide that rises all boats” type of litmus test.

If the Bolt sells strongly, then it is a sign that the EV demand is tightly tied to range. Because the Bolt is otherwise roughly similar to the long list of sub-100 mile range pure EV’s, except for the 200+ mile range. It really doesn’t have anything else besides the 200+ mile range battery that is amazingly outstanding compared to all those sub-100 mile range pure EV’s.

If EV demand is strong for the Bolt because of the 200+ mile range, then that shows that other cars with 200+ mile ranges will also have strong demand. Such as the Model 3.

If Bolt sales are strong, that is a very good sign for the Model 3.

If they can make them…..they may be battery limited at 50k units/year — thus if demand is very strong they may raise the price to cool it off — or other short range EVs will severely lower prices to keep any of their momentum going.

SparkEV-Fiat500-Leased - M3 Reserved - Bolt- TBD

Range anxiety is real.

How many Americans drive to pinning their needle on empty on their gas tank despite a gas station every 1/2 mile in most of America?

With most 80-100mile cars, the real life usability is quite a tight radius. My wife dislikes the Spark because that 20mile difference is huge between it and the Fiat.

Until now, there’s really no EV out there for a true EV that’s a full day car that’s semi-affordable and specs to haul some cargo with nice performance specs for fun driving

I’d call that more range complacency on the part of ICE drivers…