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Tesla Says Model 3 Had 'Biggest One-Week Launch of Any Product Ever' (theverge.com)
An anonymous reader quotes a report from The Verge: Tesla announced Thursday that it has received 325,000 preorders for its recently unveiled Model 3. If it sells every car that's been reserved, the company says it will earn enough revenue to make this the "biggest one-week launch of any product ever." A few days ago, the electric car company was saying it had received twice the number of preorders it originally expected to get. Now it's quickly approaching three times that number, which raises questions about the company's ability to meet its increasingly complex production goals. If it can, it stands to make a boatload of money. Tesla says the number of preorders it has received so far corresponds to $14 billion in implied future sales.
Sounds like the reality distortion field is strong with this one.
Have any other manufacturers done a $1000 deposit, cancel at any time for a full refund pre-launch before? It is hard to know how many paid the fully refundable deposit just so they can have reserve a spot in the line if they decide to get one or even trying just in case they might profit from selling the spot.
I ordered mine. Of course I'm not expecting to get it for 2-3 years.
yes we know that already. Your rocket blasts off earlier than the guy's from amazon, and it can be reused.
My one question is durability?
I mean, 8 years and your battery is almost a brick right?
A gas car you can keep going for 15 to 20 years.
OTH, maybe battery prices will drop by 90% over the next 8 years. In which case, no problem.
She was like chocolate when she drank... semi-sweet at first and then increasingly bitter.
Wow, Tesla is being discussed quite a bit for this stunt! But, most of these preorders will not materialize, I think.
Check out the details at tesla.com (emphasis mine):
If you proceed with the order, we will apply your Reservation Payment towards the order payment. 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.
uhhh, yes?
$14b is greater than $1b
Doesn't mean anything at all unless you account for inflation.
If I had a better job I'd have lined up too. One of the few (only??) benefits of living in Quebec is the hydro power. But I remain carless for now, Montreal is not a very large city and I can still bike around at my august age.
But from all comments, the Teslas seem like quality cars, good for Musk! Shake up the establishment!
Mostly random stuff.
There are a lot of reasons to put the deposit down:
1. Low risk - fully refundable until actually placing configured order. The only risk is Tesla going under.
2. Early Model 3 car still qualify for up to $7,500 US government tax credit. After Tesla has produced 200K cars for US market (including all Model S and X) the rebate drops off fast.
3. With this strong demand, those who put the deposit down will get their cars up to 2 years earlier. First releases of a new model car tend to hold higher residuals as there are no older alternatives.
4. Some may hope to speculate, buy an early car and sell it for profit to those who will pay an extra couple of thousand for not waiting 2 years for the new, trendy car. Once the $7.5K rebate drops off, that's an extra $7.5K value for the person who did get it and is reselling the car to those who can no longer get it.
So, rather that collect 0.25% in a savings account, place a $1000 deposit, with low risk, but lots of potential upside. Why do people think that's crazy?
I don't see how they can call it a "launch". More like announcement that they're selling vapor.
So much for the $35,000 price tag. $14B / 325,000 = $43,000. Even if we assume that half the sales will be for the basic configuration at the bottom price, then the other half would have to sell for $51,000 to make the average price they are projecting. Sounds to me like the $35K version will be completely bare-bones, and you'll have to pay a *lot* for things that come standard in other cars (the Porsche way). Personally, I was excited to get a nicely equipped electric car for $35K. $51K? Not so much.
To me, "pre-order" implies a commitment to buy. That's definitely not the case with this system - it's more like a reservation system. Pay Tesla $1000 to reserve your place in the queue for a Model 3, get a full refund if you decide to drop out of the queue.
Mind you, $325 million in cash flowing into the company is no small thing - that'll help them build up the tooling and other factory-related matters they need to be able to produce the car.
What I find myself wondering is: how much can that demand be sustained? Let's assume that none of the 325,000 people who have put money down opt out when they finally see the production model and have a chance to drive it. What will be the sustained demand once the initial rush has been dealt with? 1000 vehicles a month? Five thousand? Ten? A hundred thousand? That's what's hard to predict, but it's also what Tesla needs to predict - there's no value to the company to tool up to be able to produce, say, fifty thousand vehicles a month if they can only sell twenty thousand a month.
Don't get me wrong. This is good news for Tesla; it's indicative that there is substantial demand for a good quality electric vehicle with a decent range, and a ready-made charging infrastructure. And I'm hoping that the demand is on the higher end, not the lower end, for multiple reasons. But there's still a lot of unknowns (including just how many of those 325,000 will drop out nearer production time); it's too early yet to make a definitive statement one way or the other. Cautious optimism, I think, is the best approach from here...
I'm thinking instead of dumping $1000 on the reserve fee, it might just be better to buy $1000 of tesla stock
At today's price of $257, that would just be four shares.
Yes, you wouldn't get the car reserved, but I'm not too keen on buying a 1st generation car sight unseen. If tesla was offering me interest on the $1000 then maybe, but I think I can make more with the stock.
Thoughts? (and yes, I know, the stock could go down)
"...If it sells every car that's been reserved..."
I'm going to call it here, that less than 100,000 - maybe even less than 50k - actually turn into real orders.
-Styopa
It's not $14b - only $1,000 per car so it's only $350m by the most generous interpretation. Those putting down their $1,000 have NO obligation to ever give Tesla another dime and Tesla has an obligation to return the money on demand for quite some time so, arguably, it's really $0b. Tesla can't book these deposits as revenue.
Why is there an "insightful" mod and why isn't it "-1"? If I wanted insight, I wouldn't be reading
People WANT a car manufacturer to make quality products they stand behind and are (relatively) cheap to own and operate as well. GM/VW/Honda could learn something about what the consumer wants. We don't want expensive mechanical hybrids or miniature cars with 50 mile range.
Custom electronics and digital signage for your business: www.evcircuits.com
True.
However, that misses the point. It's not about Tesla booking the deposits as revenue. It's about Tesla getting an influx of cash - over three hundred million of it, in fact - that they can use to help build the factories and tooling for the vehicle. Yes, in an absolute, strict sense, that cash is balanced by a liability on the balance sheet. But I'd say the odds are that the vast majority of that three hundred million will be Tesla's, up until they start getting ready to deliver the vehicles and ask people to pony up the balance.
It also gives Tesla a reasonably firm idea of how many vehicles they need to make to meet demand. Yes, there's an initial influx of pent-up demand from people who really want an EV but haven't seen sufficient appeal in current models (or can't afford the Model S or X), so it's not a reliable indicator of long-term, steady-state demand, but the fact that they got over 300,000 reservations in very short order, when they expected only 100,000 or so, says that the demand is probably going to be greater than they originally thought.
Overall, I'd consider the situation to be a pretty positive one for Tesla. Time will tell, of course, but I'm comfortable sitting on my reservation for the (expected) 3-4 years it'll take them to reach my market.
Your battery is not a brick in 8 years. That's fucking retarded.
Completely replacing the battery in 8 years will be cheap--it's already not that expensive.
Gas prices won't stay low forever.
...that I've ever seen on Slashdot. And I clearly remember "No wifi, less space than a Nomad, lame".
I will meet you back here in 4 years and then stalk you through every thread reminding you of this prediction. This god awful, hilariously stupid fucking prediction.
Tesla sold more that 50K Model S's last year--and that's a car with an ASP north of $85K. This year they are selling more than 80K Model S's + Model X's (the ASP on Model X's is even higher). And you think they won't manage 50K of a car that starts at $35K? You sir, are an idiot.
Not like an everyday "noone is going to buy iPads" kind of idiot, but like a platinum-level "noone is going to buy these stupid Model T Fords" kind of idiot--the kind that only comes around once every 100 years or so.
lol.
That is all. I just needed to let you know that I was literally laughing-out-loud at this.
Absolutely spot on. It felt great to see one of these asshats with the ridiculous negative hyperboles around here get called out.
Well done.
You win today's internet :)
until you actually deliver the goods, and in a significant volume.
One of the biggest problems with a pre-order system like this for manufactured goods is maintaining a constant supply rate.
Tesla have had 320000 pre-orders, and those people will justifiably want their cars delivered as early as possible; after all, they've ordered them and paid a cash deposit more than a year before the planned start of delivery.
Clearly some of them will have to wait. But at current production rates, that wait will be over six years for some, which really isn't tenable. Even allowing for increased production rates, a two year wait for a car of this size/price isn't going to be good enough. So Tesla could try to ramp up production; try say they have capacity to ramp up to deliver 500k cars a year, so delivering all of the preorders in the first year could be done.
However, the problem then is maintaining the momentum. The pre-orders represent the people who fundamentally want the car and are prepared to pay early and wait. But once those orders have been fulfilled, if your factory is producing 300k cars a year, you're going to need to find 300k more buyers each year, or else cut production.
I agree that Tesla has a fantastic product, and I'm sure that in the longer term there is a market for them to build that many, but you can't just start producing that kind of number of cars from day one because the market is already saturated, and also because they don't have the infrastructure to back it up.
In other words, they're going to need to be really careful about balancing the need to meet those pre-orders in a reasonable time while not flooding the market.
All of the above is without even factoring in the Models S and X, which also complicates things... how much of the production run should be given to those models? Does that eat into the ability to deliver the Model 3 pre-orders? Does delivering Model 3s instead create a backlog in the orderbook for S and X? What ratio of production will bring the best profit figures?
That's a total crock of shit. Literally, every announcement from Tesla has fine print at the bottom disclaiming everything they said (or if it doesn't, it should!).
Is Joe Isuzu running the company? They make a reasonable car, I don't know why they resort to bizarre half truths.
so it's only $350m by the most generous interpretation
Huh. What would be the least generous interpretation?
Sounds like the reality distortion field is strong with this one.
You said it brother!
Oh... wait... you didn't mean Apple's reality distortion field?
Cause 13 million iPhones, even if they were all bought straight up, not "upgraded", and if they were all 128GB models come out to $849 * 13000000 = $11.037 billion.
Last I checked, that's about 3 billion dollars less than 14 billion dollars mentioned in the summary.
And that's if everyone bought the priciest option available.
That's some distortion field to miss 3 billion dollars... probably more.
Mit der Dummheit kämpfen Götter selbst vergebens
I don't know - if you want to be first you need to take a risk. I saw the New Beetle on a TV show over Christmas vacation in 1998 and in January plunked my deposit down. The dealership didn't even have brochures yet - or any details really. Said I was the second person to make a deposit.
Matter of fact - I had to list my favorite 3 car colors up-front on the order because they didn't know who was going to get what. The dealer simply said, "they are going to call me and say 'there are 10 cars available currently in, black, green, red...which ones you want?" hah - I didn't even know if it was going to be Red, Blue, or Manual shift. I had to prioritize my options (I want stick most, red color, but will take blue or green).
Seriously - I didn't know how big/small the car would be. When it arrived they let me drive it around the parking lot with the plastic wrapper still on it. It was like driving a spaceship - totally cool. And I was the only one on the road for weeks - talk about being a rock star.
You want that experience? You gotta be first. And there's no test drive. .
You can *always* sell it. I could have sold it a month later for $5k (+) over what I paid ...but kept it for 10 years.
0$ -- since every person can simply request their deposit back (perhaps because the price of the car goes up or Tesla can't deliver in a reasonable timeframe or ...)
Why is there an "insightful" mod and why isn't it "-1"? If I wanted insight, I wouldn't be reading
complex production goals.
Granted, there are plenty of downsides to imaginary cars, but surely producing them is not the biggest hurdle.
sudo ergo sum
Never blame on ignorance what can be explained by pure white glowing hate. Hate against all those idiots who have anything to do with environmentalism.
Doing something about the climate is bad!
We should keep doing things exactly like we are doing them today!
Don't. Change. A. Thing!