Tesla says Model 3 refunds not outpacing deposits

Lloyd Doyle
July 22, 2018

A Tesla spokesperson refuted claims that Model 3 cancellations are outpacing deposits, stating that, as of the second quarter, net reservations were at about 420,000.

The ratings downgrade by Needham's Rajvindra Gill cut 3 percent off Tesla's stock price before it recovered to $320.23 a share, a 1.1 percent decline for the day.

Although it might be a rather unusually transparent move, Musk has revealed Tesla's new order breakdown from last week to defeat the claims that demand for the Model 3 is flattening.

In an analyst note delivered to clients Thursday, Gill cited extended wait times for the auto, the expiration of a $7,500 tax credit, and the fact that Tesla has not yet made the $35,000 base model of the vehicle available for purchase yet.

Gill stated that the preorder cancelation rate has doubled for Tesla since past year with one in four Model 3 orders now canceled. Gill now believes that the refund rate is now twice that. Tesla stock closed on Friday at $313.58.

According to Musk, Tesla received over 7,000 new orders-over 2,000 for Model S and Model X, and 5,000 for Model 3. The full credit is only available while a manufacturer maintains sales below 200,000 - which means Tesla hit that sales threshold this month. Gill said that the cancellations are due to a variety of factors, including long wait times to get a auto, Tesla's expired $7,500 credit on the purchase, and the inability for shoppers to get the base model, which goes for $35,000. As of 2020, the incentive will be entirely phased out. "Model 3 wait times are now 4-12 months and with base model not available until mid-2019, consumers could wait until 2020".

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