Questions I'd be Asking If I Owned Tesla Stock
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Here’s a big question I’d be asking if I owned Tesla stock: What happened to 345,000 reservations?
When Tesla’s Model 3 was released, it was supposed to be a $35,000 car. Four hundred thousand people, including yours truly, put down a $1,000 deposit to reserve their spots in line so they could get their hands on that marvel as soon as it became available. It was a brilliant move by Tesla, as it provided the company $400 million of interest-free financing – the biggest crowdfunding project ever.
Today, after some delays, the Model 3 is being produced. However, $35,000 seems to have been a fiction of CEO Elon Musk’s imagination. Though the car is getting great reviews from auto critics, the price for a bare-bones Model 3 starts at $49,000, and the tax incentives are fading away.
But something interesting happened recently. I received an email from Tesla that said: Model 3 is available to order, and no reservation is required in the U.S. We’re now offering all our best options – including our Long Range and Performance configurations with dual motor all-wheel drive. You can design and order yours today for delivery in approximately 2–4 months.
On the surface this sounds like great news, except that it begs a question: What happened to 345,000 orders? Let me explain. According to Bloomberg, which has been tracking Tesla’s production, to date (as of July 28, 2018) Tesla has produced 55,000 Model 3 cars. Since a $1,000 deposit was supposed to secure buyers a place in line, any car ordered today will only be delivered after orders that were placed years ago are fulfilled – after all, 400,000 people paid Tesla $1,000 to hold their places.