By on April 5, 2016

Elon Musk + Tesla Model S Circa 2011

Tesla Motors is cranking out EVs at its fastest clip yet, but buyers who put money down on the Model 3 should still have serious questions about the timeliness of their delivery date.

In the first quarter of this year, Tesla delivered 12,420 Model S sedans and 2,400 Model X SUVs — nearly 50 percent more volume than the same period last year. The electric automaker said a parts shortage in January and February hampered Model X production, but with the issue resolved, deliveries of 80,000 to 90,000 Teslas can be expected this year.

Tesla founder Elon Musk has displayed some newfound humility in recent days regarding the flawed production process of the Model X. According to the company, the parts shortage was the result of putting the proverbial electric cart before the horse:

The root causes of the parts shortages were: Tesla’s hubris in adding far too much new technology to the Model X in version 1, insufficient supplier capability validation, and Tesla not having broad enough internal capability to manufacture the parts in-house.

The problematic parts were related to the model’s futuristic “falcon wing” doors. During his March 31 reveal of the upcoming Model 3, Musk sheepishly admitted that the doors “did cause us some problems.”

With the Model X hurdles cleared, Musk’s chief concern now is creating the production capacity needed to bring the lower-priced Model 3 to legions of cash-carrying wannabe owners.

Production is expected to begin in late 2017, with the first deliveries going to customers in California — where Tesla’s Fremont production facility is located — and other west coast markets. When the Model 3 will reach driveways located far from the Pacific coast is the subject of speculation.

The initial popularity of the model, which will retail for $35,000 and feature a range of at least 215 miles, surprised even Musk. Within 48 hours of the launch, Musk tweeted that 276,000 orders had been made, a number he plans to update on April 6.

After warning prospective customers of a growing wait time as first-day orders rolled in, Musk tweeted that he was “Definitely going to need to rethink production planning,” and two days later tweeted “all efforts focused on accelerating the ramp.”

During an impromptu April 3 Twitter AMA, Musk was asked when customers in the UK could expect deliveries of the Model 3, and if a European factory would need to be built to supply them.

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110 Comments on “For Tesla Model 3 Buyers, the Waiting Could be the Hardest Part...”


  • avatar
    Land Ark

    There’s just no way the cars are rolling off the assembly line next year. And once they do start rolling, if you’re #150k in line you aren’t going to be seeing it until probably closer to 2020. I don’t think anyone saw the demand being this high and I can’t see them being able to accommodate it.

    I’d make some sacrifices to get one but by the time I would be actually able to the tax credit will be gone and the MSRP will probably have gone up by then too.

    • 0 avatar
      tekdemon

      I’m pretty sure they’ll be able to get it going by the very end of 2017 but the production line will only be trickling out cars. Reasonable production numbers won’t really happen until 2018.

      But that said the tax credit will likely still apply to a lot of preorders because the phaseout triggers two entire quarters after when the 200,000th car is sold. So even after they’ve sold 200,000 cars there’s still several months where people will still qualify for the tax credit before it phases out. And even then during the phaseout there’ll be people who’ll get the half credit, etc.

      That said, if you haven’t already preordered the odds are rapidly shrinking as to whether you’ll get any tax credit for it. But that’s kind of the whole point of this tax credit-to get these cars into real mass production at the scale where they no longer need that tax credit to make it affordable. If Tesla can really scale to where they sell hundreds of thousands of these that goal will truly be achieved.

      • 0 avatar
        Land Ark

        Even without the Model 3 existing, Tesla is slated to sell its 200,000th car in the US in early 2018. The day that happens you have until June 30th at 100%, then you have 6 months of 50% credit and then 6 months of 25% credit. So starting in July 2019 if you haven’t taken delivery of your car, it will no longer have any tax credit. That’s a short time in my eyes for a company that hasn’t even built the assembly line yet.

        But, from the beginning, I had planned my budget to pay full price for the base model. So the credit is not what’s keeping me interested. I’d have to sell some of my fleet, but at $35k I’m still an interested buyer. But who’s to say $35k is what the lowest price will be in 2021 when I can finally get my hands on one?

    • 0 avatar
      dwford

      At this point if I’m waiting 4 years for a car, I’d expect it to have been upgraded in terms of range, features etc. By then next generation cars from many other automakers will be out and the bar will have been raised.

  • avatar
    Sgt Beavis

    This is why I didn’t put any money down on one. I’m excited to see the electric car become a truly viable option for transportation but I’m not willing to let $1000 sit in Elon’s back account while I wait 2 or more years.

    As mentioned by Land Ark, the tax credit will be gone as well. That said, I would still be on board with getting one without any tax credit if the car delivers on features and the price point. I figure I’m willing to load it up on options up to perhaps $45K. My garage is pre wired for 220v and we even have SuperChargers in our town. I guess we shall see.

    Speaking of SuperChargers. I know Tesla has built a lot of them and there are a lot more on the way. However, at some point we’re going to find ourselves waiting in line to get our cars charged up. Charging times are going to have to come down even more to support future growth.

    • 0 avatar
      Glenn Mercer

      I have a neutral question (I say that because so many on TTAC leap to the conclusion that one is either an Anti-Elon Troll or a Pro-Elon Idiot: I am truly neutral and just curious, no axe to grind!). Here it is:

      “If aspects of the waiting process for a Tesla 3 are problematic (how long a wait, deposit tied up), would you be looking at a Leaf now or a Bolt later as an alternative?”

      And I am not a Nissan or Chevy dealer. I am truly just interested in the “cross-elasticities” between these EVs.

      • 0 avatar

        I think Tesla has the “fun to drive EV” market pretty much sewn up.

        Both the Bolt and Leaf appear to be highly utilitarian, boring devices.

        Personally, I’m an early adapter, but for the most part I wait for at least initial reviews before plunking down my cash. So I’m not standing in line sight unseen with my $1,000 in hand, but I am likely to be interested once the car is available.

        • 0 avatar
          shaker

          I dunno – the Bolt would appear to be the Honda Fit of EV’s, and it’s quicker, too.

          Plus: No drone of an overtaxed, 4000 RPM engine at highway speeds.

          Yes, the Fit is cheaper, and you can get a manual tranny, etc.

      • 0 avatar
        Sgt Beavis

        The Leaf has a far too limited range to be useful to me. Also, every other pure electric looks and is boring. I scratch my head when I see cars like the Chevy Bolt. It doesn’t cost any extra money to make a car look beautiful. So why make it look like….. that? But I do applaud GM for making a step in the right direction. The Bolt’s 200mile range makes is a practical car for most people.

        So, yea, I’d definitely consider other models in the price range but it isn’t just being about electrics. Make a good looking (at least decent looking like the new Volt) with 200+ range (300 is the sweet spot) and I’m ready to give you my business. I do have hope that Nissan will come up with something even better than the Leaf. Nissan certainly has had some striking designs as of late.

  • avatar
    stryker1

    I don’t know why on earth you’d put a pre-order down on an electric car that’s not likely to come out for 2 years. EV technology is still young, and you have no idea what the competition will look like in that time. I’m betting a large chunk of these pre-orders will never take delivery, and will cancel some time between now and launch.

    • 0 avatar
      Luke42

      I’m a Model 3 reservation holder.

      I’m convinced that the car will be something special. In don’t mind oaykng extra for something that actually is better, but the old-exonomy luxury car’s I’ve looked at have been “nice, but bithubg special.”

      What’s special? First off, my classmates were sent off to fight for oil in Iraq. This was a defining event of my young adulthood, and I don’t want any part of sending any more 20-somethinga off to get shot at in the desert. Also, the Model 3 looks like a really nice car, and 200 miles covers every day trip I could possibly make in my geography.

      I don’t need a car immediately. We have a beater 2004 Sienna and a 2015 Mazda5 (which replaced our recently totaled Prius) to get buy until then. The Model 3 will replace the Sienna. Hopefully, a 3-row Model Y will replace the Mazda5 some time after.

      I can keep the old Sienna running until the Model 3 becomes available.

      • 0 avatar
        stryker1

        My point is you’re blind-buying this thing, and in the delivery time-frame there are likely to be a number of competitive EVs from other auto-makers. Why not wait until the thing is available, and being able to comparison shop?

  • avatar
    Richard Chen

    This Model 3 order book situation reminds me of Kickstarter projects that are presented in an unfinished state, get massively overfunded, with all sorts of stretch goals to meet, and delayed product. Hopefully, this won’t kill them.

    TTAC alum Ed Niedermeyer: http://www.thedailybeast.com/articles/2016/03/31/tesla-s-model-3-could-destroy-elon-musk-s-company.html

    • 0 avatar
      heavy handle

      Ed’s been confidently predicting Tesla’s imminent demise since day one, and probably will continue to do so until his own demise. That’s his thing.

    • 0 avatar
      DeadWeight

      The Model 3 is the vehicle that will sink Tesla.

      This is not a result that I’m hoping for, but a mathematical inevitability.

      Tesla won’t be able to borrow enough cash through issuance of new shares of equity or from lenders (traditional or unconventional) to scale up production of components in order to meet demand at this price point (one that guarantees a major loss on per unit sold).

      And tax credits won’t offset enough of the losses as to just the Model 3s that Tesla does deliver as it has for the Model S (I’m going to guess Tesla may deliver 30,000 to 50,000 of these, max, but more likely closer to 10,000 before throwing in the towel).

      Notice I haven’t even mentioned the surging EV/Hybrid Tesla competition from GM (Volt/Bolt), Toyota, Honda, Nissan, etc. that’s verified in the pipeline.

      Welcome to the big leagues, Elon, where massive capex means break even (even with carbon credit subsidies) can’t be achieved until 100,000 units are actually delivered (if one is lucky), and actual profits (however slim) don’t roll in until 150,000+ units are successfully and cleanly (problem free) delivered.

      Not only does Feels not have the supplier base (with production capability and economies of scale) required to ramp up from Model S to Model 3 volume in place, this whole thing is farcical as Tesla can’t even credibly project when the 1st Model 3 will be delivered, whether in 2017 or 2019.

      The $1,000 deposit publicity stunt was just that; promotional snake oil.

      Tesla now finds itself at the cliff of becoming a large-scale manufacturer of a relatively affordable vehixle (low margin product if everything goes perfectly and economies of scale can be successfully achieved).

      Welcome to the incredibly competitive, incredibly capex intensive, mass market big leagues, Elon.

      God speed.

      • 0 avatar
        Brett Woods

        meh, 39B projected revenue over next 5 years is enough to float the CAPEX loans and is good enough to get more. 300,000 orders in the first week puts it to bed. He’s probably already moved on this week to figuring how to land a spaceship on a moving train.

      • 0 avatar
        Luke42

        @Deadweight:
        The reservation fees total at least $276 million.

        That’s not enough to develop a new platform from scratch, but it certainly is real money when it comes to building a car factory.

        Given what they’ve done so far, they might not even need to finance the rest.

        P.S. I agree, it is like kickstarter.

      • 0 avatar
        healthy skeptic

        But even with hundreds of thousands of units, is Tesla really a large-scale manufacturer? And is the Model 3 really that low for profit margin? I have to believe BMW does okay with the 3-series for margins. We’re not talking about econoboxes here.

    • 0 avatar
      carguy

      Ed has never been able to separate his political leanings from his love of cars. Its not just his dislike of electric cars but he was still railing against the auto bailouts at the WSJ long after it became apparent that they were, in fact, an undeniable success.

    • 0 avatar
      porschespeed

      Of course Tesla will eventually have the money hose turned off and it will disappear. Niedermeyer spelled out most of the reasons why in his piece so I won’t bother to regurgitate them. Suffice it to say, Tesla is a vanity project, nothing more. It is not profitable, it is not possible for it to be profitable in any achievable sense or timeframe. Musk will deliver precisely zero of the Model 3 on time, or in budget. Same as always. He will burn another $1B+ doing so. The battery factory will not be ready for full production till 2020, so there’s no way the numbers work. And by then, the Model 3 will have even more competition. That you can buy at a dealership. Test drive. Trade in your old car.

      Like Enron, GM, Better Place, Fisker this is easy to see if one takes the fanboi glasses off. If people understood anything about Musk, they would have seen this day one like the rest of us. He’s a carnival barker, not a revolutionary. He has no proprietary tech, let alone a scalable sales scenario. It’s hard to pick winners, but failures I can see a mile away.

      I *have* underestimated the fanboi devotion and/or investor desperation recoup some of their losses before the whole thing collapses. That people have continued to believe anything that Musk says despite always under-delivering is beyond me.

      • 0 avatar
        SCE to AUX

        Tesla can only succeed if the Gigafactory’s promises of lower cost via captive mfg and cell recycling bear fruit. I believe this can and will be done.

        Your same criticisms were leveled when the Roadster was launched, and again when the Model S was launched, yet 100,000 people have bought actual product from this ‘carnival barker’, and 300,000 more want to – today.

        Moreover, this carnival barker’s other business – SpaceX – is successfully delivering goods to the International Space Station, and people into space next year. Yep, he’s a real charlatan, ’cause NASA will let just anybody sent a rocket toward the ISS at 17500 mph. Eee-haw!!

        • 0 avatar
          Pch101

          Musk is counting on two things:

          -The batteries will be cheaper
          -The cars will sell for more than $35k

          I’m willing to bet that the $35k car will be $45k. In the meantime, he just managed to take on a couple hundred million dollars of unsecured debt at zero percent in the form of deposits, which should pay for most if not all of the remaining R&D. I have to admire Musk’s salesmanship.

          • 0 avatar
            FAHRVERGNUGEN

            TAKE my money. Please. And if you have a three-humped camel, let me know how much more you need to clone the other two humps.

          • 0 avatar

            It amazes me that there is such enthusiasm for a car that is limited in range, in location of fast chargers, and in recharging time. Then there is the poor reliability of the model S, which Consumer Reports no longer recommends, despite its very high evaluation of the car.

          • 0 avatar
            28-Cars-Later

            @Pch

            Musk is quite the salesman indeed to effectively land an interest free loan paying for R&D.

          • 0 avatar
            DeadWeight

            Those deposits can’t be spent by Tesla unless there’s a date certain established for delivery of an actual Model 3.

            IOW, that deposit money can’t fund anything, but rather, merely gives rise to placeholder status for orders on the Model 3, and is akin to money held in escrow.

          • 0 avatar
            Pch101

            Money is fungible. Put a bunch cash into one bin, and it can come out of another.

            Tesla’s balance sheet just had a bunch of cash added to it, with an offsetting liability that isn’t going to raise any concerns.

        • 0 avatar
          porschespeed

          @SCE

          Well, I had a nicely crafted response, but it disappeared (some things never change). Here’s the short version.

          You can “believe” anything you want about gigafactory. The facts are it isn’t 100% until 2020. More importantly, there are three other factories, making the same product, slated to completed about the same time. Except in low-wage countries.

          Not really captive either, as Panasonic owns everything but the dirt and building. Which is what you want in a BK. Take the toys with you, or buy the land and building cheap.

          I know the criticisms. I made them. Right here. Since day one of Tesla. I’ve been vindicated every step of the way, the only thing I have been wrong about is how this vanity project keeps getting funding. It’s a cash furnace. Funded by sycophants such as yourself apparently.

          That 100K people have bought a stockholder subsidized ride is no real accomplishment. Once again, if you actually know the numbers, there’s no way this is ever going to make money. Ever.

          SpaceX isn’t relevant to this topic, but since it’s about the cult of Elon, I’ll shoot fish in a barrel….

          SpaceX is government work. Cost+. He doesn’t have to make money, it’s made for him. He knows even less about spaceflight than he does about cars. All he *has* done is funded the things that guys from JPL and NASA want to do, if it weren’t for the system. They’ve had some spectacular failures, including the first 3 launches, and one about 6 months ago.

  • avatar
    laserwizard

    What we know of Tesla is that they build expensive products.

    They’ve yet to build any Model 3’s – so all of this is a pipe dream and they don’t have the capacity to build all that they supposedly have reservations.

    Let’s revisit Tesla in 1Q of 2018 when they’ll supposed have built enough Model 3’s to justify any consideration.

    And, no, Musk is no Henry Ford. Henry Ford kept things simple.

    • 0 avatar
      SCE to AUX

      They did have several prototype Model 3s providing 3-minute test rides (not drives) for the 850 guests at the unveiling. The videos and articles are online. It’s a real car, but far from production-ready.

      If you want cheap and simple, buy a Mitsubishi Mirage. Otherwise, there’s nothing simple about the automotive business today.

  • avatar
    Chocolatedeath

    Late 2017, then only for Cali and then only for west coast, so basically a three year wait for anyone here in FL. Most cars would be looking at some type of refresh or update by then. For me I will just wait for someone who makes cars for a living to make one that is as capable. I know three folks who own a Tesla in my area and they have to take them to the Tesla shop in Orlando several times a year. ALso the milage is hypothetical at this point and I am guessing it will be less.
    No I dont own one of their products but I have driven one several times. its fast and quiet and thats about it. I dont really like the quality of the interiors. But yeah you cant hate on the guy. Hes got alot of folks asking for what he has or should i say dont have right now.

    • 0 avatar
      jthorner

      I also noticed that the interior of a Tesla S is not even close to being up to the standards of a $100,000+ new car.

      • 0 avatar
        VoGo

        And yet, the Tesla S is the best seller in its class, crushing the S, A8, 7, etc. Apparently, the marketplace values something other than how soft the leather is.

      • 0 avatar
        Luke42

        To be fair, I haven’t found any $100k that is actually worth $100k…

        The Model S is at least something new and interesting that you can’t get for $35k (until late 2017 or later).

  • avatar
    CarnotCycle

    Wonder if Model 3 is sort of like Apple Watch, where the brand-faithful ordered it en masse the first day it was available – and that pretty much covered everyone who wanted one going forward.

    • 0 avatar
      Land Ark

      I’d say there are probably 10 times the number of people interested in buying a Model 3 who haven’t put down a deposit than those who have. If the car went on sale last week and they were producing at full capacity right now there would likely still be a years long waiting list for them.

      The only thing that can make it an Apple Watch is if the delays are so long that it gives other makers a chance to beat them to the punch.

      • 0 avatar
        Chocolatedeath

        10x’s dude thats a big azz number.

        • 0 avatar
          Land Ark

          Say it’s up to 300k deposits. Now, I’m assuming each of those puts up at the end (which won’t happen) which would make the total 3 million potential buyers.
          Eh, maybe that’s high, but I will say if released today, and could meet the demand, it would turn the auto industry upside down overnight.

        • 0 avatar
          raph

          Yeah almost 3 million people? If that is/was true it would be the single most successful model introduction in history I believe.

          What’s total US production right now? 12-20 million vehicles???

          If that number was sound in any way I’d imagine the industry would pretty much stop what they were working on and immediately focus on the full electric car biz.

          That Tesla has almost 300k is pretty astounding as it is but like others have said that number will probably dwindle as people run out of patience waiting on their series 3.

          • 0 avatar
            DeadWeight

            I’m building an electric car superior to the Model 3 in every way, that will have a bumper-to-bumper 1,000,0000 mile, 50 year warranty, and have a 1,000 mile range per charge, with a 30 second charge time on a standard 110 outlet, that will be built in the U.S., with 100% U.S. handcrafted components, with robot-laser vision quality control checkpoints at a Blackbelt Sigma Six ISO9000 Certified QC Megafactory the size of 10,000 football fields.

            A $250 deposit will get you a Model Unicorn Phart 8000 With Ludicrosity Mode by April 1, 2022. It does o-60 in 1 second and will cost $19,999.99 with every option including onboard, teak wood lined espresso bar.

            Place your order now, so that I can use the 10,000,000 deposits I receive to abscond and buy several Caribbean islands where I will build my new private offshore, taxhaven kingdom and fiefdom.

          • 0 avatar
            Luke42

            @Raph:

            Three million people bought the Prius.

            The Model 3 should be a much nice and much greener car, while costing about what a fully loaded Prius costs.

            I think three million sales is plausible for the Model 3. Spread over a decade.

            The only problem is that those Prii take a very long time to wear out. But there are plenty of people who wouldn’t buy a Prius who are interested, too. And those 3-series leases get turned in a lot faster than Prius purchases.

    • 0 avatar

      @CarnotCycle

      That was my thought.I don’t think there’s any additional huge demand for a car that’s range-limited, has a long recharging time, and for which fast chargers are lacking in most of the country.

      • 0 avatar

        That is exactly what was said about the Model S. Once the initial depositors had bought their cars, there would be no viable market for a $100,000 limited range vehicle.

        History defied that logic and sales keep climbing.

        Expect the unexpected when it comes the continual demand for the model 3.

  • avatar
    Felix Hoenikker

    A long waiting list for the Model would be a good source of customers for the Chevy Bolt if GM can deliver it in quantity starting in late 2017. The federal tax credit would still be available too.
    As an aside, I noticed that there were six, newly installed Tesla superchargers next to a Red Robbin restaurant located in a nondescript shopping center near my house. I’ve passed by about six times since I first saw them and only seen one Tesla,a model S, plugged in. Mostly, the chargers sit idle. They were probably put there for their proximity to the heavily travelled I78 through Allentown PA.

    • 0 avatar
      SCE to AUX

      I have no doubt GM will hit its dates on the Bolt, and I expect they will support/push it better than they have the Volt.

      If I ever get my Tesla, the SC you mention is one I would use in my quarterly trips across PA.

    • 0 avatar
      JimZ

      I’d guess maybe about half of the pre-orderes will actually ever end up driving around in a Model 3. Like some Apple fans, I’d wager most of the people actually *lining up* to pre-order one are just brand- and attention-whores who just wanted to be seen and be able to tell people they pre-ordered a Tesla.

    • 0 avatar

      Yes there is a huge opportunity for GM. I can read the sales headlines now, “Bring your $1,000 Tesla refund check to a GM dealer near you and get $2,000 off a brand new Bolt TODAY”!

  • avatar

    The hardest part will be when they find out all of the vehicle’s shortcomings 3 years from now…once they finally get theirs.

    The other hardest part will not having an exclusive car once everyone else gets in.

    Part of the reason wealthy people lease new luxury cars for 2-yr terms and then trade up.

    • 0 avatar
      SCE to AUX

      I’ll channel Pch101 for a moment…

      It’s unlikely everyone else will join this market (mid-size EVs), because doing so is almost a guarantee to lose money.

      I’ll admit that he’s right, although I remain a Tesla fan.

      • 0 avatar
        VoGo

        If PCH101 is so smart, then why is Tesla worth $60B?

        I guess he and all the other doubters on here must be smarter than everyone on Wall Street. That’s likely.

        • 0 avatar
          tresmonos

          lol, now, now… be nice in the sand box.

          Wallstreet: every employee of Musk who gets over 30% of their compensation in stock options, every day trader known to man are just funding the next start up.

          Start-up fever, baby. Time will tell if it’s the same house of cards that this ‘baby boomer’ economy seems to be.

        • 0 avatar
          derekson

          Because Wall Street is treating it like a tech stock rather than an automobile manufacturer and ignoring the realities of the auto industry like high capital expenses and low margins.

          • 0 avatar
            VoGo

            All I’m saying is that if all these Tesla doubters had actual balls, they’d short the stock rather than waste their time ranting here.

            And for the record, I’m in PCH101’s corner 95% of the time. But not on this.

          • 0 avatar
            tresmonos

            you’re a much smarter person than me, derekson.

            VoGo, shorting it now would be suicide. You can’t stop market sentiment. Once the continuous ‘reward’ of buying stops, (i.e. the price keeps going up) the music will stop. Unless the dividend is healthy per share.

          • 0 avatar
            Pch101

            The problem with shorting stocks generally is that you can run out of money before the market runs out of stupid. It’s a timing issue.

            In any case, you don’t necessarily buy stocks in companies that you believe in. I’ve owned stocks of companies in which I no faith at all because I could day trade or swing trade a profit from them. That didn’t make them good companies, they just had volatile stocks that provided short-term profit opportunities for me.

        • 0 avatar

          Tesla is worth 60b because of the bizzare way the market has decided to value tech stock not on past performance.

      • 0 avatar
        tresmonos

        I am a Tesla fan, too. IF they can make a battery for cheap, I think they have a viable play. The car looks so lean with respect to piece cost, design and manufacturing. The concept is a marvel in lean design. It truly is. It has to cost less than it takes to make a Fiesta.

        When everyone was complaining about it’s simplicity, I was swooning.

  • avatar
    zerofoo

    Car guys are a fickle bunch. I’ve seen TTAC wringing its collective hands over the risk of $1000 sitting in Elon’s bank account (which, BTW, is fully refundable) – yet on the next article over people are debating the wisdom of buying an unloved VW TDI product.

    The Model 3 will most likely happen – will it be late? Maybe.

    The TDI is, in fact, in violation of the Clean Air Act. It may not be legally usable on public roads if VW and the EPA lock horns – yet some car guys are willing to make a $10k to $15k bet that their car will not be impounded at some point in the future.

    Listen, if you don’t like electric cars or Elon Musk’s haircut – just say so. For me, risking $1000 on the most innovative car in my lifetime isn’t a big deal.

    • 0 avatar
      CarnotCycle

      “…on the most innovative car in my lifetime isn’t a big deal.”

      Plugging cellphone battery stack into electric motor to make car go is neat, but it’s hardly more ‘innovative’ a’la a GM EV1 than a Toyota Camry is vis-a-vis a…EV1-era Toyota Camry.

      When I think about it, I’d say most innovative ‘real’ (can go to dealer and actually buy one) car, powertrain-wise, in my lifetime is probably a Prius.

      • 0 avatar
        zerofoo

        The EV1 didn’t have anything approaching autopilot or the ability to summon your car.

        Software is the really innovative part of the Model 3.

        • 0 avatar
          CarnotCycle

          I would wager better silicon more the culprit than software for things like autopilot and summoning car. OS-wise all these Teslas are running on Linux kernel, which is ultimately POSIX, which I think is from the late 60’s. I don’t think Teslas run any big proprietary ASIC controller either; it is all off-the-shelf stuff.

  • avatar
    SCE to AUX

    I reserved a Model 3 5 minutes after the portal opened, so I was one of the original 115k Musk announced before the actual unveiling.

    Total Model 3 reservations are now double the volume Tesla has shipped in its entire 8-year production history.

    Since I’m on the east coast (Pittsburgh area), I have serious doubts that I’ll see one in 2 years. Moreover, it’s likely the initial shipments will be blinged-up AWD versions – not the cheap one I want.

    Also lurking in the wings: Musk mentioned a while ago that the Model 3 would come in two versions – a sedan and a CUV thing. Some speculation identifies the CUV as the Model Y, but the Model 3 sedan frenzy has made people forget about this prospect. If there is a Model Y – possibly revealed in the “Phase 2” of the Model 3 unveiling closer to production, the Tesla fans will wither in rapturous delight.

    Three reasons the reservations are so numerous:
    a. The money is refundable.
    b. $1000 is cheaper than the $5000 reservation for a Model S or X.
    c. Interest rates are low. Putting that grand somewhere else won’t earn you much anyway.

    Will I keep my money in? I don’t know. Model S cancellations were about 20%. Model 3 cancellations will be much higher, unless Tesla keeps animating the bait on the hook.

    Will I get a Bolt instead? Probably not. Too small, too dorky (I did have a Leaf), but it will likely perform as expected.

    Alternate plans? Possibly the upcoming Kia Niro CUV hybrid.

    • 0 avatar
      zerofoo

      Not sure deployment will go as you suggest.

      Elon’s tweets allude to regional deliveries and that your reservation gives you priority in your particular region.

      I would imagine the early cars will need to be ordered to spec and financing approved before you take delivery. This way minimizes the number of unsold cars that Tesla must find a home for.

      I predict your reservation will get you an email or phone call to order your car and secure financing. After a period of time later your spec vehicle will be delivered to you.

    • 0 avatar
      kychungkevin

      SCE I am in the same boat and thought as you. Reserved at 10:35ET but won’t expect to get one by 2019 in New Jersey.

      I would not be surprise to see 30-40% cancellations even if the car rolling out at normal rate by the end of 2017. If production still slow at mid 2018 50%+ would cancel. On the other hand if the 3 really perform as good as any car in that price range ($35k+) at 2019 standard they would sell much more than just the reservations.

      My wife CT200h is in high mileage and have to get a new car next year. I am thinking about Bolt too but then I don’t want to have 2 electric car in the house when Tesla available. So now I am thinking Prius Prime, Kia Niro, and Civic Touring…decision decision….

      • 0 avatar

        If demand is strong at time of production, we will see few cancellations. If demand is weak we will see a slew of cancellations. I suspect there are many who are speculating they will be able to resell early Model 3’s at a profit.

  • avatar
    indi500fan

    OK TTAC b&b, which makes actual retail deliveries first, Elio or Tesla 3 ?

    • 0 avatar
      SCE to AUX

      You can reserve an Elio for as little as $100, and they have 51k reservations so far.

      Maybe Elio will deliver first, but I don’t give them much of a chance. 3-wheeled cars with outriggers are just too weird and impractical.

      • 0 avatar
        SomeGuy

        My uncle reserved an Elio. He lives under a mile from his job, so for him, that vehicle is perfect. I admire his courage to put money down for one of those. I don’t know if I would.

  • avatar
    deanst

    “Tesla Motors is cranking out EVs at its fastest clip yet……..”

    Actually, no. Production in the first quarter of 2016 was less than production in the fourth quarter of 2015.

    • 0 avatar
      zerofoo

      It’s common in other industries for existing product in the pipeline to slow before the announcement of a new product.

      Apple is particularly good at this. When inventories of a current product dry up, you can be sure a new product announcement is coming.

      I suspect you may see Model S ramp up while some well-heeled buyers become impatient waiting for their Model 3.

    • 0 avatar
      mcs

      Q4 2015 was 14,037. Q1 2016 is 14,820. Since Q1, Model X production has started to ramp up and is up to 750 per week.

  • avatar
    mcs

    In other EV news, guess who now owns the largest US refinery? Enjoy your $2.00 gas…

    http://oilprice.com/Energy/Energy-General/Largest-US-Refinery-Now-Belongs-To-Saudi-Arabia.html

    • 0 avatar
      DeadWeight

      SA and other OPEC members (as well as non-OPEC members) have to deal with a cooling/slowing global demand for commodities, including fossil fuels, probably lasting for another 3 to 5 years minimum, while fending off alternate energy supply ramping up, and dealing with the biggest, riskiest geopolitical threat to their ruling class in 50 years.

      The last thing they’d do is purchase large refineries to drive the price of gasoline, diesel and distillates UP (just the opposite) at present.

      This is actually being done to try and insure against gasoline/diesel price volatility and price increases (by controlling the crack spread, done with cheap natural gas, by the way, they can manage this task far easier).

  • avatar
    carguy

    I see some problems with the model 3 “launch”

    1. This is vaporware – there is no model 3 yet. They have a prototype that is still at least 18 month away from being ready for the production line. Keeping the buzz going for that long will be impossible.

    2. This model represents a risky business model change. It will move Tesla from a business of selling product less on value on more on the cool factor and the celebrity of its CEO to a market segment with a strong focus on value. Other established players are competing in this segment so there will be very little room for error.

    3. The proliferation of affordable Teslas will mitigate the cool factor of their other models causing young wealthy tech entrepreneurs looking to impress to look elsewhere.

  • avatar
    JMII

    Plenty of people want Telsa’s, however most can’t afford the S or X. With the 3 (E backwards, so S, E, X… gotta love Musk) they have it priced in a more reasonable, normal price range (or not… see JB’s post today). However they have never made so many cars. Can they really ramp up production to met this huge demand? I doubt it.

    So how Tesla handles this will be the key to their future. Sure some diehard fans will hang around for 3 years waiting for their car but how many more will bail out and move on. But move onto what? A Leaf? A Volt/Bolt? Nope. I don’t think the demand we are seeing here is because this many people want an electric car. Instead I think its because people want an affordable Tesla. Tesla, much like Apple, has built a great brand, people aspire to be Tesla owners. However if they can’t deliver then their reputation takes a serious hit. Then again having a limited number of vehicles raises the desirability and feeds into the sense that gives Tesla owners a special status. So maybe these delays will just add to the uniqueness of brand.

    • 0 avatar
      RHD

      When the fourth model comes out, then Tesla will be producing Models S, 3, X and Y.

      On another subject, how many of you have Tom Petty singing in your head right now?

  • avatar
    redmondjp

    I think Tesla’s fatal mistake will prove to be the Model X. Just the doors alone (great for an auto show or a Batman movie, not so great for the development cost or day-to-day operation) could be enough to sink it.

    If they had taken the time and money used to develop that product and applied it to the Model 3 instead, they could be rolling 3s off of the assembly line right now.

    The market for the 3, due to its lower price point, is far larger than for the Model X, and they desperately need to scale up production in order to become profitable.

    I really want Tesla to succeed, but I share the concerns about their cash-flow situation.

  • avatar
    APaGttH

    I think it is worth noting that both the Volt and Leaf had huge “promises to buy” and deposits on them (not a 1/4 million plus) and in both cases those huge deposits and “promise to buy” didn’t materialize into orders.

    It is one thing to plunk $1K down, it’s a whole different thing when the e-mail or phone call comes to say OK, here is the actual pricing and specs, now buy it.

  • avatar
    Von

    It’s down to execution, Tesla will need a hard ass general, as opposed to dreamers and idealists, to make sure the suppliers and itself are up to the task of delivering the cars on time. Delays beyond a few weeks will be extremely costly in terms of cancelled orders, and disappointed customers. These customers are the evangelical early adopter types that will make or break this car on social media, which will be the most important media by then.

    If they can deliver the cars on schedule and somewhat on budget, Tesla will make the first step into the big leagues. However, that is a big if.

    • 0 avatar
      SCE to AUX

      I get what you’re saying about hitting dates, but they have shipped over 100k cars already. When you say ‘a few weeks’, I assume you mean the cumulative effect of many suppliers missing their dates.

      Tesla already has evangelical early adopters in Model S buyers, hence the success of the Model 3 pre-order.

      I don’t know what ‘big leagues’ means to you, but if they ship 80k cars this year, they will have outsold:

      Land Rover
      Volvo
      Mini
      Scion
      Porsche
      Fiat
      Jaguar
      Maserati
      Smart
      Bentley
      Alfa Romeo

      or, looking at it another way, the last 6 in that list combined. And most of those brands borrow stuff from their parent so they can survive.

      • 0 avatar

        Scion’s dead. The rest all have long-established parents who can provide support. Huge difference with Tesla.

      • 0 avatar
        Von

        Big league to me is somewhere on the order of Subaru, independent, profitable, and volume manufacturer of automobiles. I know Subaru are owned by Fuji so they are not fully independent, but Fuji doesn’t make other brands of consumer automobiles so I assume Subaru has a decent amount of say so when it comes to automotive matters inside the company.

  • avatar
    carlisimo

    I live in Fremont and know people who work at the NUMMI plant. They’re concerned – they simply don’t have enough automation to make a volume model yet. They’ve known about that problem for years and take some steps towards automating more of the process, but they haven’t made enough progress. Despite a lower output than NUMMI had under Toyota/GM, they have more human workers than ever (massive parking problems at the plant). Automation will determine whether Tesla can make it or not.

    • 0 avatar
      DeadWeight

      Lest we forget, there’s credible experience that Tesla vehicles built to date will have total, catastrophic drivetrain failures by mile 60,000 at a rate of 60%-70%.

      That’ll do wonders for residual/resale values (not to mention other serious issues).

      I’m in the camp that believes Musk’s real goal is to make Tesla an EV battery company, and not a automobile manufacturing company.

      • 0 avatar
        indi500fan

        Was not familiar with those failures, did some research, and wowsers that has got to be costing Tesla a LOT of dough. Apparently these are all on warranty at something like $5 grand per. Obviously a good bit of the failed module content can be reclaimed in a remanufacturing process (similar to an automatic transmission) but sounds like their warranty costs may be really high right now.

      • 0 avatar
        derekson

        “Lest we forget, there’s credible experience that Tesla vehicles built to date will have total, catastrophic drivetrain failures by mile 60,000 at a rate of 60%-70%.”

        Get out of here with your data. I’ve been assured, repeatedly, that an EV is super reliable just because it’s an EV and uses fewer parts than an ICE car.

      • 0 avatar
        tresmonos

        Lest us all not forget just how vertically integrated Tesla is. That ain’t cheap, especially in California. Their supply base when I interviewed with them was less than 280 Tier 1 suppliers.

        Their lines ran extremely slow. The manufacturing engineering managers were explaining their challenges. They not only are inventing a new product – they are re-inventing auto assembly. Poorly, from what I gathered. Time will tell.

        Battery manufacturing seems like a more viable business plan.

        • 0 avatar
          derekson

          They should have tried to become a Tier 1 supplier for EVs to the auto industry after demoing that it works with the Model S. They could focus on engineering the skateboard chassis and the drivetrain and producing batteries and let companies that know how to make good interiors and various subassemblies do their thing on their underpinnings.

        • 0 avatar
          Richard Chen

          Yikes, but I’m not surprised that they’re making it up as they go along. The Model 3 is said to be on a different platform, so they’re going to have to re-re-invent assembly.

          I read that NUMMI was producing a half million vehicles per year, roughly 10x Tesla’s 2015 output. Toyota used Tesla powertrains for the RAV4 EV, but parted since and sold its shares. Not a good sign from a former partner who knows something about manufacturing.

    • 0 avatar
      derekson

      People are massively, MASSIVELY underestimating the amount of Manufacturing Engineering work and Operations Engineering that Tesla is going to need to do to ramp up to the kind of volume they’re claiming they’ll be hitting with the Model 3.

      And this doesn’t even address all the quality and reliability issues that they’re having already with the low volume models….

      • 0 avatar
        tresmonos

        Right now, automation suppliers are coming to my plant and telling us that their capital is all brand new, but no one knows how to run it. Nor do they know how to do corrective actions, etc. Management essentially doesn’t know how to drive the process and nobody knows what the process is. There is no working quality or manufacturing operating system. If you are to believe these vendors, it’s a shell company.

        • 0 avatar
          derekson

          From afar it looks exactly as you’d expect a manufacturing operation founded by a haughty and arrogant software engineer to look.

          “Just get it out the door and we can fix it later” being the operative sentiment.

  • avatar
    jthorner

    Have a look at the auto extremist site for a deeper look at this hype fest.

    • 0 avatar
      nickoo

      I’m not 100% convinced DeLorenzo isn’t going to be eating his words in 5 years, but I’m not convinced Tesla has what it takes either. DeLorenzo correctly pointed out that the model S was largely built by the true believers, i.e. industry insiders, and that when they left, the issues such as the falcon wing door debacle and the model 3 trunk lid debacle started popping up.

      Teslas just aren’t that good and I’m not impressed by their engineering at all. Fanbois who don’t know how to engineer their way out of a paper box are the ones buying them. Tesla can’t even build a 1 speed reduction gear box that doesn’t fail on the model S, judging by the 66% failure rate. I could easily design not only a 1 speed double helix box that wouldn’t fail, but also a 2 speed electronically synchronizing self-shifting dog clutch transmission that could easily take the torque the model S puts out without failure–it’s the type of thing I work on every single day for engines that put out anywhere from 1.8 to 40 MW.

      • 0 avatar
        mcs

        Supposedly the reduction box issue has been fixed, but I haven’t seen statistics one way or another as to whether or not it’s actually fixed. They say the issue was related to inadequate lubrication of the spline. Tesla says the problem has been fixed, but I haven’t seen stats (or looked for them) on the new unit. I don’t have time to look.

  • avatar
    HotPotato

    It’s no secret that Tesla does not deliver cars on time, but I expect a lot of people put down their money fully aware of that. If Tesla delivers on time (chanza gorda) then it coincides with the end of my wife’s current lease: we win! If they deliver in more like five years (that’s my guess, if you’re last in line and you want a base model) then my current car will have been paid off for a while and I’ll have dough for a nice down payment on a Model 3: we win!

    But we’ll probably lose patience, get a Bolt, and then feel foolish months later as the first sexy-ass Tesla passes our innovative but dorky Honda Fit lookalike on its way to a supercharger we can’t use.

  • avatar
    nickoo

    I made a lot of money recently on tesla stock. I got lucky as hell buying a bull options spread near the recent $140 low and tripled my position making the maximum potential profit (yes, I sold and those are realized profits, not just paper ones)

    ALL ABOARD THE HYPE TRAIN!

    But seriously, I am hugely diasspointed in the model 3, from the useless dash with a worthless touch screen and the useless trunk.

    I’m interested in an EV, but not the model 3 as-is. The trunk debacle is as bad as the model X falcon wing door debacle.

    • 0 avatar
      derekson

      And just like the doors, it’s from making a design decision without any thoughts to the engineering realities and refusing to budge. In this case, it’s the huge glass roof being a single piece of glass from mid-roof down to the trunk.

      • 0 avatar
        VoGo

        Citroen already did it with the high forehead C3. Not so hard to make long glass, as it turns out.

      • 0 avatar
        nickoo

        100% in agreement with you. Lord Elon is a terrible boss full of unearned hubris and arrogance and not the one to head Tesla if they hope to succeed.

        After the real designers from the auto-industry built the model S and left, you can directly see the failures in the X and the 3.

        Tesla is all hat and no cattle.

      • 0 avatar
        mcs

        The roof is there to lower the cost and simplify manufacturing from what I’ve read. At the very least, you have a huge swath of car that doesn’t need to be painted. You have to install a rear window anyway, so why not extend it up the back a little further and eliminate some painted surface. Same thing with that dash. I think it’s more about lowering manufacturing cost than style.

        It’s been a number of years since I’ve been in the auto manufacturing business (including some time spent crawling around the Fremont plant pre-NUMMI) so my qualifications to render an opinion are a bit stale. However, I did spend many hours observing and can remember most details of the plant I spent the most time studying, which was Ok. City. I worked with GMADs Tom Murday when I was fresh out of school.

        • 0 avatar
          nickoo

          Mcs. You always provide a well thought out balanced comment. I appreciate your commentary. I want EVs to succeed. I am concerned about tesla having what it takes to play in the big leagues.

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