By on May 2, 2016

Tesla Model 3

Like a sign next to the egg roll pit at a Chinese buffet, Tesla’s “two Model 3s per person” rule could have been ignored by hungry customers.

Tesla founder Elon Musk had to go on the defensive recently after a financial journalist reserved 20 units of the upcoming 215-mile electric sedan, Automotive News reports.

Anton Wahlman, writing for the investing website Seeking Alpha, published a story claiming that he placed 20 refundable orders for the $35,000 Model 3, casting doubt on the legitimacy of the model’s 400,000 reservations.

Musk said only two orders would be accepted from any one person, but Wahlman found that this actually meant two orders per order form, with no limits on the number of forms a customer could submit.

“I ask because I had no problem placing deposits for 20 cars myself, and I didn’t encounter any limit, causing me to reasonably assume that I could just have continued — placing 200 or 200,000 refundable deposits — you pick the number,” Wahlman wrote.

Called out over the apparent loophole on Twitter, Musk fired back to quell growing rumors of Model 3 speculation.

Musk added to his message two hours later, stating that a system scan revealed only 0.2 percent of Model 3 orders had the same email and physical address. Those excess orders were purged, he said.

That puts the number of excess orders in the high hundreds, a number so low that the approximate reservation number of 400,000 can probably still stand. Musk still faces the problem of getting all of those Model 3s assembled and delivered in a timely fashion once production begins in late 2017.

Twitter conversations with Musk always reveal new nuggets of information, and this exchange was no different. When asked, Musk said the Model 3 will be offered with Tesla’s go-fast “Ludicrous” mode.

The Model 3 is expected to boast a 0–60 mph time of less than six seconds, meaning a Ludicrous upgrade could shave about two seconds off that figure.

[Image: Tesla Motors]

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94 Comments on “Journalist Prods Elon Musk Into Closing the Model 3’s Bulk Order Loophole...”


  • avatar
    SCE to AUX

    0-60 in <6 seconds is 'go-fast' enough for me. I don't want a $50k Model 3, and I will cancel my pre-order if I'm only able to choose a high-end configuration when the time comes.

    Tesla needs to appreciate that one primary reason for so many pre-orders is the price of entry. Everybody understands the price range of a new Model S, and they also know that a used Model S can be had easily for $50k. But that isn't what Model 3 buyers are signing up for.

    • 0 avatar
      Luke42

      I’m not planning on getting Ludicrous mode, either.

      I may go for AWD, since I’ve found RWD to be demonstrably inferior in the winter weather I encounter, though. FWD would be optimal, but it’s not an option – so AWD is the next best thing.

      I’m really looking for a car with no tailpipe, which has the range to deal with my local geography. The autopilot and the supercharger network matter, too.

      The rest of it are just freebies which sweeten the deal a bit.

      • 0 avatar
        DeadWeight

        Make sure to do a owner review if/when Tesla ever delivers your Model 3, and regardless as to at what actual price.

        It’d be really interesting if you finally receive a Model 3 in 2022, assuming a) you did not demand your deposit back before then, b) if you did demand your $1,000 deposit back, Tesla still has it to return to you, c) Tesla is even still in business in 6 years, d) you don’t defect to another make/model of what’s inevitably going to be one of a dozen to two dozen EV competitors from much larger manufacturers having much larger production capacity and economies of scale (especially leverage over non-integrated suppliers) than Feels.

        I find the faith in deliverance of Model 3s on schedule, in remotely approximate quantities as pre-order hype suggests, and on even a remotely approximately accurate timeline to be eerily analogous to the formation/embryonic stage of a new religion/cult.

        • 0 avatar
          orenwolf

          Some could say a focused obsession on their demise could be a condition as well. I’m sure if you find yourself eating claim chowder in 2017 you will blame it on irrational fanboyism “proving” your point all along.

          Musk has basically done the first Kickstarter campaign for a car. Probably too this-millennium for most, but I have successfully received backer-pledged items from KS, even a year late. Why? Why not? Supporting progress and new ideas is a hell of a lot more fun than claiming the sky is falling all the time.

          • 0 avatar
            DeadWeight

            Melodramatic, wildy exaggerated misinterpret much?

            Tesla loses money on every vehicle it sells.

            Tesla just did a “crowdfunding” type social-media exercise taking $1,000 deposits for 3.5 to 5 years worth of a future, to-be-built Model 3 that is 1/2 the price of the Model S (that it still loses money on) without specifying very much detail about production capacity, prospects of profitability, etc, and not guaranteeing or even precisely forecasting first delivery dates, etc.

            If you interpret that as “sky is falling,” then by extension, you should be very bearish on Tesla’s future.

          • 0 avatar
            orenwolf

            “Tesla loses money on every vehicle it sells.” Yes. They have a very high R&D expenditure. I posted their last quarterly elsewhere. You keep using those words, I do not think they mean what you think they mean.

            And yes, Tesla gathered some $400M through crowdfunding to help fund scaling up of their model 3. I bought in, so did many many others, because (at least in my case) I choose to support progress, and I don’t really care about the pittance of lost interest on $1k over a few years (I did also just buy a 2016 mazda6! I don’t want my model 3 until at least 2018 thank you). In return I get to support a company that I believe is working towards progress in electric vehicles (as evidenced by their existing offerings and plans for the 3), and exercise some level of control over when I get that item, versus waiting for general availability.

            Sure they may fail. If so, so be it. It’s worth it to support their attempts. I know that sort of optimism is strange in the automobile industry (sadly?) – but there it is, and I’m sure I’m not the only one. Belief in, and supporting of, a company business plan is not a religion, even if you, yourself, can’t understand why anyone would support said plan. Sorry. :/

          • 0 avatar
            Pch101

            “They have a very high R&D expenditure.”

            Not really.

            In any case, you continually miss the point that R&D isn’t just a fluffy option for automakers but a mandatory cost that just so happens to be excluded from gross margin. It isn’t what you think it is at all and Tesla really should be spending MORE on R&D, not less.

            The reality is that Tesla can’t raise prices to cover these costs, so it loses money. Tesla can sell $6 burgers for only $5, which isn’t exactly an awesome revenue model.

            The reality is that if volumes are to increase, then prices must fall even further in order to reach a broader audience, which makes these issues even more difficult.

            So Tesla is betting on reducing its costs even though it won’t have the scale to do that. That necessarily means that the only possible path to profitability is in a sharp decline in the cost of power storage. There isn’t much else to work with.

          • 0 avatar
            porschespeed

            “They have a very high R&D expenditure.”

            No.They.Don’t.

            Were you financially literate enough to read the 10K, they don’t spend what others spend as a percentage of revenue. What they *do* spend money on is infrastructure. Which barely supports the 120K cars they’ve sold up to right now. Add your imaginary 400K cars, sold at less than half-price?

            Bank of Change. How do we make money? Volume.

          • 0 avatar
            DeadWeight

            I’ve defended Musk & Tesla (but not Tesla’s long-term viability/business model; the numbers don’t/can’t add up to make a good case for Tesla) in the past.

            I have no personal animosity towards Musk, and in fact, respect him in some ways for some of the ballsier things he actually has accomplished.

            However, the way that Musk/Tesla have promoted the Model 3, the lack of specificity, the social media-driven, crowdfunding style deposit-thon (on a vehicle that few know much about and that’s realistically 2 to 3 years away from delivery, if its built and delivered in sufficient quantities at all), and Musk’s implicit assumptions that Tesla is operating in a static environment when, in fact, Tesla is now slowing down its technological progress and making more mistakes, while much larger, much deeper capitalized companies are launching serious rival products, is the stuff that realists will identify and point to as signs of Tesla’s real problems, while those with myopia, devoted to some romantic vision of Tesla rather than possessing objectivity, is the stuff that Tesla fanboys/fangirls will ignore.

            It’s hopeless trying to engage in logical discourse with those who are emotionally vested in Tesla as an ideal, and not analyzing it as a car company (which it actually is, by its own mission statement), in what is a massively intensive industry in terms of capex and just about every other business hurdle.

          • 0 avatar
            orenwolf

            “It’s hopeless trying to engage in logical discourse with those who are emotionally vested in Tesla as an ideal, and not analyzing it as a car company (which it actually is, by its own mission statement), in what is a massively intensive industry in terms of capex and just about every other business hurdle.”

            So let me ask you then – if they DO succeed, what does that say? What will, in your mind, be the reason they succeeded, despite having, as you’ve said repeatedly, no chance of success?

            Because to me, that’s every bit as myopic as your suggestion that the only path to success is to do what everyone has done before. It’s easy, very easy, to document the reasons for failure. The true visionary in any industry is the one who sees the change before it arrives, and is prepared for it. I don’t know if that’s going to be Tesla or not, but I’m not personally prepared to declare them as failed just yet, as so many seem to be.

          • 0 avatar
            Kenmore

            “It’s hopeless… Tesla as an ideal”

            Someone here has not accepted Hope and Change into his heart.

            *lowering brow, deepening voice*

            Fear not, Good Citizens, he has already been reported.

        • 0 avatar
          ilkhan

          “Much larger production capacity” and still can’t buy batteries to fill that capacity. Electric cars take a *lot* of batteries, and nobody in the world can supply enough of them for a high volume 200+ mile range car. Yet.

          I’ll buy/flip/de-deposit my $1k when it comes time according to the market when it happens. But for now the Bolt is a slow and ugly joke, and nothing else is even close.

          • 0 avatar
            mcs

            >> Much larger production capacity” and still can’t buy batteries to fill that capacity. Electric cars take a *lot* of batteries,

            The density of the cells is increasing, so more cells aren’t needed. The manufacturing process is evolving as well. It’s becoming a faster simpler process.

        • 0 avatar
          JimZ

          I find it interesting how similar Tesla fans are to Apple fans.

          • 0 avatar
            VoGo

            I find it interesting how similar Tesla haters are to people who are secretly jealous of Elon Musk.

          • 0 avatar
            Kenmore

            “secretly jealous of Elon Musk”

            I once was but now he’s going gray and getting crows feet. AND puttin’ on the pudge.

        • 0 avatar
          TrailerTrash

          orenwolf

          Look. I don’t give a hoot about Musk OR Tesla.
          Regardless of all these negatives and the fact that there is emotion on both parts.

          Let the damn company succeed or fail…means nothing to me.

          What DOES mean something to me is when tax dollars are used in the promotion of its sales and success. For ANY social cause.

          THAT is what makes me a bit insane.That and my drive across the state now is muddied up with thousands of wildlife killing/landscape blackening wind power generators. Another “if its good for OUR cause its OK” Obviously a migrating bird is not as important as the snail…..

          So, yes, go for it.
          Just go for it without my money being used in the religious movement and in place of and support of your faithful prayers.

          • 0 avatar
            VoGo

            TT,
            Where is your passion in criticizing oil subsidies? Where were you when Chrysler was continually getting bailed out by the government? At least Tesla is American.

          • 0 avatar
            JimZ

            VoGo, you have an “interesting” definition of “Continual.”

          • 0 avatar
            TrailerTrash

            VoGo

            where was I???
            Are you saying somewhere along the lines I was for any of that?

            I was totally against the bailouts for both the auto industry AND those crooks on Wall Street and governemtn.

            As far as the so called oil subsidies…you have to be specific.
            IF any subsidy goes to the benefit of a single company or takes part in social engineering, I have always, on record, been militantly against.
            And to try to suggest oil exploration is the same as tax incentives for electric cars costing over 100K is ridiculous and will not be tolerated as an argument.

            It was my brothers and I that saw our money being used against us in the early days of business. Other competing companies were using the Fed money to compete against us in international sales. So don’t give me any crap about where I stand.

            But there is a hypocrisy here when it comes to using money for social engineering and NOT for the true general welfare.

          • 0 avatar
            VoGo

            Calm down, TT,
            I’ve never before seen you rail against any government subsidy that wasn’t green. Perhaps in the future you’ll be more balanced? Because the truth is that the subsidies for electric cars are chickenfeed compared to the corporate welfare for Big Oil.

          • 0 avatar
            orenwolf

            There won’t be a tax credit by the time I get my vehicle. You have no issues there.

  • avatar
    Pch101

    I would guess that there is a not-so-insignificant percentage of reservations that were placed by those who made one or two reservations with the intention of flipping them.

    But there’s no way to guesstimate that figure now. We’ll have to wait and see what happens when it becomes possible to order the cars.

    • 0 avatar
      mcs

      I agree, it will be interesting to see what happens when ordering time comes around. Hyundai has already announced a 200 mile version of the Ioniq. Nissan will have announced the 200 mile Leaf by then and probably an Infinity that will be aimed at the Model 3. There’s bound to be some kind of impact on the list.

      • 0 avatar
        heavy handle

        The choice between a Model 3 and a Leaf/Bolt/Ioniq seems obvious to me, but I like cars. There may be people who prefer a Sentra-like experience.

        • 0 avatar
          mcs

          The Bolt will probably be $40k+ before it’s equipped like a base Model 3, the Ioniq lacks charging infrastructure and I’m not sure if their smart Cruise Control is equal to autopilot. Handling on even the current Leaf can be tweaked, but my son’s $13k iA has a stitched fake leather and chrome interior that puts the Leaf interior to shame.

          I want to avoid a first year Model 3. I may end up adding an S to the fleet if I need another car before that happens.

  • avatar
    ilkhan

    When we were lined up outside the store the employees were explicitly saying you could go through the line more than once, you were just limited to two per order.

    • 0 avatar
      BlueEr03

      It is a nice analogy, but that store isn’t having its stock price determined by the amount of people going through the line. What the writer on Seeking Alpha is point out is that a nefarious stock holder could have bought the stock, did 200K pre-orders, watched the value shoot up, and then sell the stock for a profit. Then, he could buy a put, back-out of his 200k pre-orders, watch the stock plummet, and profit again.

      At least that is what I would do if I had the money and was so inclined.

      • 0 avatar
        ilkhan

        I understand the implications, just pointing out it wasn’t much of a loophole. Nor do I think that is what happened to get those pre-orders.

        It’ll play out on its own.

    • 0 avatar
      JimZ

      you’re actually admitting you stood in line for this?

      • 0 avatar
        VoGo

        Believe it or not, JimZ, there are people out there who are enthusiastic about cars. If you find that so hard to believe, maybe you don’t belong here.

        • 0 avatar
          JimZ

          I’d wager a lot of the people who actually stood in line to put in a reservation are *not* actually enthusiastic about cars in general.

          • 0 avatar
            VoGo

            If you are so fond of wagers against TSLA, why don’t you short the stock?

            Or are you a man of just talking, not a man of action?

      • 0 avatar
        orenwolf

        It’s come to this, then. Enthusiasm for a product should be the object of ridicule. If you don’t make vehicle purchase decisions without emotion, you are “weird”.

        Maybe it’s because I didn’t get my license until almost 30, but I haven’t forgotten the thrill and wonder of driving, and the joy that comes from being enthusiastic about a new car.

        I’m sorry that emotion is no longer an acceptable part of the automobile experience for you any longer. :(

  • avatar
    DeadWeight

    The more I read, hear about, analyze & read of Tesla’s Model 3, the more convinced that Tesla is on “borrowed time,” and that even an enormous cash mountain (which Tesla does not have, and in fact it has a pretty rapid cash burn rate) could not sustain Tesla through 1/2 the Model 3 pre-order build & delivery process, let alone the entire pre-order slate.

    This is a single’vehicle, priced at roughly 1/2 that of a Model S, with Tesla losing money on the production and sale of each one, that somehow Tesla is going to be able to’scale up production of (factory, tooling, component supplies, assembly, finishing, etc.) and somehow, not only actually build & deliver them, but do so profitably.

    The biggest red flag with the Model 3, however, is something even more basic; it appears that Musk employed a very social media-driven “go fund me” like exercise, in order to spur buzz and media attention, translating into free media/advertising, and which to keep the momentum talk of an alleged new $35,000, 215 mile-range Tesla Model 3 perpetuating/spawning.

    Think about it: Tesla just spawned 400,000 orders and $1,000 deposits for a vehicle that doesn’t yet exist, nor is there any indicia Tesla can actually build it (logistically) and sell it at anywhere near that price (let alone profitably), while giving some pretty approximate dates as to when the first batch of Model 3s will be built and delivered (and addressing no specifics in real detail about their ability to manage such a large production run, period, let alone at a profit).

    There’s much to admire about Elon Musk if one is looking, but the Model 3 marketing, promotion and entire roll-out, with $1,000 “pre-orders” and its vagueness all around, smells like rank amateurishism, the likes of which one would expect from a unicorn-projecting start-up, and not an established manufacturer of real products.

    • 0 avatar
      SCE to AUX

      Mostly valid points, but you do realize that 800-some people received rides in several Model 3s at the reveal event, right? And that these same cars are now being spotted in the wild?

      My point is that the car *exists* and is driveable, which means many of the engineering problems are already worked out. Producing it with volume and quality, and affordably, are the real hurdles, as you said.

      However, with Tesla’s battery pack price being around $190/kWh, they might even make money on it.

      • 0 avatar
        accord1999

        They had ride alongs in the Model X in 2012 as well.

      • 0 avatar
        JimZ

        you do realize that the Model 3s that “exist” right now are basically the same hand-built prototype level that other automakers wrap in camouflage and vinyl covering, right?

        people keep acting like Tesla is something other than a car company when they aren’t.

        “However, with Tesla’s battery pack price being around $190/kWh, they might even make money on it.”

        being generous and assuming the base 3 will have ~ 45 kWh of battery, that’s still over $8000 for the battery alone. they still have to build the rest of the car (including power electronics and drive train.)

    • 0 avatar
      porschespeed

      Dig deeper into the rabbit hole – it only gets better (and by “better” I mean more impossible).

      The question is merely whether investors continue to buy the quixotic nonsense of the slippery South African – who has never delivered anything automotive as promised. If people turn off the money hose, Tesla vanishes in months, if not weeks. I have no idea after the fiasco that was The Roadster why anyone stayed on the bus when it was obvious that the driver had no idea what he was doing, or where it was going.

      There are many differences between Elon’s magical fantasy company and old GM to be sure. But the fanbois remain the same. No understanding of revenue, P&L, reading a 10K, debt, what it takes to manufacture anything, let alone a car, supplier chains, none of it.

      But they will swear on their mother’s eyes that their pied piper is playing a different tune. That Shai Agassi or Malcolm Bricklin are not con artists, that they have a profitable company if only we *believe*.

      • 0 avatar
        SCE to AUX

        “The question is merely whether investors continue to buy the quixotic nonsense of the slippery South African – who has never delivered anything automotive as promised. If people turn off the money hose, Tesla vanishes in months, if not weeks. I have no idea after the fiasco that was The Roadster why anyone stayed on the bus when it was obvious that the driver had no idea what he was doing, or where it was going.”

        Nothing in this paragraph makes any sense.

        • 0 avatar
          porschespeed

          “Nothing in this paragraph makes any sense.”

          English as a second language? Let me rephrase in even more simple terms…

          Are there enough financial illiterates out there to keep the stock pumped to ridiculous levels? Are they finally going to stop believing in a man who has delivered nothing on time, or in budget? If the stock tumbles, the whole thing crashes and burns. After seeing what a complete lie-filled cluster-eff the Roadster was, why in the hell would anyone believe anything he has to say? It was obvious that Musk knew nothing about cars or car companies then, and knows just as much now.

          There was reason Musk was kicked to the curb shortly after the X/Confinity merger which became PayPal, long before the eBay sale. Protip: It wasn’t because he brought too much to the table.

          25% of Tesla paper is borrowed for the short. That percentage went *up* with the ridiculous pre-sale of a vehicle that is even less likely to happen because of the stunt.

    • 0 avatar
      faygo

      ok, where’s the real DeadWeight ? clearly you’ve replaced him (her?) with a much calmer version and tried to pass it off as the real thing.

      your points about ability to deliver a profitable (or even non-money losing) Model 3, in the timeframe promised are very well made.

      at this point Telsa is keeping the hype machine rolling, making sure they can keep their stock valuation high (and therefore their employees well paid, they are not paid prevailing Silicon Valley wages btw, nor even more than normal auto industry is my understanding, but they make it up in stock options, as long as the value stays high. not sure how the corporate accounting works for that in terms of what I would assume is continuous dilution of stock) and keep the lights on.

      I think the independent business end game/future state for Tesla depends on their promised reduction in kWh battery costs AND being able to somehow scale the rest of their cost structure to not be so bad from a margin perspective. alternatively, they could be aiming for an acquisition by another auto maker (or a non-auto company, see potential Google/FCA connection revealed last week) which will come before they are forced to become profitable.

      I have no doubt that the 3 will improve on the feature set of the S, offer the same driver experience and therefore reach a broader audience. when this happens, at what actual price it a whole ‘nother question. the order bank is an indication of the (initial) demand in the segment of the public which can’t stretch to an S but wants to get in on the geek chic which the Tesla brand provides. same thing would happen if there was some lower rung of the market if Ferrari announced an $100k car and opened up an order bank.

    • 0 avatar
      ilkhan

      Tesla makes money on each model S. True they spend that profit and more on R&D, but if Tesla stopped trying to expand super super fast they could be in the black anytime they chose to be.

      • 0 avatar
        Pch101

        “True they spend that profit and more on R&D, but if Tesla stopped trying to expand super super fast they could be in the black anytime they chose to be.”

        The finance gods weep uncontrollably when they read comments like this.

        • 0 avatar
          orenwolf

          pch101, you are literally the god of substance-bereft comments.

          You like to make comments about how amazing your finance acumen is, but never with any details. “You’re wrong, because I know more than you” is a pretty vapid comment.

          Tesla is literally trying to double the world production of lithium batteries. They’re building out a network of charging stations, stores, and service centres. and, they’re engineering a new vehicle platform. Oh, and ramping up production for that platform as well.

          If instead they settled back and just sold model S/Xs with existing infrastructure, they’d be making a profit. Why *that* is difficult to understand is beyond me. But I think it’s primarily because it’s more fun to say “Tesla is losing money on every car!!!11one” without analysis.

          • 0 avatar
            Pch101

            You know nothing about finance. Are you interested in learning anything or not?

          • 0 avatar
            orenwolf

            pch101:

            I don’t assume my target audience are know-nothings, because I’m frankly not a) into myself to do that, or b) in need of propping up my own status by trumpeting how much I “know”.

            I’m interested in learning about a great many things. I look forward to learning about how Tesla is going to bring the model 3 to market.

            I’m not especially interested how unproven commenters insist they know more than everyone else, without details other than “because I know more than you”, no. Because funny thing about that kind of “learning”.. the world tends to go on around those people in spite of their best efforts. :)

            That being said, no one in this community, myself included, would turn down a reasoned, researched discussion about why someone believes their plan will ultimately fail. I just don’t believe “because they aren’t making money and don’t have the scale today” is a particularly good argument for why. Especially without insider information about their development plans and supplier contracts.

            Unfortunately, all there’s really been is, in my opinion, wild speculation and “I know more than you so I won’t even bother with a detailed response” sort of comments. They’re fine too – they’re even entertaining. Someone should collect them all somewhere so we can look back on them in a few years and actually see how “smart” everyone really was. :)

          • 0 avatar
            Pch101

            The comments about R&D are painful to read.

            Just because a cost isn’t included in gross margin doesn’t mean that it isn’t a necessary cost.

            R&D isn’t an optional cost. You only look dumb when you keep bringing it up as if not having it is a possibility.

          • 0 avatar
            orenwolf

            Clearly no one here (at least, I doubt anyone here) believes R&D as an absolute is an unnecessary cost for any automaker. However, I challenge to you find another automaker who is spending as much, as a percentage of overall gross income, on R&D, as Tesla.

            That percentage will decrease as revenues increase and scale increases (sooner or later the gigafactory will be online, the factory has fixed startup costs, etc etc). Of course there will still be incremental costs. Tesla will need to absorb the fixed costs to scale up while finding efficiences in incremental costs so that their overall margin increases. That’s business 101.

            their rate of R&D will *not* need to continue to be such a large proportion of their income as a percentage of gross revenue in the future. Right now, it’s massive. And I doubt that’s difficult to understand.

          • 0 avatar
            Pch101

            In 2012, we were told that the lower cost Tesla would be released in 2015.

            Now we’re being told that the car will be ready in 2017, two years after its original release date.

            Gee whiz. Could it be possible that the car is at least two years late because the R&D spending hasn’t been high enough to pay for it?

          • 0 avatar
            mcs

            @pch101 – n 2012, we were told that the lower cost Tesla would be released in 2015. Now we’re being told that the car will be ready in 2017, two years after its original release date.

            The quote that I’m finding is something along the lines that they “aspire to have the 3 to market in early 2015”. In October of 2013, I found a video where is said his “best guess” was Q1 of 2015 for a prototype.

            Maybe he said something else on another occasion, but I don’t have time to search for it. He seems to be hedging in both cases I found. Saying “guess” and “aspire” and “prototype” are far from a promise to release the car.

            So, maybe I’m wrong. Find a quote where he promised the car in 2015. Worst case, his guess for the prototype was off about a year.

            I admit, I might be wrong, but otherwise it seems like you’re a bit sloppy at research. Though I must admit I’m guilty of the same thing here since I’m not getting paid and don’t have time to be thorough.

            http://insideevs.com/elon-musk-tesla-model-e-prototype-to-be-revealed-in-early-2015-wvideo/

            http://www.greencarreports.com/news/1072899_after-model-x-tesla-to-sell-cheaper-electric-2015-roadster-to-follow

          • 0 avatar
            Pch101

            “Truly Affordable Tesla Electric Sedan to Launch in 2015” is not exactly an ambiguous headline.

          • 0 avatar
            porschespeed

            Pch101, What you’re witnessing is known technically as the Dunning-Kruger Effect…

            https://en.wikipedia.org/wiki/Dunning%E2%80%93Kruger_effect

            I remember back when I spent time typing long explicit paras explaining exactly why old GM was irrevocably doomed to BK. I remember the brilliant commentators like orenwolf who couldn’t find the line for R&D in a 10K, let alone know what any of it meant. They don’t know cap-ex from contango. But they’re gonna tell you, because believing hype is all they know.

            There’s an appropriate quote credited to Samuel Clemens about playing chess with a pigeon.

          • 0 avatar
            orenwolf

            Whet the hell are you talking about? When did I ever say R&D wasn’t an expense? I’ll say it again, Tesla’s R&D as a percentage of overall revenue is insane right now, and, as a percentage, will surely decrease. That’s not complicated. I never said other companies didn’t have R&D costs (like, seriously?)

            Ad hominem attacks rather than substance. Porschespeed, or unsafe at any speed?

            It’s ok though. The awesome thing is, Tesla will continue regardless, and I’ll either have a model 3 or I won’t. I at least put up a few token dollars out of respect for progress. :)

          • 0 avatar
            Pch101

            You have to forgive me. Between the years that I have spent in finance and the MBA that I earned at a top-tier school, I have no idea what “insane” R&D spending is supposed to mean.

            What I do know is that Tesla’s product launches are severely delayed, which is an indication that there isn’t enough R&D spending to keep things on schedule. Inadequate, not insane.

          • 0 avatar
            porschespeed

            No orenwolf, it’s not an ad hominem when it’s a statement of fact. You have posited exactly zero factual rebuttals, merely parroted Musk’s press releases which have been debunked time and again. I’m sure that doesn’t jibe with your “feelz”, but you can’t factually refute pch101, or me.

            You don’t know what you’re talking about.

            You have no idea what auto companies generally spend on R&D. You have no idea what the costs are with adding 4 times the vehicles you have produced to date, into the ecosystem, when they are required to have infrastructure that the company must fund.

            You don’t think, you don’t analyze, you only “believe” and “feel”. Which is wonderful for a motivational speaker. It means sweet FA when looking at the viability of a company.

            So, get some actual facts from the 10K, get some knowledge of finance, learn how the world actually works. Make a case. Because right now, you have less than nothing.

          • 0 avatar
            orenwolf

            “No orenwolf, it’s not an ad hominem when it’s a statement of fact.” – I think you better re-read your dictionary on what a statement of fact is. I’ll leave that as an exercise for the reader.

            “You have posited exactly zero factual rebuttals” – you mean as opposed to yours? There’s no *facts* to rebut in any of these comments! Everything has been unsubstantiated opinion!

            “merely parroted Musk’s press releases” – Really? Please show me the lines I copied from the press release. I don’t think I’ve even used the same terms anywhere. :D

            “which have been debunked time and again . I’m sure that doesn’t jibe with your “feelz”, but you can’t factually refute pch101, or me.” – Hilarious the level of cognitive dissonance here. You understand that in order for me to refute a fact, you have to post one, right? When you say “The facts are…” that doesn’t actually make them the facts – you understand that, right? Because you haven’t posted any “facts” at all! Just your own opinions! I’d laugh if I wasn’t literally flabbergasted by the argument :D

            “You have no idea what auto companies generally spend on R&D. You have no idea what the costs are with adding 4 times the vehicles you have produced to date, into the ecosystem, when they are required to have infrastructure that the company must fund.” – See, there’s the problem. You think these are facts. Look closely, there are no facts in this statement! You are, instead, telling me what I know, from a supposed place on high where, I guess, I’m supposed to believe you *do* know these things? I can say that you are blue and don’t know how to cook a danish, the statements are about as relevant as your opinions here :D

            “You don’t think, you don’t analyze, you only “believe” and “feel”. Which is wonderful for a motivational speaker. It means sweet FA when looking at the viability of a company.” See, that’s the difference here. You’re right, I haven’t tried to make false statements of fact.

            But then, you see, *neither have you*. The difference is, I haven’t tried to pretend that I have. I have more integrity than that. :)

            Now, because I believe all comments here deserve some substance, rather than discussing the above:

            I *choose* to believe that Tesla is making a good-faith attempt to scale up and produce these vehicles. I choose to give my hard-earned money in deposit as a show of support for their efforts. I believe this to be fairly common in smaller-scale startups (see: Kickstarter), but uncommon in large scale enterprise, especially the automotive sector. Therefore, I believe it to be something new, and, clearly from Musk’s own comments, and unexpected level of interest. I believe that this is a net positive for the company. Will they succeed? I have no idea. Based on the information I have, I believe they will, and clearly given the number of deposits, so do many others.

            That doesn’t make me a fanboy, or even all that “emotionally vested”, as DeadWeight suggests – I can get a refund anytime, and I just got a new, awesome car, so it’s not like my world will end or something if I don’t get a model 3. But I think, perhaps, that I am making a decision from somewhere that many car-buyers haven’t for a long time – I’m choosing to hope that we’re at the beginning of a change to the industry, and to the automotive landscape as a result. I don’t buy cars based on statistics and lap times, I drive the thing, I understand it, I see how it feels, how it looks. The model 3 *feels* like something that, should it exist, I would like to have. So, I support them. I choose to believe they will sincerely attempt to make that happen. Others choose to believe it *cannot* happen, for reasons from past history to balance sheets to a belief that Tesla is working in bad faith and actually does not intend to even try to produce these vehicles. You are welcome to those opinions. I disagree.

            The wonderful part of this all is that time will tell. We’ll see how they do. And these comments will be a testimony to how we, as car enthusiasts, chose to react to these events at the time, and as judgement on the validity of our opinions as they pertained to the bigger picture. THAT, I look forward to most of all.

            Thanks. <3

          • 0 avatar
            porschespeed

            Ugh. You can choose to believe the moon is made of green cheese, it doesn’t make it, you know, real.

            So go ahead and hit that bong again. I remember your ilk from the GM BK days. Your misery will be delicious, especially if you put your money where your mouth is, and bought the stock.

            Please go buy the stock.

          • 0 avatar
            orenwolf

            Sorry. Had nothing to do with GM.

      • 0 avatar
        accord1999

        They actually spend that profit on their retail and service operations.

        • 0 avatar
          VoGo

          People sometimes have to be reminded that Tesla doesn’t just make cars, they sell them as well. It’s weird that the same people who hate the standard dealership business model are the same ones who hate on Tesla. What DO you want?

          • 0 avatar
            Kenmore

            “People sometimes have to be reminded …”

            Thanks for stepping up. Like Linus, who was always eager to educate the simpler children about the Great Pumpkin.

          • 0 avatar
            VoGo

            We have a lot in common. Bossy sister, receding hairline and belief in the unpopular.

          • 0 avatar
            Kenmore

            “belief in the unpopular”

            Medical leeches are unpopular, too. Now.

        • 0 avatar
          Pch101

          There are no profits.

          • 0 avatar
            VoGo

            Hold on. the analyst community expects TSLA to break into profit in Q2 of this year, which we are currently in. So you are correct that profits in the past were rare, but to say there are no profits is to ignore the very real performance by TSLA and reasonable expectations.

          • 0 avatar
            orenwolf

            The “why” of no profits is more important than the “what”. It’s easy to say “But.. But.. There are no profits! ;(“. Those same people are going to lose their shit when there are, because the “why” Tesla made the margin choices they did appears to have eluded them, and a payoff in that plan is unthinkable.

            It will be fun to watch.

          • 0 avatar
            Pch101

            Certain members of the TTAC illiterati are fond of claiming that “Tesla spends its profits on blah, blah, blah” when there are no profits. I am merely correcting that factual misstatement.

          • 0 avatar
            VoGo

            Fair enough. A lot of people who are not in business don’t know the technical definition of profits (i.e. revenues minus costs).

            His point around Tesla owning distribution remains a meaningful distinction vs. other automakers.

            I like the term “illiterati”!

          • 0 avatar
            Pch101

            “His point around Tesla owning distribution remains a meaningful distinction vs. other automakers.”

            Yes, I’ve pointed out how that has the effect of distorting gross margins. Failing to net out the sales costs that accompany those retail sales will mislead the hapless fanboy.

          • 0 avatar
            VoGo

            Agreed!

      • 0 avatar
        JimZ

        If they “spend it on R&D” then it’s not profit. that’s all PCH is saying. They may be revenue positive on vehicle operations (the actual day-to-day business of building and selling cars) but if they burn that revenue designing their future products, then they’re by definition not profitable.

        otherwise, by your definition the Detroit 3 were “profitable” all the way up to bankruptcy, since even then they were still selling cars for more than it cost to build them.

        • 0 avatar
          Pch101

          The illiterati don’t understand that the high cost of R&D is one of the primary barriers of entry into the car business. It costs hundreds of millions of dollars to develop even a simple car, and the need for constant continuous improvement and periodic model upgrades ensures that it isn’t possible to simply stop spending money on it.

          • 0 avatar
            VoGo

            Yes, the high cost of R&D is a primary barrier into the traditional car market. But if you believe that future cars will be electric and autonomous, then the advantages of traditional automakers are an illusion.

            No traditional automaker has an advantage over Tesla in developing and building batteries. None has an advantage in electric propulsion. None has a real advantage in autonomous technology. And none has an advantage in building a brand that connects directly with consumers.

            Telsa is building meaningful advantages in the capabilities required for what they see as the future of the automobile. You may not buy into that vision, but you would be foolish to ignore their achievements, or their pace of growth.

          • 0 avatar
            Pch101

            Honestly, your comment makes no sense at all.

            Cars need platforms and drivetrains and NVH development and the rest, irrespective of the fuel that propels them. It isn’t magic, it’s just math.

          • 0 avatar
            VoGo

            No sense at all? PCH, you’re a smart guy, and you often make good points, but sometimes you’d benefit from seeing the other side of the issue before being writing.

            Tesla has shown competence at all the capabilities you’ve mentioned. As it turns out, none of them is rocket science (something that Musk actually does know something about).

          • 0 avatar
            Pch101

            This notion that electric cars are immune from basic industry issues is just silly.

          • 0 avatar
            porschespeed

            pch, they’re just two ignorants, who don’t know enough to know that they’re ignorant.

            Kinda sad, really pathetic, and the thought they get to vote is terrifying. What an gross failure of education they prove.

            Neither has had a response actually worthy of a response, because, (back to playing chess with pigeons)…

          • 0 avatar
            orenwolf

            Yet another vapid comment from porschespeed that’s just personal attacks. Fun!

            I agree R&D is a critical component of, and a barrier of entry to, the car industry pch101. I contend this is precisely why Tesla has not turned a profit. I disagree that this cannot change, and I wonder what your response will be should they, in fact, turn a profit. Time will tell. :)

          • 0 avatar
            VoGo

            That’s Porschespeed’s specialty – insults and nonsense.

            I expected better of PCH. It’s one thing to be entrenched on an issue. It’s quite another to be a d1ck about it.

            Tesla will release Q2 earnings in 3 months – we’ll see what tune they sing then.

          • 0 avatar
            mcs

            >> Cars need platforms and drivetrains and NVH development…

            NVH development? We’re talking about EVs here, so the NV part isn’t difficult. No emissions testing and design to deal with – ask VW about that one. No transmission design and testing. No engine development, just pull out the electric motor supply catalogs. Panasonic, Sanyo, and lots of little labs doing the batteries.

            If they’re smart, that base skateboard underneath should be scaleable across their entire line. Just incrementally improve the motors, batteries, inverters, HVAC components, and they should be good for a number of years.

          • 0 avatar
            Pch101

            “Low-volume automaker with scale” is an oxymoron.

          • 0 avatar
            porschespeed

            “Yet another vapid comment from porschespeed that’s just personal attacks. Fun”

            Yup, it’s downright hilarious that I remind you that you know absolutely nothing about the business model that you praise.

            You don’t understand simple cause and effect relationships like ‘if you lost money building and supporting 120K cars at $90K each, imagine how much money will be lost when you try to build and support 3 times as many, at one third the price’.

            These little nuggets of wisdom you should have learned by 5th grade are lost on you.

            So, do shout all the safe space nonsense you want. I’ll be right, and you’ll be wrong, when it all wraps up. It’s hard to pick a winner, but it’s easy to pick a 2 alarm dumpster fire.

            Buy the stock. If you actually have some retirement money, put it all into Tesla. Please. I promise I’ll chuckle a bit as I’m spending your cash, just like I did with old GM stockholders.

          • 0 avatar
            orenwolf

            Porschespeed:

            I’m sorry you believe scale is inherently linear. But it matters not. Time will tell in the end.

            Bonus points for the “safe spaces” comment though. I think you forget what blog this is, though. There ain’t no such thing. The truth doesn’t leave any spaces to hide behind. I can’t wait until we get there.

            <3! Thanks for the fun!

  • avatar
    PrincipalDan

    I’ve reached a point with Tesla (as I have with VW Dieselgate News) were I can’t even muster up the energy to “Meh.”

    There does seem to be a Model S running around the area and I find it so highly unusual that the only thing I care about is finding out who is driving it, just to see who counts as an “EARLY ADOPTER” in my impoverished & highly conservative part of the country.

    • 0 avatar
      orenwolf

      You’re probably exactly right, because that was the target customer for that car. Early adopters.

      • 0 avatar
        porschespeed

        Early adopters? That was supposed to be the electric-Elise, err, Roadster.

        Pushing 20000 cars a year is supposed to make money. Let alone 50. Damn, is there heroin in that kool-aid? Or just LSD?

        • 0 avatar
          orenwolf

          Wait, you honestly believe that model s drivers *aren’t* early adopters? What are they then? Mainstream car buyers? Because certainly “the affluent mainstream” isn’t the model S buyer – it’s tech-saavy, affluent, early adopters – the same crowd that I’d expect to be first in line for the next iDevice, in fact.

          How many mainstream car buyers are out there getting volts even? Or leafs? Did electric cars hit mainstream? Did I miss it? Is it a decided question now that mainstream car buyers will buy as many electric cars as, say, the prius?

          If you can honestly take a step back and tell me that that *hasn’t* been the market for tesla until now, I have some swampland in florida to sell you.

          I appreciate that the main reason for your comment was to attack me, but still – try a little harder for substance there. :) Thanks!

          • 0 avatar
            porschespeed

            Maybe the first 1000. Were those Tesla buyers “early adopters”, or is every Ferrari/Lambo/Maser driver an “early adopter”. They make cars that they produce less than 5000, or 500 of. *They* can make money doing it, why can’t your beloved Elon?

            The Model S buyer is an upper-middle who sees personal financial benefits from the illusion of driving a “green car”. It’s an eco status-symbol, much like a Prius used to be. All about image. Remember when Hollywood elites sported a Prius? Same thing.

            Tesla is what the plebes see as eco-jewelry. There will be very few who will have the money to actually buy a $40K+ Model 3, not that it will ever happen.

            The one who has no points is you, but in your typical fashion, you dismiss reality and substitute your own.

            Good luck on that. Do invest any savings that you have in Tesla. I’ll be taking it from you as the stock tanks.

          • 0 avatar
            orenwolf

            Thank you. As I said, not mainstream.

  • avatar
    Russycle

    I guess I’m supposed to be outraged about this, but I just can’t manage it. Either people believe in Tesla’s vaporware so strongly they’re willing to invest 20 grand for the chance to flip a few model 3s to people with more money than sense; or they’ll demand their deposits back before delivery, effectively giving Musk an interest-free loan. I’m not seeing how this anything but a win for Tesla.

    • 0 avatar
      TonyJZX

      I, unfortunately, agree with Russ. This is like the classic TTAC argument that ‘fleet sales don’t matter’… fleet pays in real actual money just like you and me (presumably).

      For Tesla, one would probably agree that XX% of the preorders will never eventuate.

      2018 etc. is a long way away and we may have another recession or maybe one of the majors will release a 300 mile range competitor for $25,000… Tesla is bound to refund some preorders. So if a few guys have their 20 preorders refunded then… so what? Arent they 300,000 plus booked out?

  • avatar
    Jack Denver

    “casting doubt on the legitimacy of the model’s 400,000 reservations”

    Tesla is a scam! Only 2 guys have reserved Model 3’s – each one reserved 200,000 cars!

    This whole “story” is a non-story. Why would anyone in their right mind reserve more cars than they intended to buy? If they intended to sell their line positions, these would still represent legitimate orders, just not to the named original purchaser.

  • avatar
    philadlj

    Sunday’s Silicon Valley got me thinking:

    Tesla’s product isn’t cars or charging stations or home energy storage.

    Their product is their STOCK, right?

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