By on November 13, 2017

Tesla Model 3, Image: Tesla

Patience, as we’ve been told, is a virtue. Therefore, the most virtuous individuals occupying the ball of mud we call Earth must be the Tesla faithful currently awaiting their pre-ordered Model 3 sedans. The speed of the vehicle’s launch has been sedate, to say the least. Tesla Motors finds itself plagued by production bottlenecks, which hasn’t helped the already long wait times facing those who dropped a sizable wad of bills just for the privilege of eventually owning its latest model.

However, the lengthy intermission between launch and ownership doesn’t appear to be diminishing their love for the company — a testament to the brand’s difficult-to-tarnish image. Fans of the automaker seem content to wait it out in tranquility like Siddhartha Gautama under the tree of enlightenment. 

Bloomberg reached out to 20 Model 3 reservation holders this month, noting that not one had canceled their order. “I just want Tesla to get the Model 3 right, even if it takes them an extra six months,” said Brian Lawley. “I view any delays as a good thing to make sure that the quality is excellent.”

Lawley reserved his Model 3 almost two years ago and doesn’t seem bothered that Tesla Motors has pushed back its original production timeline by over three months. The new goal is to produce 5,000 Model 3 sedans per week by March, instead of the previous December target.

“We believe there is a real passion for the brand,” Nomura analyst Romit Shah wrote in a report underpinning a ludicrously high $500 share price target for Tesla. “It is bigger than loyalty because much of the enthusiasm comes from people who have never owned a Tesla. The only comparable we see is the iPhone.”

Whether or not Tesla’s shares ever hit that mark, the brand already trades at almost double what Apple currently does — making anyone who invested prior to 2014 a fortune. However, the parallels with Apple are fair. While many don’t see the inherent value of waiting in line for the next iPhone, those that do are absolutely convinced of it. Tesla is no different. The hype surrounding both companies is a major source of their power and a prominent factor in their continued success on Wall Street.

“It seems to me that people would be willing to wait since they were never given a firm date when they would take delivery in the first place,” Edmunds analyst Jessica Caldwell said in an email to Bloomberg. “The long wait seems to be building anticipation.”

However, people won’t be willing to wait forever. In August, CEO Elon Musk said around 63,000 people had cancelled their reservations with Tesla. That said, it’s difficult to know what to attribute that to or how much it would hurt the company — especially since new orders continue coming in every week. Until Tesla says otherwise, the Model 3 looks to be holding strong with over 500,000 reservations.

For the automaker to truly take a beating on this, the launch of the Model 3 would have to be an abject failure or become subject to hundreds of thousands of cancellations in the next year. Many have expressed concerns about the possibility of losing electric car tax credits in the United States, but even that doesn’t seem to be a deal-buster for some reservation holders.

“If it goes away, I’ll just have to adjust my budget and pay,” explained Raymond Nash, who reserved his Model 3 the second the option became available. “I’m not happy about the delays, but I’m willing to wait. We know that Tesla has made a few hundred Model 3s, so we know that it is real, and we know that more are coming.”

The company’s plan to ensure that involves a major production bump before next spring. October estimates have Tesla assembling around 42 Model 3s per week. By March, the factory aims to increase average volume to 5,000 units a week. That will be followed by a dual-motor all-wheel drive version of the car and a cheaper offering using Tesla’s standard battery pack — both of which are expected to arrive before the end of 2018.

[Image: Tesla Motors]

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48 Comments on “The Model 3 Is the Tesla Faithful’s Personal Bodhi Tree...”


  • avatar
    I_like_stuff

    It’s the car iPhone. Doesn’t matter the price or whether or not it’s a good product. The sycophants will BUY BUY BUY!!

    $500 is right for the price target.

    • 0 avatar
      stuki

      IPhone is a good product. As is a Tesla. This kind of hype wouldn’t last otherwise.

      Both cars and phones are such mature technology, that they are by now all good. The differences between competing products are small, in any kind of absolute sense. Exactly which one someone chooses, has more to do with what image he wishes to project, and which “tribe” he wishes to display his allegiance to, than with any real practical difference between one and another.

      If the guys standing in line to buy either a Tesla or an Iphone were truly disappointed with what they received, they wouldn’t stand in line next time. But instead, they get a better phone/car than the last one, and one that is no worse than the one their neighbor has. Allowing them to continue to cling to the notion that theirs is the bestest, and that those buying something different, are somehow not as “smart” as they are.

  • avatar
    SCE to AUX

    They didn’t reach out to me. I test drove a Bolt this weekend, so I remain on the fence with my Model 3 reservation.

    The Bolt is the first GM car I’ve ever considered getting. It’s not perfect, but it’s available.

    • 0 avatar
      theBrandler

      You are exemplary of a problem I’ve seen with Tesla’s plan for a while now. By the time you can buy your Tesla, every luxury brand will have a competitor on sale, and most normal brands will have a decent electric offering. Not great, not, but decent.

      Tesla doesn’t’ advertise. Get out of the city and ask people what they think of Tesla. You’ll find most people don’t know what it is, or wonder why you are suddenly asking about a crazy scientist.

      Average folks who want electrics to save money on gas for their commutes are going to buy average electric cars from average dealers. That’s going to be a huge problem for Tesla once all the preorders are satisfied.

  • avatar
    DeadWeight

    The Tesla faithful are as delusional and ridiculous as Scientoligists.

    Elon Musk is their L. Ron Hubbard.

    Tom Cruise, John Travolta and R Kelly still won’t come out of the closet.

    • 0 avatar
      brandloyalty

      To equate Tesla with Scientology may have an aspect that some may claim is valid, but otherwise the comparison is ridiculous and irresponsible. Get a grip.

    • 0 avatar
      Luke42

      Hey, that’s a little harsh.

      Scientologists have to give their fortunes to their “church”, and they don’t even get a sleek-looking high-tech green car with a 6ish-second 0-60 time in return!

      Seriously, Tesla folks are car guys. We’re not married to the dino-juice or the engines that burn it, and we’re willing to put up with Musk’s “optimistic” product announcements. But it’s all about the car — there really is nothing like it on the market, and so we’re understandably excited about it. Because car!

  • avatar
    ClutchCarGo

    “October estimates have Tesla assembling around 42 Model 3s per week.”

    Seriously? 6 a day?

    • 0 avatar
      indi500fan

      It’s been reported by a number of sources that these are hand built prototypes rather than production pilots. In true Muskian fashion, they are termed production units, given VINs, and shipped off to (Tesla affiliated) owners.

      • 0 avatar
        SCE to AUX

        @indi: To clarify, all it takes is one process step performed manually for the entire output to slow to a crawl. Tesla has already admitted to a problem with battery pack construction, and there are probably other areas as well.

        There are unfinished aspects to the car, to be sure, but they aren’t really ‘hand-built prototypes’ in the old world sense.

        • 0 avatar
          anomaly149

          No one really does hand built prototypes in the “old world sense” anymore. A good number of OEMs are straight to production tools now. 6 per day is “6 months before the car goes on sale” territory for most OEMs…

          And, yeah, this is the fourth Tesla vehicle and a mass market product, it’s totally fair to compare them to GM at this point.

    • 0 avatar
      SCE to AUX

      6 a day is double the rate from September. When the robots take over, the production rate “will blow your mind right out of your skull”.

  • avatar
    th009

    “For the automaker to truly take a beating on this, the launch of the Model 3 would have to be an abject failure or become subject to hundreds of thousands of cancellations in the next year.”

    For Tesla to take a beating on Model 3, all they need to do is ship a few hundred thousand Model 3s. They will lose thousands on each one, so every sold car means more demand for additional cash.

    • 0 avatar
      brandloyalty

      Ah, another expert on Tesla’s finances.

      • 0 avatar
        Manic

        Well, there’s claims that on every Model S they make 25% (paper-)profit. Now Tesla tries to find profit on a car which they can sell for roughly 1/3 of the Model S price, is Model 3 really that much cheaper to build? We’ll see.

      • 0 avatar
        redmondjp

        Are you? Because anybody with the smallest rudimentary knowledge of Business 101 can see from their jaw-dropping negative cash flow that they will likely be bankrupt within a year or two. Even if they meet their production goals, they still won’t generate enough cash to keep the doors open.

        THAT part of the business is unchanging and completely understandable, regardless of what Teslavangelicals believe.

    • 0 avatar
      Ray Davies

      Musk is counting on unprecedented economies of scale and efficiency to sell 3s at a profit. The reality is they are failing to meet just about any of these goals.
      His projections were very unrealistic and he chained best case scenarios together to predict a profit without allowing room for any margin of error.

  • avatar
    indi500fan

    Assuming 6 days a week on two 9 hour shifts, they are producing one every 2.5 hours, pretty much in line with the hand building process that has been reported by various news outlets and blogs.

    So they only need to increase 120X to attain the line rate goal.

  • avatar
    Master Baiter

    I’d be shocked if actual demand approached 5K units/week.

    If EV demand were that strong, the Bolt would be selling in much higher numbers.
    .
    .

    • 0 avatar
      SCE to AUX

      Well, even 5k/week means a 2-year backlog on existing Model 3 reservations.

      The Bolt is currently production constrained, and until recently, wasn’t a 50-state car. GM has make very modest production estimates for it.

      But people really seem to prefer the Model 3. I prefer the Bolt’s user interface, but I’m suckered by the Model 3’s looks and space utilization.

  • avatar
    indi500fan

    I just read that 100 black employees are suing Tesla for having a racist work environment? How is that even possible in the progressive paradise of NorCal?

    • 0 avatar
      kurkosdr

      Anybody can sue anyone for anything, this doesn’t prove Tesla did something wrong.

      Back on topic, I want to see how the warranty story plays out. If Tesla gets flooded by warranty demands and people are left carless for months, that will be their end.

      • 0 avatar
        theBrandler

        Considering that’s already the reality for many Tesla owners, it won’t do a damn thing.

        Tesla’s real challenge will be selling to ordinary folks. iPhone comparison be damned, average Joe Sucker can walk into an apple store, empty his piggy bank, and throw the rest on his visa to get his gotta-havit iPhone X. That’s ~$1000. Average Joe Sucker cannot do that with $35k.

        There aren’t 5000 people a week who are going to line up to buy Model 3s, and those people who fall for the fanboy product worship are all already in line. Take note that they are down to ~500k orders, when at one point early in the year they were over 650k. The faithful are stretching to capacity to get this thing already.

        Tesla is a luxury brand. They suddenly think they will magically sell more Models 3s than C-class, A4, 3-series, ans ISs combined? It’s laughable. Camerys and Civics, other run of the mill cars barely sell 5000 units a week. And that’s on sub $24k cars.

        No that will be Tesla’s problem, what happens when the 5k a week production satisfies the last pre-order and the take rate drops to ~1k a week? That’s going to be a major slap in the face that might shake the investors glee and cause a stock crash.

        • 0 avatar
          SCE to AUX

          Well, the Model S YTD sales exceed these cars:

          BMW 7-Series
          Porsche Panamera
          Genesis G90
          Lexus LS
          Audi A8
          BMW 6-Series
          Jaguar XJ
          Maserati Quattroporte

          and it’s a close second to the Mercedes S-Class.

          Don’t forget that trucks outsell everything else, and their average transaction price is over $40k.

        • 0 avatar
          kurkosdr

          Average Joe Sucker will trade on his existing gas burner and subscribe to a 6-year payment plan, staying in debt for 6 more years so he can have the latest must have.

    • 0 avatar
      Ray Davies

      Right, nothing ever bad happens in a state with the right political party in charge….

      So what is the Utopia without problems you speak of, Texas? Florida?

  • avatar
    FOG

    Tesla will be the modern Tucker. Musk foolishly hired several former GMers. It was right around this time that the relationships with suppliers and Tesla went south.

  • avatar
    addm

    Well if TTAC feels so strongly about Tesla unviability, why don’t they start Tesla death watch series.

    • 0 avatar
      brandloyalty

      Verticalscope, which owns ttac, is Canadian. I found the article linked below, which exposes the influence of the fossil fuel industry in Canadian media, to be very interesting in the context of what I believe to be persistent anti-electrification sentiment in online, print and tv car publications.

      https://thetyee.ca/Opinion/2017/11/14/mair-media-unholiest-alliances/

      “The most influential world presence, more for bad than good, I would argue, is clearly the fossil fuel industry. Given the substantial concerns for environmental matters, climate change, pipelines, air quality, general health, integrity of our water supply as well as our lakes and oceans, and our economy generally, nothing in our midst has the impact of this all-pervasive industry.

      Indeed, I would argue that what little ethical and moral foundation the country has is deeply threatened by the crumbling discipline of a fossil fuel based economy and the politics it spawns. Nothing requires government supervision in so many areas (and nothing has anything like the influence on government) as this industry. It follows that no other industry remotely requires the amount and kind of honest, wary media surveillance this one does.

      What has the media, especially but hardly exclusively the print media, done in response to this immense challenge?

      It’s joined fortunes with the petroleum industry. And a very large part of it has done so in print and in public. The facts are that the rest of the media have not raised a peep of protest at this unholiest of alliances and that governments contentedly and smugly pretend all that favourable coverage they get proves their efficiency — not that the fix is in and they’re part of that fix.”

      • 0 avatar
        redmondjp

        brandloyality,

        How much is Tesla paying you to post here?

        • 0 avatar
          brandloyalty

          @redmondjp: I have no involvement, directly or indirectly, with Tesla.

          But you raise an interesting possibility. How many hybrid and ev trolls on car enthusiast websites are on the direct or indirect payrolls of the fossil fuel industry?

          I don’t feel like investigating it, but there may be commenters who weigh in only on these subjects and always to bash electrification. The volume and persistence of misinformation about electrification reinforces the suspicion there may be paid trolls. We know such things go on, so why not on car websites?

      • 0 avatar
        mikey

        @brandloyalty

        The author of the article uses quotes from Post Media. The arch rival of the” right leaning” Post Media, would be the “left leaning” Tor Star Corp.

        Tor Star is the parent company of Vertical Scope that does indeed own TTAC. Vertical Scope is pretty well carrying the cash bleeding Tor Star. In fairness, Post Media is probably in bigger financial trouble.

        I’m not questioning the validity of your post sir..I just thought I would set the record straight re- TTAC

        • 0 avatar
          brandloyalty

          @mikey I appreciate informative and respectful responses, and I appreciate being corrected when I am wrong.

          That said, Torstar may be toward the left end of the Canadian press spectrum, but that spectrum itself is right-biased. To me, supporting the federal Liberals is not very leftist. Supporting the NDP or even the Greens would be. Mair may have used Post Media for his example because the evidence is more public or blatant, but that does not prove Torstar is not “in bed with” the fossil fuel industry. I would be shocked if they weren’t.

      • 0 avatar
        Toad

        If the media are in a conspiracy with the fossil fuel industry, they’re dong it wrong. Most (news) media companies are hemorrhaging money, readers, and viewers: if they were being bought off by any industry they would be in much better financial shape.

        The very real problems faced by Tesla are based on math, not conspiracies. Tesla may survive (and even thrive) but I’m not willing to bet any of my money on them.

        • 0 avatar
          brandloyalty

          @Toad: another quote from the article.
          “Thus, the largest Canadian newspaper chain has a deal with the Canadian Association of Petroleum Producers, the industry shill, which guarantees that the former will support the latter at every turn.”

          I doubt the oil industry cares whether any particular medium is healthy, as long as the industry controls the messaging.

  • avatar
    Nick_515

    This article would be strengthened considerably if it actually defined what “holding a reservation” means. Can someone enlighten me?

    • 0 avatar
      SCE to AUX

      Holding a reservation for a Model 3 means you’ve paid Tesla $1000 USD for a place in line to order one when your number comes up.

      It is refundable at any time, and you can delay your order for up to a year (I think) after you’re contacted to place an actual order. This delay permits you to keep your reservation, but to order the features you actually want which may not be available today – eg. AWD or normal range battery. Today’s product is only the long range RWD car.

      It’s a bit like paying to stand in line for Springsteen tickets. Once you get to the ticket booth, you can still walk away.

      I reserved on March 31, 2016, about an hour before the Model 3 was officially revealed. This time slot puts me ahead of most, but behind many others. There was a brief day or two in which you could discover your reservation number (mine was ~62000), which roughly correlates with your place in line, along with some other rules governing priority. This is what makes me doubt a Q1-2018 delivery for my car, since only a few hundred have been built so far.

      • 0 avatar
        ClutchCarGo

        If you walk away from the ticket counter without buying the Springsteen tickets I will have to smack you a good one.

        • 0 avatar
          SCE to AUX

          You wouldn’t believe what I am considering buying as an interim vehicle.

          • 0 avatar
            Nick_515

            SCE thanks for the response. Based on the info you provided, I find the article misleading.

            It presents all the people with a reservation as if they’re undergoing massive inconvenience, have been left carless, and have only their faith to rely on as they walk miles to take their children to school, buy groceries, etc, while praying the Lord Tesla will deliver soon.

            The reality sounds like they are simply tying a grand to the possibility that this particular car will materialize at a particular moment and still workout for them. That’s it, no more no less. Don’t get me wrong… I do not mean to dismiss a grand as chump change, nor to suggest that families can be careless with long term planning like a vehicle purchase. It just doesn’t add up to huge sacrifice.

            What ARE you considering in the meanwhile? I knew you had a Leaf.

  • avatar
    xander18

    “Bloomberg reached out to 20 Model 3 reservation holders this month, noting that not one had canceled their order.”

    WAIT. Am I the only one who sees the logical contradiction here? If they hold a reservation then clearly they haven’t canceler their order. I know a few EV-diehards who canceled Model 3 orders. I know an anecdote isn’t the singular of data but Bloomberg wouldn’t have found those people in their dataset.

  • avatar
    jkross22

    Wishful thinking is what drives Musk’s estimated availability dates of his cars as well as T stock price.

    The idea of under-promise and over-deliver isn’t on his radar.

    Add to that the cluster* that is Tesla the employer and you start to see the real picture behind the hype.

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