Tesla confirms ‘increasing its production plans to minimize the wait for Model 3’

model 3 unveil 1

In an email sent out last night (see below), Tesla confirmed that following the overwhelming number of Model 3 reservations it received, the company is currently “increasing its production plans to minimize the wait for Model 3” – something Elon Musk hinted Tesla was looking into after witnessing the long lines of people waiting at Tesla’s stores to reserve the $35,000 long-range all-electric vehicle.

The automaker added that it set the record for “the highest single-day sales of any product of any kind ever in world history” after receiving over 180,000 Model 3 reservations in the first 24 hours.

Update: Tesla is claiming this achievement based on what it calls “implied future sales” – with now 325,000 reservations with an estimated average sale price of $42,000 after options and by assuming that everyone who placed a deposit will convert it to an order, which adds up to $13.6 billion. For the first 24 hours: 180,000 x $42,000 = $7.5 billion./

Tesla CEO Elon Musk updated the number of reservations throughout the weekend to 276,000 as of Saturday and he said that he would update the number again this morning for the first week since the unveil. We will update our timeline of Model 3 reservations once the new number becomes available.

Here’s the email in question:model 3 email blast

Elon Musk confirmed being surprised by the number of reservations and that he was only expecting half as many or even just one-fourth.

The production ramp up will be particularly important for Tesla’s customers in the US. Once 200,000 people have benefited from the $7,500 tax credit for EVs from one manufacturer, the rebate starts to phase out over a 12-month period, but the restriction changes from an amount (200,000 units) to sales over a period of time (12 months) – meaning that it is in Tesla’s and its customers’ best interest for the Model 3 to be at volume production once Tesla hit the 200,000 cap, which the automaker is expected to hit in 2018.

For example, if Tesla is only able to deliver 10,000 Model 3 in the US before reaching its 200,000 units cap, but Model 3 production is at ~3,000 units per week at that point, then Tesla could focus its sales in the US for a period of time and tens of thousands would still be able to get access to the full tax credit and many more to the partial tax credit.

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Comments

  1. Tom - 7 years ago

    “The automaker added that it set the record for “the highest single-day sales of any product of any kind ever in world history” after receiving over 180,000 Model 3 reservations in the first 24 hours.”

    How can that be true? Video games regularly sell millions of copies in the first day…

    • Might be related to amount instead of number of items. 1 000 USD x 180 000 is quite a bit. Or it might be related to sale of a physical item? Video games are usually digital copies mostly these days.

    • Nick - 7 years ago

      Ya I question this as well, pretty sure Apple has beat this one day record pretty easily in the past. They should have said most auto sales in a day ever (if that’s true of course)

      • Richard - 7 years ago

        they probably measure it in contract value. 180k reservations for car with price tag ~42k (not everyone will buy base model with no options) is $7,5 bil. of preorder value. Apple sells ~10 mil iPhones in launch weekend ~$750 a piece, which means Tesla does in one day something Apple needs weekend for. Although, to be fair, it is drastic difference between “people showed interest and put a refundable deposit for goods worth $7,5bil in one day” vs “people bought and we delivered $7,5 worth of goods over weekend”

    • QC - 7 years ago

      Guess it refers to the total pre-order bookings in $

      • Nathanael - 7 years ago

        I’m sure that’s what it refers to, and it’s not true, of course. He’s beat the big aircraft and railway company contracts (which are regularly in the $1-4 billion range)….

        …. but there have been *single contracts* for over $10 billion a pop from governments to build various large things (military stuff, road construction, railway construction). So by dollar value the product with biggest “single day sales” ever was probably some military base or expressway interchange.

    • Haggy - 7 years ago

      Businesses measure sales in terms of revenue. And by product, I assume his definition is what you might expect, rather than sale of real estate or companies.

      Technically, there have been no sales yet. I suspect that many other records were broken, such as the number of deposits put down for a car, or the number of people who lined up an an auto showroom.

  2. Lee - 7 years ago

    To whom was this email sent? People who registered with Tesla for more information on the Model 3 but didn’t place a reservation?

  3. K. B. Cummings - 7 years ago

    Duhh and a slap along aside my head. I should have seen it. I was bothered when I thought unfair that the first people reserving a Model 3 (Australian) would not be first to get one. Unfair that it was American first, spreading out from the factory. Tesla saw delivering cars overseas first would deprive many US people from getting the tax rebate.

    • Stuart - 7 years ago

      Not so.

      The US tax credit is for the first 200,000 all-electric vehicles delivered to US customers by a single manufacturer. If Tesla decided to ship vehicles to Australia (as in fact they have done – the Model S is available and has been selling in Australia for a while now), those numbers do NOT count towards the limit.

      Tesla wants to deliver the first Model 3s close to the factory so they can recall them and fix them relatively cheaply if/when issues arise. They’ll start spreading out from there. They _might_ decide to stop sales just shy of the 200,000 mark if they haven’t reached full volume production at that point, finish ramping up production, and then focus on the American market to maximise the tax credit, but they’ll still stick to that general plan.

      Unfortunately, left-hand-drive countries like Australia are the smaller market. It makes sense for Tesla to ramp up production of the right-hand-drive models, fill that demand, and then get the left-hand-drive models shipped out. Annoying for those of us in Australia, the UK, and other countries that drive on the left side of the road, but that’s the way it goes. Look on the bright side: at least by the time the car reaches us, most of the early kinks should be ironed out.

  4. Michael Atkinson - 7 years ago

    There are many products that have had bigger orders in a single day e.g. $26.6 B order from IndiGofor 250 airbus A320neo

    Tesla probably holds the record for consumer products, though.

    • jayydeee - 7 years ago

      no its not phones and video games often sell in the millions per day so the model 3 is not number for quantity or number for dollar value

  5. o.lafaye - 7 years ago

    “Orders in one day”

    My My, what scintillating conversations…

  6. Gene Grossman - 7 years ago

    I bought Tesla stock when it was on sale for less than $160 a share – and see that it was a good move (thank you, Mr. Musk).
    Now I’m buying penny stocks in a half-dozen companies that are developing evaporating brine ponds to produce lithium in Nevada – the place where I believed that Musk would locate his plant while he was dangling the location before several other states, to get the benefit-bidding amount high enough and make Nevada’s offer raise theirs up, to stay in the game.

    Musk decided to build his big plant in Nevada, using the same reasoning of famous bank-robber Willie Sutton, who when asked why he robbed banks, replied “because that’s where the money is” and Nevada is where the lithium is in this country… and Musk knows it too: I’ll be watching for him to be buying out one or more the lithium companies in Nevada (hopefully the ones I’m in), just to play safe and try to maximize Tesla’s dependence on others.

    And that’s why I believe the motto of this decade is now “It’s the lithium, stupid.”

    Gene Grossman – http://www.LegalMystery.com

    • Nathanael - 7 years ago

      Watch out, there are more than half a dozen different lithium companies. You may have the wrong ones>

      There’s also cobalt and graphite miners if you like speculating on Tesla’s minerals supply.

  7. Ali Gulen - 7 years ago

    Good cor bu good price as well

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