Tesla Vice President says Model 3 reservations are ‘approaching 400,000’, real success will be delivery

model 3 wild

Tesla Vice-President of Business Development Diarmuid O’Connell was in Amsterdam yesterday for the AVERE E-mobility Conference. The long-time Tesla executive, and one of the company’s first 50 employees, gave a short presentation before doing a Q&A with the audience.

O’Connell shared a quick update on the increasing number of Model 3 reservations Tesla has been receiving since unveiling the vehicle last month. After a week, Tesla confirmed in a blog post having received 325,000 Model 3 reservations, another week later, O’Connell now says that “something approaching 400,000 people” have already reserved the vehicle.

The Vice President said that the public response gave the company confidence in investing in its production for the third generation vehicle, but in his opinion, there’s an even more important consequence of the number of reservations Tesla received:

“It delivers a message to the industry that there’s incredible demand for great electric vehicles out there.”

During the Q&A session, someone in the audience described the Model 3 unveiling as a “huge success” and followed up by asking how Tesla plans to deliver on all those pre-orders. O’Connell responded:

“It’s a success as far as it is right now. The real success will be delivering a great product at the volumes are possible and necessary.”

He then quoted CEO Elon Musk on his plans to increase production following the higher than expected number of reservations. He said that Tesla learned a lot from the Model S and now the Model X production ramp up. They will use this knowledge to get to higher volumes quicker.

O’Connell also said that Tesla plans to expand its lineup following the Model 3. He emphasized the Tesla pickup truck that’s been talked about before by CEO Elon Musk.

Here’s a video of O’Connell’s presentation filmed by Vincent Everts:

The executive also discussed a few other interesting subjects including ‘Tesla Energy’, vehicle-to-grid technology, Tesla’s competition, and more.

We’ve reached out to Tesla for clarification on the number and will report back anything notable.

https://www.youtube.com/watch?v=39qtqqqtwKE

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Comments

  1. Kalud - 7 years ago

    Just wanted to say at least once, Fred, Seth and Jon you are doing an incredible job !

  2. Nøderak - 7 years ago

    tell us when ti’s at .5 and 1 million

  3. Taylor Marks - 7 years ago

    Hm. I was estimating it was at 418K now, predicting it would hold steady at 12K/day over the last week. I guess they’re probably closer to 10K/day, which would put them at around 390K.

    Even so, demand is keeping up really strongly. If 10K/day is the baseline, they’ll be looking at around 5M preorders by the time they finally deliver the first cars. That’ll require 10 gigafactory-years just to fulfill all of the preorders. They’re going to need to build a lot more factories.

    5M preorders at $1000 each gives them around $5B in funding… enough to fully fund a second gigafactory, no loans needed, no need to touch the $1B they already have on hand.

    You know… Apple has $200B cash on hand… that’s enough to build 40 gigafactories. They’d be able to pump out 20M cars/year with that.

    • STK - 7 years ago

      They can’t touch the money – it’s considered a liability on their balance sheet as it’s refundable.

      • Fred Lambert - 7 years ago

        Any credit is a liability, it doesn’t mean they can’t use the money. That’s not how accounting works.

      • František Kubiš Jr. - 7 years ago

        any debt is liability. Do you want to say that if company borrows money it cant use them because it is liability? 😀

    • Dennis G - 7 years ago

      According to Elon 5% of people order 2 cars. So 400k people + 5% mathmagic = 420k cars

    • Nathanael - 7 years ago

      Actually, my math says at 10K/day they get to 6.9 million reservations by January 1, 2018. I don’t know when they’ll deliver the first Model 3, but 500K cars per year sure isn’t going to cut it… that’s 13 years of sales.

      Tesla needs to build (a) a European factory for the Euro market, (b) a Chinese factory for the Chinese market, (c) an East Coast US factory, (d) a Midwest US factory (or maybe Ontario), (e) an Australian factory, and then they’ll have the backlog down to a more reasonable number of years.

      I don’t know how they’re going to finance this level of expansion.

  4. Wayne C - 7 years ago

    I think Elon will cut off reservations at 500,000 or so. Making people wait too long (for 3 or 4 years?) would be counterproductive to positive brand image.

    • Taylor Marks - 7 years ago

      I don’t know that it would be fair to simply cut off reservations without warning… what about the people on the fence right now? Maybe being told that reservations are going to be halted within a week will be enough warning to be fair to them?

      Cutting off reservations in general doesn’t seem like a good idea. Come up with a way of producing more cars faster. I would think that with this kind of preorder data, they should be able to secure loans to start construction on another 3 Gigafactories right now. By 2020, they can be pumping out 2M Model 3s per year.

      • OverClokx - 7 years ago

        There’s no way they’ll get to the point of producing that many cars a year (2m) anytime soon, especially not within 4 years time.

        The bottleneck in production is the batteries, hence the need for the Gigafactory to reach their goal of 500k cars a year. Even if Tesla does manage to get it 100% operational and can hit the goal of 500k cars yearly, it’d still require an additional 2 Gigafactories minimum to hit the requirement of 2million cars a year. That’s also not including additional factories (similar to Fremont) that will need to be spun up to hit those goals. That spin up will take a long time, as they need to source the manufacturing hardware, location, and the employees.

        Cutting off reservations will probably not happen. Yes, there’s going to be delays in fulfilling 500k orders so far, but once production is maxed (figure mid-2018) with 500k cars a year, there will still be a backlog of cars when production peaks. The other thing Tesla needs to accomplish is maintaining a demand, even when manufacturing is high at 500k+ cars a year, so they can maintain their profit goals.

      • 500k per year will be only reachable some time (say a year) after the Gigafactory is at full planned production scale. And that is only planned for 2020. The first Model 3 might be made in 2018. It would be crazy optimistic to expect more than 10k Model 3 produced in 2018 as they need to iron out the kinks first before accelerating to breakneck speed of production. They plan to fulfill the orders of people close to the factory first in order to simplify inevitable recalls and repairs of the first vehicles. I would be that 2019 will see between 100k and 200k Model 3 produced and 2020 might see as many as 300k produced if there are no production problems. And only by 2021 we might expect to hit 500k vehicles produced, with 400k being Model 3 vehicles. Optimistically speaking.

    • Joseph Rust - 7 years ago

      Why would you cut off $1K loans, i mean deposits? That’s almost $400 million in cash advances with no stock dilution

  5. walt - 7 years ago

    Tesla truck and Vehicle to Grid are going to piss of a lot of people.

  6. Illuminati - 7 years ago

    Tesla will have difficulty producing enough Model 3 to meet the demand.
    It will be unmanageable when they will unveil the Y Model next year.

    There are about 70% of unoccupied space at the Fremont plant, which is just sufficient to install three assembly lines. It will perhaps suffice to produce the Model 3, but where the Y Model will be produced?

    The Gigafactory will never produce enough batteries.
    And the lithium, it will come from where?
    Whabouchi, Canada? (2nd largest and richest global lithium reserve)

  7. Bubba2000 - 7 years ago

    Economics 101. With huge demand for Model 3, the effective price will go up. Tesla will have versions of M3 with larger batteries good for 300-400 real miles, AWD, hi performance motors with 500+ HP, Ludicrous Mode, Autopilot, Supercharger usage plan, Air Suspension, Luxury Options, hi end sound systems, etc. These cars could sell all the way to $60-70k and get priority. The base M3 may sell for $35k but will be a stripped version that will have low demand. Many will opt for the hi end version, just like for MS.

    Tesla could make 30+% profit margins or more! Enough to finance scaling of manufacturing and battery production from GF or even from Panasonic, LG. The SCs will become profit centers and finance expansion.

  8. I hope they can empty the Model 3 waiting list before embarking in “Model Y” adventures…

  9. guythall - 7 years ago

    Interesting that Bob Lutz has been quiet.

  10. Nathanael - 7 years ago

    Oh HELL yeah the pickup.

    I hope the pickup is the next Tesla after the Model 3. From a market perspective, it’s the right move. All the other car companies are now trying to make serious electric sedans/hatchbacks/station wagons, which will come out in late 2018, 2019 or 2020. Not one of them has an electric pickup planned.

    If Tesla comes out with an electric pickup and ships it in 2020, they will all be blindsided again and Tesla will eat up another huge chunk of marketshare.

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