Once again, Tesla’s management refused to update the number of Model 3 reservations yesterday during a conference call with analysts following the disclosure of Tesla’s third quarter financial results. CEO Elon Musk said that “this is not something we comment on and not something that is a figure of merit in any way.”
He added that Tesla is still seeing “very strong” demand for the Model 3. If you look at Tesla’s updated financial for the third quarter, it looks like Model 3 reservations are still growing at a healthy rate despite Tesla ‘anti-selling’ the car, as Musk said.
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As of September 30, Tesla is now holding $690 million in customer deposits – up by $10 million from the last quarter.
The $10 million increased over the quarter might not seem like a lot, but that’s because while Model 3 reservations are adding to the number, Model X deposits are also decreasing the number. Tesla was holding over $200 million in Model X deposits when it started delivering the vehicle and during the third quarter, it delivered a record number of Model X: 8,774 units.
A lot of those were delivered to people who had deposits ranging from $5,000 to $40,000 on the vehicle.
Tesla is now delivering the Model X in almost every market where it was taking deposits and therefore, by the end of the quarter, it should work through its backlog. Especially if it can deliver the 5-seat configuration.
It’s safe to assume that the majority of the $690 million in customer deposits is from Model 3 reservations with a small percentage being for the few Model X reservations that haven’t turned into an order yet, especially in Europe and China, and an another small percentage for deposits as part of Tesla’s regular custom orders.
In August, we reported that cash flow from customer deposits indicated that Tesla was around 400,000 reservations for the Model 3 at the end of June, but now it looks like Tesla is inching closer to 500,000 as of the end of September.
The last officially disclosed number was 373,000 reservations back in May.
Yesterday, Musk reiterated that the first 12 months of Tesla Model 3 production are ‘sold out’ and that it’s not worth it for Tesla to push for more reservation:
“[…] When somebody comes into our store to buy a Model 3, we say well why don’t you buy a Model S or an X instead? So we anti-sell the 3. Still a lot of people ordered the 3, but whatever. Plus the 3, we’re basically sold out the first year of production. So a good 12 months of production or thereabouts. So what’s the point of trying to sell the 13th month of production? Very little to be had there in doing so.”
Yet, we are still at least 8 months away from production and it wouldn’t be too surprising if Tesla adds a few sold out months of production by then.
Additionally, Tesla gave a quick update on the progress of the Model 3 yesterday. The company said that production line layout is completed and that they are now testing subsystems for the vehicle.