Tesla has an incredible amount of Model 3 reservations, but the delays and unavailability of the less expensive version of the vehicle have resulted in some cancellations.
A report is now attempting to quantify the number of cancellation and claims that as many as 23% of Model 3 reservations were refunded by Tesla, but people are still reserving the Model 3 at a high pace.
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The report comes via Second Measure, which analyzes billions of anonymized purchases from credit and debit cards.
The biggest takeaway from their report is that about “23 percent of deposits have been refunded”:
“The Model 3 faced a series of production delays, and not all depositors have stuck out the wait. Since reservations began, 23 percent of deposits have been refunded. Only Tesla knows how many additional customers have cancelled reservations and are still awaiting refunds.”
It also shows that the overall demand is still quite strong despite the aforementioned delays:
Second Measure claims that their “analysis aligns with Tesla’s reported figures”:
“Deposits started off strong. On March 31, 2016, eager early adopters drove a surge of initial deposits, and 61 percent of all Model 3 reservations occured in the first month. In August 2017, Tesla disclosed the gross and net Model 3 reservations, revealing a refund rate of 12 percent. Our analysis aligns with Tesla’s reported figures, also finding that 12 percent of deposits had been refunded at that time.”
Tesla denies that it lines up with their own data, but the company admitted that there were some cancellations.
They wrote in their production report earlier this year:
“Net Model 3 reservations remained stable through Q1. The reasons for order cancellation are almost entirely due to delays in production in general and delays in availability of certain planned options, particularly dual motor AWD and the smaller battery pack. As described above, owner happiness with the product is extremely high.”
In their shareholders letter last month, they also confirmed that they still had over 450,000 Model 3 reservations at the end of last quarter:
“Model 3 net reservations, including configured orders that had not yet been delivered, continued to exceed 450,000 at the end of Q1 even though fewer than 20 stores worldwide had Model 3 on display. We are planning to deploy significantly more Model 3 vehicles in our stores in Q2 this year.”
At the end of last quarter, Tesla was holding almost $1 billion in customer deposits, which also includes deposits for Tesla Semi, the next-gen Roadster, Model S and Model X, but Model 3 deposits account for the biggest piece of the pie.
No matter how you look at the data, the main takeaway is still that the demand for the Model 3 is absolutely insane.
At the planned production rate at the end of the current quarter, it would still take Tesla over a year to work through the backlog even if Second Measure’s cancellation rate is correct, which Tesla claims it is not.
Like Tesla said, that’s also without an important display fleet. I also think that demand is going to increase with deliveries as more people are going to see the vehicle on the road and in the hands of their friends and family. The Tesla community is known for being ambassadors.
I think automakers should look at this and start accelerating their EV programs in a big way.
There are plenty of opportunities to get a piece of that demand in the mid and long-term and there are a few programs coming, but I think they need to revise their volume and timelines.
What do you think? Let us know in the comments below.