In a rare move, Tesla CEO Elon Musk has revealed the automaker’s new order breakdown from last week in order to dispel the notion that demand for the Model 3 is flattening.
Musk says that Tesla received over 7,000 new orders: over 2,000 for Model S and Model X, and 5,000 for Model 3.
The move comes after top Wall Street analyst Rajvindra Gill at Needham issued a new note to clients today in which he claimed that Tesla is getting more Model 3 cancellations than new orders:
“Based on our checks, refunds are outpacing deposits as cancellations accelerate. The reasons are varied: extended wait times, the expiration of the $7,500 credit, and unavailability of the $35k base model.”
In our article about the note, we questioned the claim due to several other inaccuracies in Gill’s report and later Tesla also issued a statement denying that cancellations for the Model 3 are outpacing new orders.
But now Musk is adding to the debate by confirming the new order rate of last week – something that Tesla generally never reveals:
Dunno where this bs is coming from. Who knows about the future, but last week we had over 2000 S/X and 5000 Model 3 *new* net orders.
— Elon Musk (@elonmusk) July 20, 2018
The company generally releases delivery and production numbers at the end of each quarter and it will give some color on the order rate in comparison to the same period during the previous year, but not much more than that.
Some notes on the numbers: 2,000 orders for Model S and Model X vehicles in a week is what Tesla is trying to average globally, which is good.
As for “5,000 Model 3 new net orders”, the “net” indicates that it is after cancellations, which undoes Gill’s point, but it is also important to note that it comes after Tesla opened the design studio to everyone in North America and stopped the reservation process in the market.
Therefore, those new orders are likely only for North America. Tesla could also still be growing its backlog of reservations internationally.
What is most impressive is that 5,000 new orders for Model 3 last week come several weeks after Tesla invited all reservation holders to order in North America.
At that point, I believe Tesla received a very large batch of orders, likely much larger than 5,000, especially from those waiting for the two all-wheel-drive versions.
Until last month, I was a bit skeptical of Tesla maintaining the rate of orders to match its latest production achievements, but I now think that it won’t be an issue for a few months and at that point, Tesla will open orders for the base $35,000 version and start to expand to international markets, which will create a brand new wave of orders.
In other words, I think demand is the last thing people should have to worry about when it comes to Tesla and the Model 3.
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