4 ms·

Well, they lost access to $1,000 until they cancel (plus 3-6 weeks, since it can allegedly take Tesla this long to refund the money). I don't think 400,000 hav

Well, they lost access to $1,000 until they cancel (plus 3-6 weeks, since it can allegedly take Tesla this long to refund the money). I don't think 400,000 have just $1,000 to spare for a really anything they will just cancel. The $1,000 mean that the person who reserved it really wanted the car and is unlikely to just refund it unless they have a very good reason to do so.

elihu 10y ago
The sort of people who would consider buying an expensive sedan can probably afford to loan Tesla $1000 for a year or so. I reserved a Model 3 because I figured that if I didn't, I would be at the end of a very long waiting list and would probably lose out on the federal rebate. The most likely outcome is that I'll decide that's too much to spend on a car and cancel, but it still made sense to me to keep my options open. I expect a lot of those reservations to be converted to actual sales, but a lot of them won't. In any case, I think Tesla will have plenty of demand if the product meets expectations.
- Matt3o12_ 10y ago
  Fair enough but there are many foreigners who do not have a tax credit and still made a reservation.
- manquer 10y ago
  You could always sell it immediately.. you would probably get even a slightly higher price than you paid by impatient people
slg 10y ago
I think the commitment of $1000 is overblown. What is the actual opportunity cost here? Maybe $50-$150 depending on the interest rate and time frame you want to use for your estimates. That is nothing in the scale of a car purchase and it buys you the right to receive the car several months quicker. Relatively speaking it is like someone paying $10 to have a new laptop shipped to them overnight instead of by ground except the shipping has been prepurchased a year before the laptop. If you aren't the type of person who can find a spare $1000, you also probably shouldn't be the type of person who spends $30,000 on a car.
- rco8786 10y ago
  I think you vastly underestimate how much demand is represented by 400,000 people willing to part with $1k before a product even exists. Refundable or not.
  - slg 10y ago
    I am not questioning the demand. I am questioning the commitment of people who put down a refundable deposit on a product they had very little information about. I am one of those people who threw down my $1000 before any of the presentations. I am still not sure whether I will purchase one. My interest has actually waned with recent leaks like the complete lack of any dashboard readouts. However I am still perfectly fine with Tesla keeping my deposit until I make a final decision. The opportunity costs of that extra $50-$150 is worth a lot less to me than the chance of securing a Tesla quickly if a do make the purchase (not to mention it increases my odds of a full federal tax rebate). I can't imagine I am the only one of the 400,000 with that mindset.
    - dtparr 10y ago
      You're not the only one. I'm nearly identical. Losing access to $1k for a year or two (with the ability to get it back within a few weeks) is completely a non-factor, and since it increases my chance of a $7500 rebate, seems like a pretty good investment, actually. Also, same feeling of 'meh' based on leaks so far. I was really hoping for a scaled down S with fewer amenities, lower performance, etc. rather than something from scratch. The no dashboard instrument cluster thing bugs me, as does the fact that AWD won't be available initially (hurting the chances of the rebate if I want AWD), but I'll wait until at least the final reveal if not later to make my decision.
- MarkMc 10y ago
  You are missing the psychological element. In general, people: (a) Feel a strong obligation to be consistent with past behaviour - not just in placing the deposit, but then thinking and reading about the new car design and wanting a Tesla for months or years. (b) Want to avoid admitting the 'mistake' of giving Tesla a free loan. Not just admitting the mistake to themselves, but also to all their friends they told about their deposit. (c) Hate giving up something they 'own' - ie. their place in the queue (d) Value something that's scarce more than something that's easily available (e) Are more likely to want something that other people love and are queueing up to buy.

elihu 10y ago

The sort of people who would consider buying an expensive sedan can probably afford to loan Tesla $1000 for a year or so. I reserved a Model 3 because I figured that if I didn't, I would be at the end of a very long waiting list and would probably lose out on the federal rebate. The most likely outcome is that I'll decide that's too much to spend on a car and cancel, but it still made sense to me to keep my options open. I expect a lot of those reservations to be converted to actual sales, but a lot of them won't. In any case, I think Tesla will have plenty of demand if the product meets expectations.

Matt3o12_ 10y ago
Fair enough but there are many foreigners who do not have a tax credit and still made a reservation.
manquer 10y ago
You could always sell it immediately.. you would probably get even a slightly higher price than you paid by impatient people

slg 10y ago

I think the commitment of $1000 is overblown. What is the actual opportunity cost here? Maybe $50-$150 depending on the interest rate and time frame you want to use for your estimates. That is nothing in the scale of a car purchase and it buys you the right to receive the car several months quicker. Relatively speaking it is like someone paying $10 to have a new laptop shipped to them overnight instead of by ground except the shipping has been prepurchased a year before the laptop. If you aren't the type of person who can find a spare $1000, you also probably shouldn't be the type of person who spends $30,000 on a car.

rco8786 10y ago
I think you vastly underestimate how much demand is represented by 400,000 people willing to part with $1k before a product even exists. Refundable or not.
- slg 10y ago
  I am not questioning the demand. I am questioning the commitment of people who put down a refundable deposit on a product they had very little information about. I am one of those people who threw down my $1000 before any of the presentations. I am still not sure whether I will purchase one. My interest has actually waned with recent leaks like the complete lack of any dashboard readouts. However I am still perfectly fine with Tesla keeping my deposit until I make a final decision. The opportunity costs of that extra $50-$150 is worth a lot less to me than the chance of securing a Tesla quickly if a do make the purchase (not to mention it increases my odds of a full federal tax rebate). I can't imagine I am the only one of the 400,000 with that mindset.
  - dtparr 10y ago
    You're not the only one. I'm nearly identical. Losing access to $1k for a year or two (with the ability to get it back within a few weeks) is completely a non-factor, and since it increases my chance of a $7500 rebate, seems like a pretty good investment, actually. Also, same feeling of 'meh' based on leaks so far. I was really hoping for a scaled down S with fewer amenities, lower performance, etc. rather than something from scratch. The no dashboard instrument cluster thing bugs me, as does the fact that AWD won't be available initially (hurting the chances of the rebate if I want AWD), but I'll wait until at least the final reveal if not later to make my decision.
MarkMc 10y ago
You are missing the psychological element. In general, people: (a) Feel a strong obligation to be consistent with past behaviour - not just in placing the deposit, but then thinking and reading about the new car design and wanting a Tesla for months or years. (b) Want to avoid admitting the 'mistake' of giving Tesla a free loan. Not just admitting the mistake to themselves, but also to all their friends they told about their deposit. (c) Hate giving up something they 'own' - ie. their place in the queue (d) Value something that's scarce more than something that's easily available (e) Are more likely to want something that other people love and are queueing up to buy.