23 ms·

Tesla Faces Accelerating Rate of Model 3 Refunds

221 points by artsandsci 8y ago

josefresco 8y ago
Data is based on a report by Second Measure: https://secondmeasure.com https://secondmeasure.com Y Combinator is listed on their website as a ... customer?
- venning 8y ago
  A quick Googling says they are Summer class of 2015.
jerrysievert 8y ago
while I'm not too surprised that people want refunds on deposits as schedules for luxury goods slip, I feel that the article might have been a little more substance had they included information about percentages of deposit refunds among other verticals, and how those are affected by delays. otherwise, this article feels rather flat.
- rsynnott 8y ago
  Are there really many comparables? I can’t really think of many scenarios where a normal consumer pays a four figure deposit on something which doesn’t have a release date.
gregoriol 8y ago
I don't know about 25%, I've read 12% somewhere, but I'm thinking about it. I was not one of the first to pre-order and I'm not in the US, which makes the waiting time.. extra long. I'm wondering if by then (something like mid-2019 I guess) it won't be easier to get a "used" one, or even a used model S. I also don't like the opaque pricing: pretty sure with the options I'd like it'll cost no less than 50k€, which is far from the announced low cost. I still like the idea to get a model 3 though, and there is no good alternative as of today.
- venning 8y ago
  > I've read 12% somewhere In the article. Musk stated 12% last August.
api 8y ago
I have a new personal hypothesis on Elon and his companies. Elon's companies are not necessarily better run than other companies, and in some cases are worse run. Their success and Elon's cult status as an innovator is a result not of above-average managerial competence but of a willingness to unilaterally defy the Nash equilibria of industries. Automobiles, space flight, and energy are industries that have been stagnant for some time. Stagnation of an industry means that it's found some kind of Nash equilibrium where it's not really in anyone's short term best interest to innovate much or otherwise deviate from the norm. Elon doesn't give a rat's you-know-what and innovates anyway. Game theoretically he defects. This results in companies that are loss-making in the short term, but if successful they will define a new Nash equilibrium where they are positioned to lead or at least to have carved out a significant chunk. Another way of putting this is that Elon is willing to try to cross fitness valleys between local maxima. It's a gamble of course: can you reach the next fitness peak / equilibrium point before you run out of cash? This is very hard, and is why Nash equilibria / fitness local maxima are so stubborn.
- s2g 8y ago
  It's also an indicator of the massive amount of energy put into marketing Elon.
  - rich-and-poor 8y ago
    Haha... The only marketing Elon has is word of mouth and the press interviewing him.
- arijun 8y ago
  But the fact that he's done it twice with SpaceX and at least once with Tesla seems to indicate he's better average at running those races.
  - api 8y ago
    Perhaps I wasn't nuanced enough. I think Elon is better than average at the art of defying Nash equilibria -- both in the raising of funds to "disrupt" industries and in the execution of disruption. This is not necessarily the same skill as boring old "ops."
venning 8y ago
Mods, can you change this to the original source article? https://blog.secondmeasure.com/2018/06/04/tesla-faces-accelerating-rate-of-model-3-refunds/ https://blog.secondmeasure.com/2018/06/04/tesla-faces-accele...
- sctb 8y ago
  Thanks! We've updated the link from https://boingboing.net/2018/06/04/report-almost-25-of-tesla-mo.html https://boingboing.net/2018/06/04/report-almost-25-of-tesla-..., which points to Engadget, which points to this.
Buetol 8y ago
As somebody who got refunded: As much as I want to support Elon, I later realized the full total cost of the car (having a garage, doing the maintenance,..) wasn’t in my budget and that it’s simply better to invest in a lifestyle where I just don’t need a car. Interrestingly, I had the same conclusion about buying an house versus renting a appartment.
- p0rky 8y ago
  So you decided to not have a house or apartment?
  - walrus01 8y ago
    If you live in an older condo building with an uncooperative board, and physical challenges/long distances related to surface mounted conduit routing in the underground parking garage, it could be $8,000 of licensed electrician work to run a new 240VAC circuit to your single parking spot. edit: there are also a number of people who have street parking only. Look at any older neighborhood, it could range from Queen Anne hill in Seattle, to many parts of Boston. Houses may have neither garages nor alleyways.
    - yuhong 8y ago
      One of the things they did with the Model 3 was to improve the efficiency of 120V charging, partly for that reason. Trivia: In Canada, the CEC since 2012 requires a NEMA 5-20 outlet for EV charging at a minimum, and with the Model 3 6-7 miles per hour with it is not uncommon.
      - walrus01 8y ago
        It's still not going to be able to pull anything more than about 1700W from a 120V 15A circuit. Maybe slightly more efficient but the bottleneck is the amperage capacity of the circuit. Think of 120V charging as exactly like a hair dryer.
        8y ago
nck4222 8y ago
It was a win-win either way for Tesla. Worst case scenario for them, they got an interest free loan. They could've just put that money in a savings account and made free money off the 1% interest.
- jonknee 8y ago
  It's not a win win to lose potential customers because you could have made a few bucks in interest in the process.
  - nck4222 8y ago
    I'm sure there was an expectation that some percentage of pre orders would refund. I don't think the fact that 23% we're refunded should be used to say Tesla lost customers, considering they're still plus several hundred thousand pre orders. At the end of the day Tesla was able to guage demand, get hundreds of thousands of orders placed (even with the refunds) and get millions of dollars to use for investment/production. Yeah ideally for Tesla no one would all for a refund, but I'm sure they expected some and this still seems like a big win for Tesla.
    - jonknee 8y ago
      A big win for Tesla would be if they were able to produce the car at the pricing and timing they said they were going to. Right now it's at least 50% more expensive and way behind schedule, there is no way to call it a "big win". I bet taking deposits for a car that they have no intention of actually selling for years is a good way to turn a lot of potential customers off.
      - nck4222 8y ago
        If that were true there would be way more than 25% refunded. I honestly expected it to be more, even if they had met their production schedule.
- urda 8y ago
  Trading long-term customer trust for a short-term cash infusion is not a winning play.
bald 8y ago
At least in the Tesla fan community, a number of people got tired of waiting and bought a Model S/X instead. It remains unclear how many upgraded and as a result of this fell off the reservation list. They should have asked that as well.
- twblalock 8y ago
  It would be interesting to see how many of the waitlist cancellers bought electric cars from other brands. The Bolt, the Leaf, and the BMW i3 are the obvious alternatives.
  - addflip 8y ago
    Anecdata. I cancelled my reservation last month after it came apparent that it would be a while before they start manufacturing base model [1]. Ended up getting the BMW i3 and love it. After incentives it came out $217/month to lease[2]. 1. https://electrek.co/2018/05/21/tesla-ceo-elon-musk-ties-base-model-3-availability-to-company-profitability/ https://electrek.co/2018/05/21/tesla-ceo-elon-musk-ties-base... 2. leasehackr.com/calculator?make=BMW&msrp=47245&sales_price=42450&months=30&mf=.00166&dp=0&doc_fee=80&acq_fee=925&taxed_inc=9500&untaxed_inc=0&rebate=3866&resP=61&reg_fee=400&sales_tax=9.5&memo=&zero_driveoff=true&monthlyTax_radio=true&miles=10000&msd=0
    - stickydink 8y ago
      I've never seen leasehackr before, it seems really interesting. Did you use the site just for the calculator?
      - addflip 8y ago
        Mainly use it for the forums so I could compare other deals in my area. The calculator is just an ancillary benefit.
    - rconti 8y ago
      You can actually get an i3 for perilously close to $20k these days, at least in the Bay Area. PGE+BMW are offering $10k back to buyers, plus $7500 federal tax credit, plus $2500 CA tax credit. I was a model 3 reservation holder, and strongly considered the i3, but ultimately configured a Model 3 a couple of weeks ago (now pushed to July delivery as they're stalling to not hit 200k units before Q3).
ansible 8y ago
It is interesting that at the same time, sales of the Chevy Bolt aren't doing too good. This despite that at least a few reviews I've seen indicate it is a decent EV with decent range. https://www.fool.com/investing/2018/04/05/ev-sales-table.aspx https://www.fool.com/investing/2018/04/05/ev-sales-table.asp...
- Element_ 8y ago
  I believe there is internal resistance to the Bolt. There have been reports of dealerships being reluctant to sell them. I remember reading an article mentioning it was hard for potential buyers to actually find a Bolt to test drive at a dealership even though GM had plenty of inventory. I believe there are also supply problems in hot markets. The Bolt is currently sold out with waiting list in Canada, I believe it takes months to get one there. http://driving.ca/chevrolet/bolt/auto-news/news/the-chevrolet-bolt-is-a-great-car-so-why-cant-you-buy-one-in-canada http://driving.ca/chevrolet/bolt/auto-news/news/the-chevrole...
  - marvin 8y ago
    I'm calling it now: This will be how EV adoption looks for the next five years. Partly the dealers won't cooperate, and partly the manufacturers won't be able/willing to produce enough vehicles (depending on the market in question). Multiple manufacturers have sold out the entire 2018 production, in some cases before deliveries have even started.
    - kalleboo 8y ago
      What's the reason that dealers won't cooperate? Fears that repairs will be lower?
      - erikpukinskis 8y ago
        That and selling the EVs means making sales pitches that make their other inventory look bad.
  - 8y ago
fnordfnordfnord 8y ago
This pertains to the people who plunked down a thousand bucks to get in line for one. This is an interesting tidbit, but also a non-story.
callumprentice 8y ago
I ordered two (for me and my wife) the second online ordering opened via my phone at a restaurant as it happens which was novel since we were having a meal with out-of-town friends at the time. We were both very immensely excited but when it became clear that the first release wasn't going to be the inexpensive model we decided to cancel and get a refund. AFAICT, it's still not clear when that model will be available so I think we made the right choice.
- gist 8y ago
  > which was novel since we were having a meal with out-of-town friends at the time. We were both very immensely excited Behaviorally I am wondering to what extent the fact that you were having a good time with friends (and potentially drinking alcohol and/or at least enjoying your food) played a role in what appears to be an impulse purchase? I say this knowing from way back how there are high end stores that give you food and alcohol while shopping (I have experienced that) and the idea tends to be to get you to purchase more than you would as a result of the heightened mood. Curious on your take on this and playing a role?
  - callumprentice 8y ago
    Great question and I know what you mean but honestly, I think very little. We'd been planning to order them for some time, following the news stories etc. and were going to order them at home on a desktop machine but our friends arrived from out of town, wanted to go out and eat dinner so we needed an alternative plan. We didn't want to miss out so I tried using the phone almost as soon as we sat down and was pleasantly surprised by how painless the whole experience was, even on an older phone. Made for some good subsequent dinner time conversation though :)
ckastner 8y ago
Yet another quarter has almost passed and, according to the Bloomberg estimate [1], Tesla will yet again miss their goal of producing 5.000 cars a week -- by far. In the most recent week, it was about half that, 2.560. I guess some some people are just fed up with waiting. [1] https://www.bloomberg.com/graphics/2018-tesla-tracker/ https://www.bloomberg.com/graphics/2018-tesla-tracker/
- danhak 8y ago
  For some perspective, the Model 3 is already outselling the Chevy Bolt by a factor of > 5x, and has already set the record for greatest monthly deliveries EVER for a plug-in car in the U.S. https://insideevs.com/monthly-plug-in-sales-scorecard/ https://insideevs.com/monthly-plug-in-sales-scorecard/
  - ams6110 8y ago
    The Bolt is hideously ugly.
    - stcredzero 8y ago
      No. The Aztek is hideously ugly. The Bolt is nowhere near that ugly. Also, plenty of people don't care if something is ugly, if it's utilitarian. https://www.youtube.com/watch?v=33AP0JnXSOA https://www.youtube.com/watch?v=33AP0JnXSOA
      - paganel 8y ago
        A link to a Doug DeMuro video on HN, that's nice! Back on topic, I think the Bolt looks cool, I think it has an utilitarian and slightly ahead-of-its-time feeling about it which is just cool (the same as Renault Espace and especially Renault Avantime had back in the late '80s - the '90s, when everyone was hating on them, but now they're cool).
        stcredzero 8y ago
Liuser 8y ago
Been thinking of cancelling my reservation as well. My need for a car has dramatically decreased in the last couple of years with the ubiquity of ride sharing services. Now with last mile services spreading more and more (scooters/bike shares) I'm thinking this trend will only increase. I take the bus and bike to work. Small groceries are also done by bicycle. Whenever I go out to eat with my wife we use a ride sharing service because we enjoy a drink or two with our meals.
- Zhenya 8y ago
  If you plan on having children and live anywhere in the US (including SF, excluding Manhattan), you'll most likely need a car for Drs visits etc.
  - nervousvarun 8y ago
    Why would Uber not work for this? Not necessarily disputing you, just wanted some clarification on why you think that. Anecdotally I know several carless couples with children ostensibly making it work for "unplanned" auto trips via Uber. They live close enough to walk for "planned" trips like grocery store/work etc. Obviously you'd need to live close to those things but that was a major factor in their choice of home (location).
    - ben1040 8y ago
      When the kids are small, where do you find an Uber with one or more suitable car seats? It seems there's spotty availability in a few cities, but the standard from Uber is you get a single car seat appropriate for a child >12 months old. Or do you supply your own, and then drag the seat(s) around with you at your destination?
      - kalleboo 8y ago
        That's an interesting point. At least in the parts of Europe I'm familiar with, Taxis have an exemption for car seat laws. Ubers don't.
yumraj 8y ago
I can totally relate, while we need a car upgrade right now/soon and I can currently configure and order a Model 3, I'm waiting for the 35K version as I just don't see a need for the current longer range model. But at the same time there is no real alternate if I want an EV so I'm waiting. Worst thing is that the federal credit may expire by the time I can order the 35K version. If my current car, a Prius, that needs to be updated dies, my 2 options are Prius Prime or the Honda Clarity Plug-in.
- markab21 8y ago
  I visited a friend, and he showed me his goofy car, a Chevrolet Volt. This person is someone I'd met at a flying safety conference (I'm a pilot/aircraft owner) as was he and we became friends. He'd made his money in the 80's/90's selling his software company which produced accounting software and retired. I was astonished to hear he'd sold his Lexus for this car. After driving it a few times, I became a bit intrigued. It was goofy, but one of the smoothest power-delivery I'd experienced in a car (I've never driven an electric) and the feel of the car felt good. It's not a luxury car but didn't seem to be lacking much. Long story short, three months later I had traded in my Porsche Macan SUV for a Chevy Volt, the 65-mile range gets me 99% of the time where I need to go, and I've loved not having to stop at gas stations, almost ever. I would have bought the Bolt if I'd been able to get one, but this was late 2016, and they just weren't available. Looking back, for what I paid for the car, what I'm spending on the car for fuel (electricity) and relative maintenance (almost none), this has probably been the best car I've ever owned. I went from considering purchasing a Tesla to now not even being interested because I have everything I need out of a car and am somehow at that rare place of being happy with the relatively modest vehicle. To anyone considering a Volt, do not discount what a value this car is in the market if you have an effective way to charge the thing and it matches your commute cycle. I'll never be able to see petrol cars the same again. (I got a dealer demo with 500 miles for $30k and was able to get a $7500 tax credit), costing $22.5k for a new car. LOVE the vehicle and went from never owning a Chevrolet or American vehicle to now absolutely loving the car even though some people might find the car unattractive. Buy what you like, but what works for you. There are excellent options out there now on the electric market, the problem for some is one of the most practical options is a Chevrolet.
0x4f3759df 8y ago
Is it unwise to buy the first version of car? Seems like you wouldn't want to buy something until they get the kinks out, maybe a few years after production.
TekMol 8y ago
What are the key features of a Tesla Model 3 that make people wait several years for their car instead of just going to a car dealership and buying what is available right now?
- ryanhuff 8y ago
  Here are a few: 1. Dealerships (experience) suck 2. Gas (petrol) sucks 3. Limited range sucks 4. Good performance is a plus
- freerobby 8y ago
  1. Convenience of all electric (start every day w/ "full tank", no oil changes or other regular maintenance) 2a. Social mission of the company/product 2b. Carbon footprint per mile driven gets better with age of car, rather than worse like with an ICE. 3. Autopilot 4. FSD hardware ready (even if you don't believe this, it's an advertised feature and may motivate some buyers) 5. No dealing with car salespeople
  - TekMol 8y ago
    So electric+autopilot+online. Are there no other electric cars available? Are they not online? Do they have no autopilot?
    - freerobby 8y ago
      The Bolt fits the EV bill if you just need a commuter car. If you want to be able to take a road trip, Tesla is the only serious option. No manufacturer offers anything remotely competitive with Autopilot. Hopefully both of these things change very soon.
      - stephengillie 8y ago
        > No manufacturer offers anything remotely competitive with Autopilot. This is for the better, given the number of collisions occurring with Autopilot engaged or recently engaged. It's too bad the Adaptive Cruise and Autonomous Braking can't be enabled without the Lane Assist. Adaptive Cruise in a Camry Hybrid is a serious benefit and a life-changing amenity. I'm no longer willing to drive cars that don't have Adaptive Cruise.
johnvega 8y ago
I plan to buy Model 3 in about 2 years or so, so this is great news!
RyanShook 8y ago
A couple months ago I got an email saying my Model 3 was ready to be configured. Chose all the base options and saved the order. When I came back the next day the page said I was still on the waiting list as if nothing had been configured... still have my reservation but think a 35k Model 3 may never actually exist.
- Talyen42 8y ago
  Can't help but think this is on purpose. Elon straight up said they can't sell mostly base models right now and survive, they need premium configs to stay afloat.
  - rich-and-poor 8y ago
    Tesla does not need to sell premium configs to "stay afloat". They are selling premium configs so that their margins are not so brutally low, so that they don't get roasted for that as well. Honestly, Tesla can not win: Sell low margin base models, have a terrible quarter and get roasted. Sell high margin, high trim models and get roasted for high priced cars. They can not win.
    - RyanShook 8y ago
      I agreee that they are bound to upset either investors or consumers but Elon often promises the moon for both and I think that is what gets him in trouble most often. Would there be record reservations if the Model 3 was advertised as 50k base?
      - rich-and-poor 8y ago
        No but then they would be lying because base is 35k.
    - jpatokal 8y ago
      When your capacity is limited, selling higher-end models with higher margin is the completely obvious choice to maximize revenue and profit. "Have a terrible quarter" is far worse than "get roasted" by random people on HN.
abalone 8y ago
Where is Second Measure getting their data from? Is it statistically valid? They say they analyze "billions of anonymized purchases" which suggests some sort of credit card or bank account scraping.[1] Like the sort of thing those budget management apps do. But... given how small the Model 3 customer base is and how affluent they are, how likely are they to participate in such schemes? Or are they buying wholesale aggregate data from credit card companies? Can they do that? [1] https://www.quora.com/Where-does-Second-Measure-get-its-customer-transaction-data https://www.quora.com/Where-does-Second-Measure-get-its-cust...
- jacobwal 8y ago
  Not sure about Second Measure specifically, but many credit card players sell anonymized purchasing data. Investors often look at this to predict how companies are performing.
thecosas 8y ago
Where does SecondMeasure get their data? I can imagine companies not being super happy about this info getting out, particularly if there are fiscal/stock implications.
goshx 8y ago
I reserved on 04/01/2016 and I am still holding my reservation, but not with the same enthusiasm. I love Tesla and Elon and I hope they succeed, but as I consumer I see the $35k as the equivalent of a click bait. It was the “click bait of the decade”. If I don’t get tired and get a refund, I’ll probably purchase the $49k version. But boy, is it frustrating to see Canadians that placed orders long after me receiving their cars. I understand the reasons, but still.
- rich-and-poor 8y ago
  Everyone wants the future cheaper, faster, and without any compromise, even if there is only a single whipping boy (Elon) to bring it to him
  - goshx 8y ago
    I just want the future without the wrong expectations set. Everybody who reserved knew they’d have to wait. That was and still is the compromise. If at least you could tell me any other situation where people compromised this much for something they believed and wanted.
- gowld 8y ago
  The $35K Model 3 is only one year late. Enough to deeply cut into its leads over the cars that have been increasing performance in the existing $35K price-classes (Chevy, Nissan) to meet in the middle, and with an $8K/ wibble-wobble over the "will you get a tax credit or not", but overall it's not a "never going to happen". Also depends on whether you were mentally taking a $7500 discount for the tax credit that might expire before you can use it.
sabareesh 8y ago
As somebody who actually bought the car, I love it. Originally I was in the market to get bmw x3 but i got rav4 instead 3 years back. Now after 3 years i wanted a self driving car but model s didnt make much sense but model 3 did.
fallingfrog 8y ago
I feel like this has more to do with the turning of the economic cycle than with tesla specifically.. any debt funded spending is starting to dry up.
beedogs 8y ago
I don't really see Tesla lasting another 5 years.
BadassFractal 8y ago
The guy went 40M into debt to finance the company as it almost died a decade ago. Refunds increasing is hardly a hurdle.
dantiberian 8y ago
The title of this article is a bit misleading. Tesla is facing an accelerating rate of Model 3 deposit refunds. This is still not great, but as worded the title suggests people are unhappy with the Model 3's being delivered. The real (still big!) issue is that people are cancelling their reservation before the Model 3 is delivered.
aerovistae 8y ago
This is such a stupid article. Why do people insist on pursuing the idea that there may not be enough demand for the model 3? A car that Tesla can’t even produce enough of yet to meet a fraction of the demand from people already on the waiting list, all without having done any advertising, and everyone’s fretting nobody will want to buy it. It’s absurd.
- asdignoio 8y ago
  The article is not stupid at all. The author never claimed that "there may not be enough demand for the model 3." You're putting those words in her mouth. What she said is that people are rapidly asking for refunds, that Tesla's manufacturing is in trouble, and that this is a serious cause of concern for investors. All of those things are indisputable facts that anyone interested in electric cars would want to hear. And you can't claim that Tesla being unable to meet demand means demand is high. Supply is appallingly low, so even a low demand could result in the backlog of orders we see. The fact that demand exceeds supply doesn't imply that the demand is high enough to keep the company afloat.
  - aerovistae 8y ago
    The article is stupid. The author doesn't have to directly claim there isn't enough demand, because the premise of the article comprehensively implies it. > this is a serious cause of concern for investors. No, it isn't. It's immaterial. Tesla isn't about to get pushed over the brink by some canceled reservations. Even if they had to give up $150 million in reservations out of their several billion dollars on hand, production is gaining steam at a very rapid pace. They're delivering tens of thousands of Model 3's per quarter now. The income from the fulfilled reservations will eclipse the trivial cancellation numbers by so much that I consider it irresponsible financial reporting to suggest otherwise. It's just short-side proselytising, is what it is. It's showing half the picture to reach a flawed conclusion for readers who don't know better. And moreover, I love how in the past year or so suddenly everyone and their aunt is an expert on production and manufacturing and is quite confident that Tesla doing a bad job. Compared to what, exactly? All the other brand new car manufacturers that sprung up a decade ago? Oh, wait.
trumped 8y ago
at least Tesla got to use those interest-free loans for quite a while...
dghughes 8y ago
I think the Chevy Bolt all electric vehicle is luring some customers. It's not as sexy but it's ~400km range and availability right now make it a great buy.
manicdee 8y ago
The biggest question on my mind is whether there's a market for 500,000 Model 3 a year ongoing. BMW is an established player and they sell less than that across their entire range.
- mixmastamyk 8y ago
  Depends on the price and other factors over then next few years.
gwbas1c 8y ago
The problem with the reservation system is that I couldn't wait any longer. My Leaf's lease was up, so my wife and I delayed to the AWD version and bought a different car. Who knows what will happen when the AWD version comes? Will I be willing to replace our other car that we planned on keeping a few years longer?
rjplatte 8y ago
We just need to wait for Toyota to release an EV capitalizing on the ~127mpgE of the Prius Prime, and kill everyone else for a little while.
sschueller 8y ago
I wonder if they will change the policy on the full refund.

221 points by artsandsci 8y ago

Data is based on a report by Second Measure: https://secondmeasure.com https://secondmeasure.com Y Combinator is listed on their website as a ... customer?

venning 8y ago
A quick Googling says they are Summer class of 2015.

jerrysievert 8y ago

while I'm not too surprised that people want refunds on deposits as schedules for luxury goods slip, I feel that the article might have been a little more substance had they included information about percentages of deposit refunds among other verticals, and how those are affected by delays. otherwise, this article feels rather flat.

rsynnott 8y ago
Are there really many comparables? I can’t really think of many scenarios where a normal consumer pays a four figure deposit on something which doesn’t have a release date.

gregoriol 8y ago

I don't know about 25%, I've read 12% somewhere, but I'm thinking about it. I was not one of the first to pre-order and I'm not in the US, which makes the waiting time.. extra long. I'm wondering if by then (something like mid-2019 I guess) it won't be easier to get a "used" one, or even a used model S. I also don't like the opaque pricing: pretty sure with the options I'd like it'll cost no less than 50k€, which is far from the announced low cost. I still like the idea to get a model 3 though, and there is no good alternative as of today.

venning 8y ago
> I've read 12% somewhere In the article. Musk stated 12% last August.

api 8y ago

I have a new personal hypothesis on Elon and his companies. Elon's companies are not necessarily better run than other companies, and in some cases are worse run. Their success and Elon's cult status as an innovator is a result not of above-average managerial competence but of a willingness to unilaterally defy the Nash equilibria of industries. Automobiles, space flight, and energy are industries that have been stagnant for some time. Stagnation of an industry means that it's found some kind of Nash equilibrium where it's not really in anyone's short term best interest to innovate much or otherwise deviate from the norm. Elon doesn't give a rat's you-know-what and innovates anyway. Game theoretically he defects. This results in companies that are loss-making in the short term, but if successful they will define a new Nash equilibrium where they are positioned to lead or at least to have carved out a significant chunk. Another way of putting this is that Elon is willing to try to cross fitness valleys between local maxima. It's a gamble of course: can you reach the next fitness peak / equilibrium point before you run out of cash? This is very hard, and is why Nash equilibria / fitness local maxima are so stubborn.

s2g 8y ago
It's also an indicator of the massive amount of energy put into marketing Elon.
- rich-and-poor 8y ago
  Haha... The only marketing Elon has is word of mouth and the press interviewing him.
arijun 8y ago
But the fact that he's done it twice with SpaceX and at least once with Tesla seems to indicate he's better average at running those races.
- api 8y ago
  Perhaps I wasn't nuanced enough. I think Elon is better than average at the art of defying Nash equilibria -- both in the raising of funds to "disrupt" industries and in the execution of disruption. This is not necessarily the same skill as boring old "ops."

venning 8y ago

Mods, can you change this to the original source article? https://blog.secondmeasure.com/2018/06/04/tesla-faces-accelerating-rate-of-model-3-refunds/ https://blog.secondmeasure.com/2018/06/04/tesla-faces-accele...

sctb 8y ago
Thanks! We've updated the link from https://boingboing.net/2018/06/04/report-almost-25-of-tesla-mo.html https://boingboing.net/2018/06/04/report-almost-25-of-tesla-..., which points to Engadget, which points to this.

Buetol 8y ago

As somebody who got refunded: As much as I want to support Elon, I later realized the full total cost of the car (having a garage, doing the maintenance,..) wasn’t in my budget and that it’s simply better to invest in a lifestyle where I just don’t need a car. Interrestingly, I had the same conclusion about buying an house versus renting a appartment.

p0rky 8y ago
So you decided to not have a house or apartment?
- walrus01 8y ago
  If you live in an older condo building with an uncooperative board, and physical challenges/long distances related to surface mounted conduit routing in the underground parking garage, it could be $8,000 of licensed electrician work to run a new 240VAC circuit to your single parking spot. edit: there are also a number of people who have street parking only. Look at any older neighborhood, it could range from Queen Anne hill in Seattle, to many parts of Boston. Houses may have neither garages nor alleyways.
  - yuhong 8y ago
    One of the things they did with the Model 3 was to improve the efficiency of 120V charging, partly for that reason. Trivia: In Canada, the CEC since 2012 requires a NEMA 5-20 outlet for EV charging at a minimum, and with the Model 3 6-7 miles per hour with it is not uncommon.
    - walrus01 8y ago
      It's still not going to be able to pull anything more than about 1700W from a 120V 15A circuit. Maybe slightly more efficient but the bottleneck is the amperage capacity of the circuit. Think of 120V charging as exactly like a hair dryer.
      - 8y ago

nck4222 8y ago

It was a win-win either way for Tesla. Worst case scenario for them, they got an interest free loan. They could've just put that money in a savings account and made free money off the 1% interest.

jonknee 8y ago
It's not a win win to lose potential customers because you could have made a few bucks in interest in the process.
- nck4222 8y ago
  I'm sure there was an expectation that some percentage of pre orders would refund. I don't think the fact that 23% we're refunded should be used to say Tesla lost customers, considering they're still plus several hundred thousand pre orders. At the end of the day Tesla was able to guage demand, get hundreds of thousands of orders placed (even with the refunds) and get millions of dollars to use for investment/production. Yeah ideally for Tesla no one would all for a refund, but I'm sure they expected some and this still seems like a big win for Tesla.
  - jonknee 8y ago
    A big win for Tesla would be if they were able to produce the car at the pricing and timing they said they were going to. Right now it's at least 50% more expensive and way behind schedule, there is no way to call it a "big win". I bet taking deposits for a car that they have no intention of actually selling for years is a good way to turn a lot of potential customers off.
    - nck4222 8y ago
      If that were true there would be way more than 25% refunded. I honestly expected it to be more, even if they had met their production schedule.
urda 8y ago
Trading long-term customer trust for a short-term cash infusion is not a winning play.

bald 8y ago

At least in the Tesla fan community, a number of people got tired of waiting and bought a Model S/X instead. It remains unclear how many upgraded and as a result of this fell off the reservation list. They should have asked that as well.

twblalock 8y ago
It would be interesting to see how many of the waitlist cancellers bought electric cars from other brands. The Bolt, the Leaf, and the BMW i3 are the obvious alternatives.
- addflip 8y ago
  Anecdata. I cancelled my reservation last month after it came apparent that it would be a while before they start manufacturing base model [1]. Ended up getting the BMW i3 and love it. After incentives it came out $217/month to lease[2]. 1. https://electrek.co/2018/05/21/tesla-ceo-elon-musk-ties-base-model-3-availability-to-company-profitability/ https://electrek.co/2018/05/21/tesla-ceo-elon-musk-ties-base... 2. leasehackr.com/calculator?make=BMW&msrp=47245&sales_price=42450&months=30&mf=.00166&dp=0&doc_fee=80&acq_fee=925&taxed_inc=9500&untaxed_inc=0&rebate=3866&resP=61&reg_fee=400&sales_tax=9.5&memo=&zero_driveoff=true&monthlyTax_radio=true&miles=10000&msd=0
  - stickydink 8y ago
    I've never seen leasehackr before, it seems really interesting. Did you use the site just for the calculator?
    - addflip 8y ago
      Mainly use it for the forums so I could compare other deals in my area. The calculator is just an ancillary benefit.
  - rconti 8y ago
    You can actually get an i3 for perilously close to $20k these days, at least in the Bay Area. PGE+BMW are offering $10k back to buyers, plus $7500 federal tax credit, plus $2500 CA tax credit. I was a model 3 reservation holder, and strongly considered the i3, but ultimately configured a Model 3 a couple of weeks ago (now pushed to July delivery as they're stalling to not hit 200k units before Q3).

ansible 8y ago

It is interesting that at the same time, sales of the Chevy Bolt aren't doing too good. This despite that at least a few reviews I've seen indicate it is a decent EV with decent range. https://www.fool.com/investing/2018/04/05/ev-sales-table.aspx https://www.fool.com/investing/2018/04/05/ev-sales-table.asp...

Element_ 8y ago
I believe there is internal resistance to the Bolt. There have been reports of dealerships being reluctant to sell them. I remember reading an article mentioning it was hard for potential buyers to actually find a Bolt to test drive at a dealership even though GM had plenty of inventory. I believe there are also supply problems in hot markets. The Bolt is currently sold out with waiting list in Canada, I believe it takes months to get one there. http://driving.ca/chevrolet/bolt/auto-news/news/the-chevrolet-bolt-is-a-great-car-so-why-cant-you-buy-one-in-canada http://driving.ca/chevrolet/bolt/auto-news/news/the-chevrole...
- marvin 8y ago
  I'm calling it now: This will be how EV adoption looks for the next five years. Partly the dealers won't cooperate, and partly the manufacturers won't be able/willing to produce enough vehicles (depending on the market in question). Multiple manufacturers have sold out the entire 2018 production, in some cases before deliveries have even started.
  - kalleboo 8y ago
    What's the reason that dealers won't cooperate? Fears that repairs will be lower?
    - erikpukinskis 8y ago
      That and selling the EVs means making sales pitches that make their other inventory look bad.
- 8y ago

fnordfnordfnord 8y ago

This pertains to the people who plunked down a thousand bucks to get in line for one. This is an interesting tidbit, but also a non-story.

callumprentice 8y ago

I ordered two (for me and my wife) the second online ordering opened via my phone at a restaurant as it happens which was novel since we were having a meal with out-of-town friends at the time. We were both very immensely excited but when it became clear that the first release wasn't going to be the inexpensive model we decided to cancel and get a refund. AFAICT, it's still not clear when that model will be available so I think we made the right choice.

gist 8y ago
> which was novel since we were having a meal with out-of-town friends at the time. We were both very immensely excited Behaviorally I am wondering to what extent the fact that you were having a good time with friends (and potentially drinking alcohol and/or at least enjoying your food) played a role in what appears to be an impulse purchase? I say this knowing from way back how there are high end stores that give you food and alcohol while shopping (I have experienced that) and the idea tends to be to get you to purchase more than you would as a result of the heightened mood. Curious on your take on this and playing a role?
- callumprentice 8y ago
  Great question and I know what you mean but honestly, I think very little. We'd been planning to order them for some time, following the news stories etc. and were going to order them at home on a desktop machine but our friends arrived from out of town, wanted to go out and eat dinner so we needed an alternative plan. We didn't want to miss out so I tried using the phone almost as soon as we sat down and was pleasantly surprised by how painless the whole experience was, even on an older phone. Made for some good subsequent dinner time conversation though :)

ckastner 8y ago

Yet another quarter has almost passed and, according to the Bloomberg estimate [1], Tesla will yet again miss their goal of producing 5.000 cars a week -- by far. In the most recent week, it was about half that, 2.560. I guess some some people are just fed up with waiting. [1] https://www.bloomberg.com/graphics/2018-tesla-tracker/ https://www.bloomberg.com/graphics/2018-tesla-tracker/

danhak 8y ago
For some perspective, the Model 3 is already outselling the Chevy Bolt by a factor of > 5x, and has already set the record for greatest monthly deliveries EVER for a plug-in car in the U.S. https://insideevs.com/monthly-plug-in-sales-scorecard/ https://insideevs.com/monthly-plug-in-sales-scorecard/
- ams6110 8y ago
  The Bolt is hideously ugly.
  - stcredzero 8y ago
    No. The Aztek is hideously ugly. The Bolt is nowhere near that ugly. Also, plenty of people don't care if something is ugly, if it's utilitarian. https://www.youtube.com/watch?v=33AP0JnXSOA https://www.youtube.com/watch?v=33AP0JnXSOA
    - paganel 8y ago
      A link to a Doug DeMuro video on HN, that's nice! Back on topic, I think the Bolt looks cool, I think it has an utilitarian and slightly ahead-of-its-time feeling about it which is just cool (the same as Renault Espace and especially Renault Avantime had back in the late '80s - the '90s, when everyone was hating on them, but now they're cool).
      - stcredzero 8y ago

Liuser 8y ago

Been thinking of cancelling my reservation as well. My need for a car has dramatically decreased in the last couple of years with the ubiquity of ride sharing services. Now with last mile services spreading more and more (scooters/bike shares) I'm thinking this trend will only increase. I take the bus and bike to work. Small groceries are also done by bicycle. Whenever I go out to eat with my wife we use a ride sharing service because we enjoy a drink or two with our meals.

Zhenya 8y ago
If you plan on having children and live anywhere in the US (including SF, excluding Manhattan), you'll most likely need a car for Drs visits etc.
- nervousvarun 8y ago
  Why would Uber not work for this? Not necessarily disputing you, just wanted some clarification on why you think that. Anecdotally I know several carless couples with children ostensibly making it work for "unplanned" auto trips via Uber. They live close enough to walk for "planned" trips like grocery store/work etc. Obviously you'd need to live close to those things but that was a major factor in their choice of home (location).
  - ben1040 8y ago
    When the kids are small, where do you find an Uber with one or more suitable car seats? It seems there's spotty availability in a few cities, but the standard from Uber is you get a single car seat appropriate for a child >12 months old. Or do you supply your own, and then drag the seat(s) around with you at your destination?
    - kalleboo 8y ago
      That's an interesting point. At least in the parts of Europe I'm familiar with, Taxis have an exemption for car seat laws. Ubers don't.

yumraj 8y ago

I can totally relate, while we need a car upgrade right now/soon and I can currently configure and order a Model 3, I'm waiting for the 35K version as I just don't see a need for the current longer range model. But at the same time there is no real alternate if I want an EV so I'm waiting. Worst thing is that the federal credit may expire by the time I can order the 35K version. If my current car, a Prius, that needs to be updated dies, my 2 options are Prius Prime or the Honda Clarity Plug-in.

markab21 8y ago
I visited a friend, and he showed me his goofy car, a Chevrolet Volt. This person is someone I'd met at a flying safety conference (I'm a pilot/aircraft owner) as was he and we became friends. He'd made his money in the 80's/90's selling his software company which produced accounting software and retired. I was astonished to hear he'd sold his Lexus for this car. After driving it a few times, I became a bit intrigued. It was goofy, but one of the smoothest power-delivery I'd experienced in a car (I've never driven an electric) and the feel of the car felt good. It's not a luxury car but didn't seem to be lacking much. Long story short, three months later I had traded in my Porsche Macan SUV for a Chevy Volt, the 65-mile range gets me 99% of the time where I need to go, and I've loved not having to stop at gas stations, almost ever. I would have bought the Bolt if I'd been able to get one, but this was late 2016, and they just weren't available. Looking back, for what I paid for the car, what I'm spending on the car for fuel (electricity) and relative maintenance (almost none), this has probably been the best car I've ever owned. I went from considering purchasing a Tesla to now not even being interested because I have everything I need out of a car and am somehow at that rare place of being happy with the relatively modest vehicle. To anyone considering a Volt, do not discount what a value this car is in the market if you have an effective way to charge the thing and it matches your commute cycle. I'll never be able to see petrol cars the same again. (I got a dealer demo with 500 miles for $30k and was able to get a $7500 tax credit), costing $22.5k for a new car. LOVE the vehicle and went from never owning a Chevrolet or American vehicle to now absolutely loving the car even though some people might find the car unattractive. Buy what you like, but what works for you. There are excellent options out there now on the electric market, the problem for some is one of the most practical options is a Chevrolet.

0x4f3759df 8y ago

Is it unwise to buy the first version of car? Seems like you wouldn't want to buy something until they get the kinks out, maybe a few years after production.

TekMol 8y ago

What are the key features of a Tesla Model 3 that make people wait several years for their car instead of just going to a car dealership and buying what is available right now?

ryanhuff 8y ago
Here are a few: 1. Dealerships (experience) suck 2. Gas (petrol) sucks 3. Limited range sucks 4. Good performance is a plus
freerobby 8y ago
1. Convenience of all electric (start every day w/ "full tank", no oil changes or other regular maintenance) 2a. Social mission of the company/product 2b. Carbon footprint per mile driven gets better with age of car, rather than worse like with an ICE. 3. Autopilot 4. FSD hardware ready (even if you don't believe this, it's an advertised feature and may motivate some buyers) 5. No dealing with car salespeople
- TekMol 8y ago
  So electric+autopilot+online. Are there no other electric cars available? Are they not online? Do they have no autopilot?
  - freerobby 8y ago
    The Bolt fits the EV bill if you just need a commuter car. If you want to be able to take a road trip, Tesla is the only serious option. No manufacturer offers anything remotely competitive with Autopilot. Hopefully both of these things change very soon.
    - stephengillie 8y ago
      > No manufacturer offers anything remotely competitive with Autopilot. This is for the better, given the number of collisions occurring with Autopilot engaged or recently engaged. It's too bad the Adaptive Cruise and Autonomous Braking can't be enabled without the Lane Assist. Adaptive Cruise in a Camry Hybrid is a serious benefit and a life-changing amenity. I'm no longer willing to drive cars that don't have Adaptive Cruise.

johnvega 8y ago

I plan to buy Model 3 in about 2 years or so, so this is great news!

RyanShook 8y ago

A couple months ago I got an email saying my Model 3 was ready to be configured. Chose all the base options and saved the order. When I came back the next day the page said I was still on the waiting list as if nothing had been configured... still have my reservation but think a 35k Model 3 may never actually exist.

Talyen42 8y ago
Can't help but think this is on purpose. Elon straight up said they can't sell mostly base models right now and survive, they need premium configs to stay afloat.
- rich-and-poor 8y ago
  Tesla does not need to sell premium configs to "stay afloat". They are selling premium configs so that their margins are not so brutally low, so that they don't get roasted for that as well. Honestly, Tesla can not win: Sell low margin base models, have a terrible quarter and get roasted. Sell high margin, high trim models and get roasted for high priced cars. They can not win.
  - RyanShook 8y ago
    I agreee that they are bound to upset either investors or consumers but Elon often promises the moon for both and I think that is what gets him in trouble most often. Would there be record reservations if the Model 3 was advertised as 50k base?
    - rich-and-poor 8y ago
      No but then they would be lying because base is 35k.
  - jpatokal 8y ago
    When your capacity is limited, selling higher-end models with higher margin is the completely obvious choice to maximize revenue and profit. "Have a terrible quarter" is far worse than "get roasted" by random people on HN.

abalone 8y ago

Where is Second Measure getting their data from? Is it statistically valid? They say they analyze "billions of anonymized purchases" which suggests some sort of credit card or bank account scraping.[1] Like the sort of thing those budget management apps do. But... given how small the Model 3 customer base is and how affluent they are, how likely are they to participate in such schemes? Or are they buying wholesale aggregate data from credit card companies? Can they do that? [1] https://www.quora.com/Where-does-Second-Measure-get-its-customer-transaction-data https://www.quora.com/Where-does-Second-Measure-get-its-cust...

jacobwal 8y ago
Not sure about Second Measure specifically, but many credit card players sell anonymized purchasing data. Investors often look at this to predict how companies are performing.

thecosas 8y ago

Where does SecondMeasure get their data? I can imagine companies not being super happy about this info getting out, particularly if there are fiscal/stock implications.

goshx 8y ago

I reserved on 04/01/2016 and I am still holding my reservation, but not with the same enthusiasm. I love Tesla and Elon and I hope they succeed, but as I consumer I see the $35k as the equivalent of a click bait. It was the “click bait of the decade”. If I don’t get tired and get a refund, I’ll probably purchase the $49k version. But boy, is it frustrating to see Canadians that placed orders long after me receiving their cars. I understand the reasons, but still.

rich-and-poor 8y ago
Everyone wants the future cheaper, faster, and without any compromise, even if there is only a single whipping boy (Elon) to bring it to him
- goshx 8y ago
  I just want the future without the wrong expectations set. Everybody who reserved knew they’d have to wait. That was and still is the compromise. If at least you could tell me any other situation where people compromised this much for something they believed and wanted.
gowld 8y ago
The $35K Model 3 is only one year late. Enough to deeply cut into its leads over the cars that have been increasing performance in the existing $35K price-classes (Chevy, Nissan) to meet in the middle, and with an $8K/ wibble-wobble over the "will you get a tax credit or not", but overall it's not a "never going to happen". Also depends on whether you were mentally taking a $7500 discount for the tax credit that might expire before you can use it.

sabareesh 8y ago

As somebody who actually bought the car, I love it. Originally I was in the market to get bmw x3 but i got rav4 instead 3 years back. Now after 3 years i wanted a self driving car but model s didnt make much sense but model 3 did.

fallingfrog 8y ago

I feel like this has more to do with the turning of the economic cycle than with tesla specifically.. any debt funded spending is starting to dry up.

beedogs 8y ago

I don't really see Tesla lasting another 5 years.

BadassFractal 8y ago

The guy went 40M into debt to finance the company as it almost died a decade ago. Refunds increasing is hardly a hurdle.

dantiberian 8y ago

The title of this article is a bit misleading. Tesla is facing an accelerating rate of Model 3 deposit refunds. This is still not great, but as worded the title suggests people are unhappy with the Model 3's being delivered. The real (still big!) issue is that people are cancelling their reservation before the Model 3 is delivered.

aerovistae 8y ago

This is such a stupid article. Why do people insist on pursuing the idea that there may not be enough demand for the model 3? A car that Tesla can’t even produce enough of yet to meet a fraction of the demand from people already on the waiting list, all without having done any advertising, and everyone’s fretting nobody will want to buy it. It’s absurd.

asdignoio 8y ago
The article is not stupid at all. The author never claimed that "there may not be enough demand for the model 3." You're putting those words in her mouth. What she said is that people are rapidly asking for refunds, that Tesla's manufacturing is in trouble, and that this is a serious cause of concern for investors. All of those things are indisputable facts that anyone interested in electric cars would want to hear. And you can't claim that Tesla being unable to meet demand means demand is high. Supply is appallingly low, so even a low demand could result in the backlog of orders we see. The fact that demand exceeds supply doesn't imply that the demand is high enough to keep the company afloat.
- aerovistae 8y ago
  The article is stupid. The author doesn't have to directly claim there isn't enough demand, because the premise of the article comprehensively implies it. > this is a serious cause of concern for investors. No, it isn't. It's immaterial. Tesla isn't about to get pushed over the brink by some canceled reservations. Even if they had to give up $150 million in reservations out of their several billion dollars on hand, production is gaining steam at a very rapid pace. They're delivering tens of thousands of Model 3's per quarter now. The income from the fulfilled reservations will eclipse the trivial cancellation numbers by so much that I consider it irresponsible financial reporting to suggest otherwise. It's just short-side proselytising, is what it is. It's showing half the picture to reach a flawed conclusion for readers who don't know better. And moreover, I love how in the past year or so suddenly everyone and their aunt is an expert on production and manufacturing and is quite confident that Tesla doing a bad job. Compared to what, exactly? All the other brand new car manufacturers that sprung up a decade ago? Oh, wait.

trumped 8y ago

at least Tesla got to use those interest-free loans for quite a while...

dghughes 8y ago

I think the Chevy Bolt all electric vehicle is luring some customers. It's not as sexy but it's ~400km range and availability right now make it a great buy.

manicdee 8y ago

The biggest question on my mind is whether there's a market for 500,000 Model 3 a year ongoing. BMW is an established player and they sell less than that across their entire range.

mixmastamyk 8y ago
Depends on the price and other factors over then next few years.

gwbas1c 8y ago

The problem with the reservation system is that I couldn't wait any longer. My Leaf's lease was up, so my wife and I delayed to the AWD version and bought a different car. Who knows what will happen when the AWD version comes? Will I be willing to replace our other car that we planned on keeping a few years longer?

rjplatte 8y ago

We just need to wait for Toyota to release an EV capitalizing on the ~127mpgE of the Prius Prime, and kill everyone else for a little while.

sschueller 8y ago

I wonder if they will change the policy on the full refund.