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Tesla Faces Accelerating Rate of Model 3 Refunds (recode.net) 174

According to new U.S. data from analytics company Second Measure, Tesla is facing an accelerated rate of Model 3 refunds. As of the end of April, some 23 percent of all Model 3 deposits in the U.S. had been refunded. "Model 3 deposits are fully refundable up until the customer configures a car by selecting features and paying an additional fee of $2,500," notes Second Measure. "After configuration, vehicles are typically delivered in just a few weeks." Recode reports: These cancellations aren't necessarily bad for Tesla, since its production rate is nowhere near as high as it needs to be to fulfill the more than 450,000 reservations it still has. Last quarter, it delivered just 8,180 Model 3s. Presumably, potential Tesla customers could make a deposit again when production is more regular. The potential longer-term harm would be in alienating them so that they choose a different brand of car altogether. About 60 percent of Model 3 reservations so far in the U.S. were made back in April 2016, when Tesla first began taking deposits. About 18 percent of the total refunds on the Model 3 happened this past April, the largest share out of any month, according to Second Measure. That's when Musk explained that Model 3s would be delayed six to nine months. A Tesla spokesperson said that Second Measure's data does not align with its internal data, but would not be more specific as to how far off it is. But the analytics company's numbers did match up to Tesla's numbers last August, "when CEO Elon Musk disclosed that there were 455,000 net reservations out of 518,000 gross reservations, suggesting 63,000 cancelations and a 12 percent cancellation rate," reports TechCrunch.
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Tesla Faces Accelerating Rate of Model 3 Refunds

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  • by Anonymous Coward

    its production rate is nowhere near as high as it needs to be to fulfill the more than 450,000 reservations it still has. Last quarter, it delivered just 8,180 Model 3s.

    Only 14 more years to go. Imagine paying full retail for a 2002 model year car.

    I'm just here to trigger Rei. We might have to wait for him to clock back in to get a response.

    • 'Where's Rei' is sorta like 'Where's Waldo' although it's far more obvious when he appears.

      There are rumors going around that Rei is Elon Musk's handle. Rei's comments are always complete and comprehensive, like an Elon Musk press conference.

      You don't think Musk has a Slashdot account??

      • by Anonymous Coward

        Rei does not hide who she is.

        https://www.model3ownersclub.com/members/karenrei.7284/ [model3ownersclub.com]

        I enjoy reading her comments here. She's interested in Telsa and reads several Tesla discussion boards so she often posts facts I had no idea about before they are common knowledge. She does post prolific answers about Teslas but she provides references to back up things she claims, which puts her way ahead of most on Slashdot.

        If you really don't like seeing what she posts, use the "Enemy" feature on Slashdot and it will e

      • Re:16 years (Score:5, Informative)

        by Type44Q ( 1233630 ) on Tuesday June 05, 2018 @11:02AM (#56731332)

        You don't think Musk has a Slashdot account??

        His sheer levels of productivity suggest otherwise.

    • by Tuidjy ( 321055 )

      > Imagine paying full retail for a 2002 model year car.

      Are you kidding me?

      If I could buy a factory new 2002 Toyota Supra, I'd do it without a second of thought. A few years ago, I bought a low mileage 1989 Supra with a blown engine, spent less than $10,000 dollars on it, and have a 460hp car that I love. It's my daily driver. I could resell it with a 50% profit without trying... this does not include my labor, but I enjoyed it.

      But to get my hands on low miles Mk IV? One that no one has abused, or s

      • by nasch ( 598556 )

        That's pretty unusual though. Most 16 year old cars sell for pennies (or dimes) on the dollar.

  • Two front-page, back-to-back stories maligning Tesla and Space-X, by the same submitter.

    Who's paying for this?

    • by Anonymous Coward on Monday June 04, 2018 @08:11PM (#56728402)

      Who's paying for this?

      I am. It's cheaper than bribing Donald Trump to raise tariffs to crush my competition.

    • Short sellers (Score:5, Interesting)

      by Okian Warrior ( 537106 ) on Monday June 04, 2018 @08:32PM (#56728470) Homepage Journal

      Tesla is the most shorted stock in history [cnbc.com].

      This gives many, many people an incentive to trash-talk the company, so that the stock tanks and they can make money.

      "Oh, but wait: if you look at the numbers this way, it shows that Tesla will crash and burn any day now."

      or,

      "Musk is a serial liar, literally nothing that comes out of his mouth is true. The company is run by incompetent nincompoops and Musk is one bad day swsy from a psychotic break"

      Tesla will either crash and burn, or be completely out of the woods, in 3 months. Call it 6 months just for some wiggle room: by the end of the year, Tesla will be either gone or a rock solid investment.

      What you are seeing is a bunch of last-ditch efforts to try and crash the stock so people can make some money from it.

      Fortunately, many Tesla investors have realized that news reports about Tesla don't matter (I read one report that said exactly that, but can't find it ATM). They're going to wait out the summer storm and see a stronger, better company in the Fall.

      Stock prices have dipped *slightly* over the last month, but have largely recovered [google.com].

      Investors are keen to wait out the storm. Check back in 6 months time.

      • Re:Short sellers (Score:5, Interesting)

        by fatwilbur ( 1098563 ) on Monday June 04, 2018 @09:31PM (#56728710)
        Why isn't the harsh criticism warranted? There's a reason it's the most shorted stock in history, and hint, it's not just because someone out there has a big hate-on for Musk.

        Tesla is already worth more on the stock market than Ford Co. It needs perfect execution and exponentially growing sales to the point of one of the world's largest automakers to be worth CURRENT price, let alone any growth at all. This is clearly what we used to call "irrational exuberance".
        • What does that have to do with the viability of the company?

          Speculators are speculators, playing games with the stock price, creating clickbait news stories to match their own personal agendas.

          None of that alters Tesla's cash flow or how many cars are being shipped.

        • History. I remember this little company called Apple Computer back 10-12+ years ago. It was the same shit then, and it gave an opportunity to make money as a bull or bear because of the manipulation.

          Tesla’s bull case is Elon Musk. Period. Their bear case is Ford. If you just think they are a car manufacturer, shorting makes sense. Me, I’m long Tesla (and Musk).

          • People seem to forget that Tesla is not just a car maker - that's just the most visible product line.

            They are also a grid-scale energy company, with gigawatts of installed PV solar and hundreds of megawatts of battery storage evening out regional grids in the western US, Europe, and Australia. The reason some people are still alive in Puerto Rico after the hurricane: Tesla batteries and solar panels.

            They might not sell as many cars as Ford, but they sure install a hell of a lot more energy production and s

        • it's not just because someone out there has a big hate-on for Musk

          Nor could it be just because they want to make a profit...

      • by Octorian ( 14086 )

        Stock prices have dipped *slightly* over the last month, but have largely recovered

        Yet every time the price goes up a few points, we see an article about how its soaring. And every time it dips a few points, we see an article about how its plummeting.

      • Re:Short sellers (Score:5, Informative)

        by Pascal Sartoretti ( 454385 ) on Tuesday June 05, 2018 @02:04AM (#56729398)

        Tesla will either crash and burn, or be completely out of the woods, in 3 months. Call it 6 months just for some wiggle room: by the end of the year, Tesla will be either gone or a rock solid investment.

        There is an excellent graph of Tesla's free cash flow [arstechnica.com] that supports this.

        • by jeremyp ( 130771 )

          Are you talking about the graph that shows it growing exponentially more negative with a few returns to just about positive between models?

          The problem is that the debt required to finance all those long red bars (and more to come because Tesla has already announced more new models to be developed) might eat all the positive cash flow and more. If you were looking to buy some stock and you saw that graph without knowing it's Tesla, would you put money in? I wouldn't.

          • I'm sure Elon Musk doesn't care about whether you want to invest in his company or not.

            • I'm sure Elon Musk doesn't care about whether you want to invest in his company or not.

              Actually, he does, though he's much more concerned about the institutions who own the bulk of TSLA. Because if the stock price drops enough then he'll be margin called on the loans he took out against his shares. He'll be forced to sell his own position in the company. It'll be an interesting show to watch. Six or so institutions, along with Musk, own ~75% of the shares. Once one of them gets spooked enough by the deteriorating financials and starts dumping, that could trigger the others to start dumping, w

          • by Anonymous Coward

            I think the point is that if he didn't invest all the cash immediately into the next model, he'd be able to make some nice green bars.

            If he puts off the next model a few years, it stands to reason he could have some nice big green bars off the model 3.

            Whether he will do that or invest in the next model right away is a different story.

          • Are you talking about the graph that shows it growing exponentially more negative with a few returns to just about positive between models?

            Yes

            The problem is that the debt required to finance all those long red bars (and more to come because Tesla has already announced more new models to be developed) might eat all the positive cash flow and more.

            If Tesla is able to generate a positive cash flow once the production issues are ironed, then Tesla has a value; even if it goes bankrupt because of its debt, Tesla will continue to exist after its assets (and its brand) are bought by a major actor.

            If you were looking to buy some stock and you saw that graph without knowing it's Tesla, would you put money in? I wouldn't.

            I am not a gambler; I would neither put money in Tesla nor short it.

      • Tesla is the most shorted stock in history [cnbc.com].

        This gives many, many people an incentive to trash-talk the company, so that the stock tanks and they can make money.

        Investors don't short stock in hopes that trash talk brings the price down, they short based on the risks to success they feel exist, the financial sheet, and the ongoing performance of the company in general. There are many more people long on Tesla which would mean even more incentive out there to 'hype' the company.

      • > Tesla will either crash and burn, or be completely out of the woods, in 3 months. Call it 6 months just for some wiggle room: by the end of the year, Tesla will be either gone or a rock solid investment.

        Tesla's current stock valuation has them bigger than General Motors, Ford, or Toyota. Let's look carefully at TFS:

        --
        Last quarter, it delivered just 8,180 Model 3s
        --

        There are about a dozen companies which each delivered MILLIONS of cars in that time frame. Nissan, Honda, Daimler, Fiat - all of these comp

        • I mentioned their stock price says Tesla is the world's largest company (though they sell thousands of cars, while real car companies sell millions). The fanbois then typically say "but they make *electric* cars, and electric cars are the future." Okay, but you should know Tesla isn't the biggest electric cass maker either. The biggest electric car maker would be either Nissan or one of a three Chinese companies. The Chinese companies are intertwined, and sales figures are hard to come by, but the majority

      • by mbkennel ( 97636 )
        Why would Tesla be gone in a few months?

        People talk about some upcoming need to raise capital as though it's imminent bankruptcy. Is it? Suppose it happens? What if the CEO calls up a few billionaire friends and $200 million is invested fairly rapidly in refinacing upcoming debt. Sure there's some dilution and the stock price goes down temporarily, but then what's the future outlook at that moment?

        The technology is capable, gross margins look favorable, production is increasing and there's no longer imm
    • Two front-page, back-to-back stories maligning Tesla and Space-X, by the same submitter.

      Is either story untrue? Both seem easy to fact-check.

      • Articles about Musk not only have to be true, they also have to be positive. Otherwise they can only be a conspiracy.
      • by thegarbz ( 1787294 ) on Tuesday June 05, 2018 @01:54AM (#56729364)

        Is either story untrue? Both seem easy to fact-check.

        Something doesn't need to be true or false in order to achieve a goal of crediting or discrediting something or someone. One can always find positive and negative things about everyone and almost anything. The positive or negative bias comes with which stories run with which spin.

        You can see this in articles we discussed on the weekend: "Smartphone shipments are down for the first time in 2017" was quickly spun in the comments to "Apple smartphones defiant against an android slump in 2017" Both are true, both are based on the same data, and both drive different agendas from the person making the comments.

    • Two front-page, back-to-back stories maligning Tesla and Space-X, by the same submitter.

      And here we see the force of the Cult Of Elon (as well as the general tendency of internet posters to exaggerate) - facts are now "maligning".

    • Who's paying for this?

      Not everyone needs to be paid to shit on things or people they don't like.

    • I have to agree with you. Over the past several months there have been lots of "dump Tesla" - some even including the upfront "we're short on Tesla." They sure are good at getting free press from the media. You'd think Tesla was about to go under - being short on cash etc.

      But that said. If I had put down $1,000 several years ago waiting for a $35,000 car only to find out that the car isn't coming out anytime soon....I might cash out. Why lend them $1,000 when I can just wait for the actual car to be

      • Plus, the big thing that deterred me from putting down money in the first place was that it was quite clear that the combination of the $35k car and the full federal tax credit was pretty much a pipe dream. I expect a lot of people though they would get both of those and effectively have a $28k car, but in reality nobody is getting that.

  • Simple Solution (Score:5, Interesting)

    by nehumanuscrede ( 624750 ) on Monday June 04, 2018 @08:05PM (#56728382)

    Deliver on your promises or be prepared to reap the whirlwind that follows.

    These days, people have little patience for waiting.

  • I will put that as my guess for the day that Tesla announces bankruptcy.

  • ...it must be the "shorts" that are paying for all this bad Tesla publicity. There is no problem with Tesla, even though they haven't hit any production targets and are burning through billions of dollars. TSLA is a very sound investment. It definitely is worth a $50B market cap!
  • I predict a much higher rate of refunds when it becomes clear that no Model 3 cars with the base configuration will be eligible for the Federal $7.5k rebate.

  • by Strudelkugel ( 594414 ) on Monday June 04, 2018 @08:57PM (#56728584)
    For those interested in option prices as an indicator:

    Tesla December 140 puts are $4.55 as of this post For comparison, Apple December 100 puts are $0.14.

    A put option allows the owner of it to sell shares of stock at the contract price at a specific date in the future. In this case, buying the right to sell someone TSLA for $140 / share in December 2018 will cost $4.55 / share. That means a buyer today thinks TSLA will decline to less than $135.45 per share ($140-$4.55) at which point the position becomes profitable.

    Apple would have to decline to a bit less than $100 / per share to have a similar decline, but the $100 December put contract is close enough. In case of Apple, put sellers are offering the contract at 14 cents per share. In other words, sellers of Tesla puts are pricing them 32x the price of Apple puts, meaning put sellers are demanding a high price since they think the odds of Tesla declining by at least 50% are reasonably high, especially compared to Apple. Maybe it isn't fair to compare to Apple, but GM December 22 puts are selling for 24 cents, and that is less of a decline on a percentage basis.

    Another way of looking at Tesla compared to GM and Ford in charts [businessinsider.com] helps explain why the puts are so expensive. The charts are from last year, but the story hasn't changed much.
    • by sawka ( 543157 ) on Monday June 04, 2018 @09:17PM (#56728670)
      Everyone loves to compare Tesla to GM or Ford as if they are good companies. Don't forget GM actually *did* go bankrupt in 2009 (and Ford nearly did). As for debt, check out GM's and Ford's balance sheets. GM is carrying $99B of debt, and Ford is carrying $158B (per Yahoo Finance).
      • by fozzy1015 ( 264592 ) on Monday June 04, 2018 @10:38PM (#56728882)

        "Everyone loves to compare Tesla to GM or Ford as if they are good companies. Don't forget GM actually *did* go bankrupt in 2009 (and Ford nearly did). As for debt, check out GM's and Ford's balance sheets. GM is carrying $99B of debt, and Ford is carrying $158B (per Yahoo Finance)."

        Ford and GM have billions in the bank. Their revenues are many times more than Tesla's. They pay a dividend. You can't compare outstanding debt between Tesla and them. The only reason Tesla is compared to Ford or GM at all is because of its ludicrous market cap.

      • And Ford and GM actually make a profit, too... Having a debt with positive cash flow isn't nearly as scary as having a debt with a negative cash flow...
  • Happens when you have a good product...
  • by BlueCoder ( 223005 ) on Monday June 04, 2018 @10:53PM (#56728960)

    People put down a deposit in case they wanted one knowing it would be a long wait. They are simply in the mood for a new car now. The novelty just isn't there.

    That aside I think the production issues are mainly with producing batteries.

    • by Anonymous Coward

      What issues producing batteries? Panasonic keeps churning them at the rates Musk is asking for.

    • by Anonymous Coward

      Or they wanted the $35k car and the highly optioned ones being sold today aren't what they want, so they're going for a Leaf or Bolt instead.

  • I'd be curious how many of those cancellations were just people plopping down $1,000 because of all the media hype around the new car but were never that serious about buying one. Once their slot is up and they have to decide to move forward with the order or not, they opt to refund out.
  • Hertz, and Panera have this problem all the time; their solution is to offer something a little extra. Offering a discount to an impatient client, tamps down their negative zeal. For example $30K for a Model 3 with AWS and Extended Battery would be a good initial beginning; personally I would wait for that.
  • These cancellations aren't necessarily bad for Tesla

    By that logic if every single person cancelled they would have no problem meeting the demand!

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