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Way to generate Cash for Tesla to help ramp up production

Way to generate Cash for Tesla to help ramp up production

I hope Elon or someone his management or finance team reads this suggestion:

Most people finance and pay for their car after they take ownership of it. Why not allow people to basically "free pre-finance" the model 3? This could end up significantly increasing current cash-flow for Tesla to help fund the expansion needed to meet current demand. For example -- I would be willing to pay $500 / month on my Model 3 starting now until I take delivery. Thus when I take delivery I will owe and have to finance far less -- almost like a larger down-payment. You can make it flexible and TOTALLY optional. Even if just 10% of the people on the waiting list do this -- it could add tens of millions / month in additional cash flow to help finance a more robust Model 3 launch. Of course make it refundable if they choose not to purchase one like the initial deposit.

Think about it guys.....I'm already starting my Tesla savings fund for my down payment -- I may as well just have you save it for me!

jordanrichard | 07. April 2016

Basically you are talking about a lay-a-way approach like K-Mart. I am sure there are some legal reasons as to why they don't do this.

For example, based on the 325,000 reservations so far, Tesla on the surface has made $325,000.000. However, they legally I am sure, can't spend that because all of those reservations are refundable.

MarlonBrown | 07. April 2016

I think the best way would be to require the "signature" series. I would be willing to put $3k-$5k deposit to get a fully loaded car and get ahead. That was done in the past and it worked well.

chuck | 07. April 2016

I am not an accountant, but my GUESS is that they would have to carry that money on their books as debt which has ramifications.

noleaf4me | 07. April 2016

Again -- not sure as I'm not a finance guy but what is the difference between taking a "deposit" in one shot or multiple ones? They asked for much higher deposits on the S&X. Just thinking outside the box on how Tesla can generate some extra up front cash to help fund quicker expansion.

jordanrichard | 07. April 2016

They asked for much higher deposits because those vehicles cost more. So in Tesla judgment, for a $35K car, $1K was an appropriately scaled down version of the deposit on the MM and MX.

dsvick | 07. April 2016

Lay away for a car!? I would do that!

I'm not an account, but I think, if the moneys are refundable, that Tesla can't spend it, at least not as easily. Maybe make it transferable to an MS or MX if you decide you can't wait or don't like the ☰ after more details are revealed.

adias.angel | 07. April 2016

Also I think you will find some people would prefer to accrue the interest themselves and have that much more of a deposit. That is what I have been doing.

The $1000 deposit is like a interest free loan to Tesla. You don't purchase they give you the money back but they got to borrow your money for 18 months or more with no cost to them. While I love Tesla and Musk, I'm not sure I want to give him a $35k loan interest free. ;)

jordanrichard | 07. April 2016

If they can't spend the money, then it's not a loan. True, you are not earning interest but by what banks are paying for interest, are you really losing out on anything on that $1K.

Red Sage ca us | 07. April 2016

This is precisely the sort of suggestion that is very likely to gain the ire of the US Government. Very ill-advised. Such creative actions are the sort that made major problems for Tucker and DeLorean.

You want to start paying for your car early? Fine. Pay yourself over the next 18-36 months the amount you would have paid a creditor. Place those funds in an account earmarked for your Model ☰. Sorted.

adias.angel | 07. April 2016

@jordanrichard: $1000 - no worries. $35k different story. What can I say, I like to make every single dollar count.

Ankit Mishra | 07. April 2016

Model S and Model X sales will fund Model 3. People can offer their suggestions but Tesla needs none. It has no doubt on how to reach where it wants to go. IMHO.

noleaf4me | 07. April 2016

Just trying to figure out ways Tesla can accelerate the delivery of the Model 3 -- and having some extra cash on hand will not hurt....

Bighorn | 07. April 2016

They can do what they've done several other times--issue stock. Banks snatched up the last round around $242/share IIRC.