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Model X Deposit Non-Refundable?

Model X Deposit Non-Refundable?

So I'm a very happy Model S (and Tesla stock) owner who has already convinced one friend to join the Tesla movement (she's now the proud owner of a red P85). I had another friend convinced as well, but she needs to wait for the X since she has 4 kids. This week, she went to the University Towne Center gallery in San Diego, check in hand, to put down a deposit for an X, knowing that it wouldn't be delivered until next year.

She let me know afterward that she didn't put down a deposit because the Tesla employee who "helped" her at the gallery told her that even if she gave them a check that day, she would not receive her MX for at least 2 years, and that the deposit is completely non-refundable ("If you put the money down, you're buying the car"). My friend is an educated profession, and is not the type of woman that would misunderstand. Deciding that she couldn't commit to the car given the non-refundable deposit, without knowing how much the car would be or when she would receive it, she walked away, frustrated.

I looked online, and it appears to me that the policy has not changed, that the deposit remains refundable.

What a bummer. I am a huge fan of Tesla, and am bummed that a very easy going woman would walk away with such a negative impression of the company (apparently the employee wasn't very pleasant, either). I copied the policy as listed on the Tesla website and texted it to her, so hopefully she'll reconsider.

NumberOne | 8 August, 2014

Perhaps she should consider speaking to the manager of that particular store, to let them know that they have training issues. If not hopefully the right person will notice your post... Anyway, the employee is wrong on both counts. If she ordered now, she is still likely to get the car by the end of next year.

Tâm | 8 August, 2014

@crmohler

1) What counts is a legal document, not what a rep says.

It's at:

https://www.teslamotors.com/sites/default/files/blog_attachments/2012080...

It says very clearly:

"2. Nature of Agreement; Non-Binding Reservation Payment

The Reservation Payment is fully refundable by us to you at any time (for example, if you choose to cancel or abandon your reservation, or if we decline to maintain you as a reservation holder)."

2) Wait time:

It's unpredictable and hard to be precise. 2 year wait sounds reasonable. Let's say Signatures roll out at the end of 2014. General production roll out in Summer 2015. Fill orders for more than 12,000 up to now. Hers will be around 2016.

Red Sage ca us | 8 August, 2014

Proof of Concept...

It will not take two years. Even if the very first production Model X rolls out of the factory in July 2015, all current US reservations will be filled before the end of November. There must be an expedited production of Model X because it is bound to outsell Model S by 3:1. Tesla Motors must be able to meet that demand smoothly and efficiently in order to prove their transition to Model ≡ will be similarly successful.

NumberOne | 9 August, 2014

Model S and X production cannot be compared. The first alpha prototypes have already been produced. Their purpose is to test the assembly line and electronics. The betas are due out by September. General production is still slated for Spring, and by the summer more than 500 vehicles will be produced. That is 2000 per month. Simple math indicates that 12000 deliveries are possible by the end of 2015 if that number is not increased. Elon has stated that the goal is to produce 2000 vehicles per week by the end of 2016. To be specific, 1000 each of Model S and X.

Much of the equipment Tesla is currently using was either not yet fine tuned or in place when Model S production started, which necessitated a much slower production ramp up. With Model X Everything is already in place.

Tâm | 9 August, 2014

@Red Sage & LeonardD:

It's great to predict @crmohler's friend's delivery date prior to 2016.

However, I do think when it comes to delivery, it's better to under-promise in case of unforeseeable delays then over-promise and may get customers mad!

Remember the "Smash! Smash! Smash!" on the windshield because the Chinese owner was furious at the delay?

Model X was on the floor of 1/2012 Detroit Auto Show and the unveiling of Model X was on 2/2012. Delivery was estimated for 2013 at those events.

Historically there were delays for Roadster, then Model S.

It's true that now is different than the past but you can never guess that future may throw in a monkey wrench when least expected.

Red Sage ca us | 9 August, 2014

Even if there is a relatively slow buildup of weekly production, it will not take long to produce 18,000 of the Model X:
Rate/Week QTY Totals
100 x 4 400 400
200 x 4 800 1,200
400 x 4 1,600 2,800
800 x 19 15,200 18,000
A 31 week schedule, beginning the first week of July 2015 would be complete long before August 2016. I personally expect production of Model X to begin in January 2015 at the latest, reaching 600-800 per week before June 2015. A further expansion at Fremont in July 2015 might allow for Midel X production to go beyond 1,500 per week.

I do not expect any delays to the Model ≡ product line at all.

NumberOne | 9 August, 2014

I agree with Red Sage on this. One reason is the fact that the Model X has already been pushed back twice since I made my reservation. First from Fall of '13, to Fall of '14 to Spring of '15. There will not be another delay, and if anything, Tesla is under promising this time.

There is simply no comparison with the initial Roadster, which was fraught with problems and delays. They did not have even close to the necessary resources, at that time, and the Model S had its own problems too. The Model X is not really a 'new' product because Tesla had the opportunity to test just about every feature except the doors on a modified Model S, which is built on the same platform. Yes, I know the Model X is new, but it is not the first as was the case with the Model S.

georgehawley.fl.us | 9 August, 2014

There are already something like 19,000+ reservations for Model X. Using Red Sage's numbers above for 2015 Model X production, it could be that new reservations could reasonably expect vehicles in 1Q2016, barring hiccups. Looks like there will be 80+% commonality in hardware and software between MS and MX, reducing both cost and risk of MX delays.

In these times, if one is given questionable information by a sales person, one can instantly check websites for verification purposes, aided by free wifi at all dealers/stores. Still, no excuse for misinformed gallery attendant.

There should be an app of Tesla Model X projected availability, based on making a reservation on the current date.

BTW, I don't think the loaner windshield smashing was due to delay in receiving his car. I think the guy has a web-based business that he used Tesla to publicize, Kardashian style. Publicity is so valuable these days that some people will resort to ridiculous extremes to go viral.

Tâm | 9 August, 2014

@georgehawley

It might be true that the Chinese owner could have used Kardashian style publicity but his reason was stated clearly.

He was not the only one who complained about the delays.

You may minimize the issue, but Elon public acknowledged the delay and he disclosed that he met with a group of disgruntled owners prior to the Delivery Ceremony to appologize.

If you watch Beijing delivery video clip, you wouldn't miss another female owner unpleasantly scolded Elon at about 2:08 in front of news media.

http://live.wsj.com/video/tesla-seeks-china-charge/D0CDF306-97F4-4448-B1...

By the way, it was not a loaner. It was his very own car that he bought and smashed.

http://blogs.wsj.com/chinarealtime/2014/06/27/disgruntled-chinese-custom...

A delivery estimate is literally held as a guaranteed exact date to some people and they have very little tolerance for a disappointment.

Tâm | 9 August, 2014

Let's try the video link again:

Tesla Seeks China Charge 

georgehawley.fl.us | 10 August, 2014
Brian H | 11 August, 2014

Isn't that the same Wang?

aljjr2 | 11 August, 2014

As my mother used to say.... "don't cut off you nose to spite your face". Too much ego and money.

the bonnie | 17 August, 2014

Notice that when the Chinese customer smashed his car, he didn't hit a body panel, which would be expensive to repair. He hit the windshield, a relatively easy part that can be quickly replaced and is relatively cheap compared to anything else he could have hit.

That was a well thought out (immature) action & clearly for show.

Brian H | 17 August, 2014

Yeah, and I noticed the other smasher (of a Lambo) who hired guys to wreck that one did have them do a thorough job, body and all. Interesting contrast!

Haggy | 17 August, 2014

The dealership was (sort of) correct that if you put down a deposit for a purchase agreement, it's non refundable. But there's no way to do that for a Model X. You can put down a deposit for a reservation agreement, which can, optionally, be turned into a purchase agreement, with neither party bound to offer that option. Tesla can decide it doesn't want to make the Model X at all and give you your money back, or decide it can't make your car until 2016, in which case you could cancel and they could still cancel later on. Once they offer to change the reservation into a purchase agreement, you are bound by the terms of that new agreement and the old one no longer exists.

NumberOne | 17 August, 2014

That is something I did not think of. There is a non refundable deposit when your order is finalized, but one production is started, the deposit becomes non refundable. In fact, since each car is made to order, this puts you in a spot where it is difficult to change your mind. Kind of like having a custom home built, and then refusing to take possession when it is time to move in. You should be liable for the full cost. The reservation fee would be treated the same for the Model X. I believe the contract actually states that it is fully refundable until the order is finalized.

dc661 | 17 August, 2014

Apparently the behavior of the Tesla store employee was intentional. Tesla is anti-selling the Model X.

http://ecomento.com/2014/08/05/tesla-admits-to-anti-selling-2015-model-x...

Tâm | 2 September, 2014

Wait Time:

Research firm Stifel is in the same agreement with the rep:

Model X pre-orders are so strong that those who haven’t booked the crossover to this point, should expect deliveries in 2016.

http://www.valuewalk.com/2014/09/tesla-motors-stifel-upgrade-400/

Tâm | 17 September, 2014

@crmohler

From the horse's mouth today, Thursday, 09/17/2014: 2015 production is sold out. That is consistent with the store rep that no 2014 or 2015 delivery for those who procrastinate!

Thanks to the video clip submitted by @mdemetri from the other thread:

http://www.teslamotors.com/forum/forums/model-x-basically-sold-out-2015

Red Sage ca us | 17 October, 2014

~*bimp*~

With the introduction of the Tesla Model S P85D there are:
Some that believe it is a temporary substitute for a further delayed Model X...
Some that are disappointed that no mention was made of the Model X at the Tesla 'D' Event...
Some that believe that this simply proves Tesla Motors is closer to releasing Model X than anyone expects...
Some that still believe Model X won't be seen until Christmas 2015 at the earliest...
Some that insist this is proof that Tesla Motors never meant to go mass market and will always sell 'luxury cars for the rich'...
Some that persist in stating all that Tesla Motors does is inevitably delayed, that they over-promise and never deliver, and they are bound to fail, no matter what, because it's really just a matter of time...
What say ye, folks?