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Elon, increase fee to $3k or $2k

Elon, increase fee to $3k or $2k

I always thought that requiring only $1k as a reservation fee would attract too many people. Not a good thing to Tesla having excessive demand that it cannot be met. Also eventually the backlog will frustrate prospective buyers and it will give a bad press to Tesla. Please adjust fee accordingly to $3k. Otherwise if we are at 200k reserves on the second day, till end of the year it would be surpassing 500k and that doesnt look solid. I imagine if fee is $3k, you would see more sustainable demand.

jordanrichard | 1 aprile 2016

No, I completely disagree. What is the point of raising the fee? If people get frustrated and walk away, so be it. The same thing happened to a certain extent with the X and they are still having to down play the X. Look at the X page, you can't order one still, because they are working on the backlog. Word getting out of the fact, actually only increases the demand.

MarlonBrown | 1 aprile 2016

Oh my God, Jordan. It is the well known principle of supply and demand. Initial production will be less than 200k/year? Man likely reservations it is at 200k as I finish writing here. Will it be 1 million by end of 2016?! Well people didnt believe me when I predicted over 100k in the first day.

jordanrichard | 1 aprile 2016

Well, first, I wasn't aware that you made that prediction to begin with to disbelieve you. Second, Tesla doesn't go hug wild and take advantage of their potential customers and jack up the price just because they can. The MS is still a build to order car and as I said, there is such demand (backlog) for the X that you can't order one, yet Tesla hasn't jacked up the price when they easily could, like a traditional car company and their dealers.

This demand for the Model ≡ will tapper off before production begins. Did you reserve one?

qvtruong09 | 1 aprile 2016

I don't think Tesla is going to put their factory into full production mode in 2018. I am sure they will cap their production (or at least their factory is not ready for full production yet).

This car is for mass market, there is no issue with attracting too many people. There is no problem with have a lot of reservation. It is actually good for Tesla imo. It shows that there are many interest in M3. Good for press as well.

Also, people already expect to wait for a long time to get their M3, so buyers won't get frustrated.

Haggy | 1 aprile 2016

As it is, there are probably people who will pay off the thousand dollars in installments who typically use their trade in to afford a down payment and then take out a loan. Having $3000 cash is a lot to ask from most people and goes against the notion of having an affordable car.

georgehawley.fl.us | 1 aprile 2016

Some people don't get it. Lots of reservations demonstrate demand for the Model ≡ that validates Elon's premise that it will be a high volume car. This supports the need for the Gigafactory and all that entails. With this credibility added to the successes of the S and now the X TSLA value will seem less speculative. Buoying the value of the stock enables Tesla to raise capital inexpensively without excessive dilution or added debt burden. The added capital pays for the creation of multiple robotic production lines for the M≡ and the buildout of the Gigafactory. The resulting volume capacity makes the gathering of a large number of reservations a self-fulfilling prophecy.

Bluesday Afternoon | 1 aprile 2016

Don't be naive, Tesla has/had a "best case " plan! It just needs a little tweaking, now. 8-)

JeffreyR | 1 aprile 2016

@georgehawley +1
Could not say it better myself. I thought they would use around half the Model S reservation and round down, so $2K. But, by putting the number at $1K, lots of people said, what the heck and just reserved. A second Gigafactory and a second assembly plant just became that much easier for Elon to get capital for. The folks in line around me (yes, my R# already shows in MyTesla!) said they've been waiting for the affordable Tesla for years. Elon tweeted 232K reservations 23 minutes ago (7:27 PM Pacific).
The numbers are tailing off as people realize that they are well over a year away even w/ a reservation. But, you figure this weekend will be the last big burst before The Unveiling Part 2.

Ross1 | 1 aprile 2016

Shows the power of (not) advertising

Red Sage ca us | 5 aprile 2016

MarlonBrown: You build a wall one brick at a time. Not 30,000 at once. Elon is building something here, piece by piece, brick by brick, not depositing a steaming pile.

President georgehawley: +1! Did I mention...? U-DA-MAN!!!

TaoJones | 5 aprile 2016

As one who did make that 100K prediction, I wouldn't worry even if reservations top 700,000 before production. People have waited years for a car already, and whether they are 30,000th or 300,000th, they're still ahead of somebody.

Besides - what else are they going to buy - a nuts and Bolt? Good luck with that - the nuts and Bolt is supply-constrained to 30,000/year per their own admission.

No harm in securing a place in line. At moderate to full capacity, Fremont will work through a 700,000 reservation backlog in 3 years - and it won't even have to, since by then there will be factories online in, one presumes, Europe and China. Not assembly plants - but factories. And another gigafactory somewhere.

All of this will be constrained by pesky details such as cash flow and gremlins, but the point remains - as long as people realize that they're going to wait years for a car, but fewer years than the people who haven't yet signed up, all will be well.

And if they disperse to some degree to buy a nuts and Bolt or similar, then that's fine. They'll be back.

yongliangzhu68 | 6 aprile 2016

It is now looking like the relatively small $1,000 was a stroke of genius.

-Tesla gets $300,000,000 interest free.
-Tesla gets iPhone lines of people that covers the news cycle with a B$ worth of free advertising.
-Tesla now has leverage to acquire financing with $10B orders on the books
-Tesla is now a bonafide car manufacture and no longer an eccentric niche.

jordanrichard | 6 aprile 2016

JeffreyR, where did you get that the reservation numbers were tailing off? Also, did you interview those not reserving to ascertain for a fact it is because they don't want to wait that long for their car?

Elon will be giving one last tally count tonight to give a 1 week's total. Obviously at some point the rate of reservations will trail off, but that is only a problem that every single company wish they had.

staze | 6 aprile 2016

@wj, all great points - especially the financing bit. Most major lending firms will be more comfortable in providing Tesla capital to ramp up production with $10B in orders on hand. Tesla needs money to build out the GF and Fremont. If it wants to be a global player and supply those markets with several hundred thousand more cars it will need an international factory (see the France factory article today). That all requires real cash supported by loans. Pulling the potential customers out of the woodworks democrats more than any boardroom powerpoint presentation that this company has the right product and people are getting in line YEARS ahead of release without even seeing it to buy. In fact, I can't recall a more mass market product at this high of a price point which had folks willing to purchase based on short webcast. Great company. I just wish I had more money to invest in it.

JeffreyR | 6 aprile 2016

@jordanrichard

From the fact that the numbers of reservations started to slow down over time. It's natural as the advantage of getting in line became less pronounced. I am not saying that people canceled or that the number of reservations has dropped. I am saying that after the first-day frenzy there is a natural decrease in the number of reservations per hour.

Someone posted a line graph, let me see if I can find it for you... "model 3 reservations graph"... now let's see if Mollum will let me post any results (nope Mollom is blocking; maybe just images; nope, looks like you'll need to look them up yourself):

electrek: Tesla has now over 276,000 Model 3 reservations – timeline of reservation updates

TMC: @Nomad - Chart for Model 3 reservations — cumulative and hourly

jordanrichard | 6 aprile 2016

JeffreyR, oh, ok. I miss understood where you were coming from.

carlk | 6 aprile 2016

Most reservation holders probably wouldn't mind to chip in another $2K reservation fee toward working capital for Tesla to accelerate the ramp up. The small amount of lost interests in nothing compares to longer wait time.