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Is the deposit actually really refundable? Or exchangeable?

Is the deposit actually really refundable? Or exchangeable?

If the deposit is refundable then the cash received as deposits may have to sit untouched in a trust account.

One snippet I have picked up is that the $1000 can be changed to a deposit on X or S.
That being the case,the deposits are not refundable and can be used for whatever they like.

They are going to need huge cash injection now

meade.shan | 1 april 2016

Tesla's reservation fees are refundable. and always have been refundable.

Bighorn | 1 april 2016

Contract says funds will not be held in escrow or trust. What is the point of poor hypotheticals?

bcfireworks | 1 april 2016

My reading of the terms and conditions of the deposit was that the deposited funds were NOT going to be held in escrow or a trust fund. I took that to mean the TM can use the funds however they wish. If the go bankrupt or shutdown, you could lose your deposit. I don't think that is very likely in the timeframe that I would expect to take delivery of a vehicle.

inconel | 1 april 2016

Even if we assume a very high probability of default of 10% over the 2Y period to be conservative, the expected loss is then only $100...

Ross1 | 1 april 2016

then in hindsight they should have gone for a higher deposit, getting a more realistic view of how serious the orders are.
The amount of cash injection would be the same if they got half the orders and twice the deposit.

emilykemme | 1 april 2016

A higher deposit could have resulted in a greater cash injection but the goal of an affordable car would have been missed.

mkamran | 1 april 2016

I think the goal here was to 'show' the future potential of the company to its stakeholders. 200,000 orders translate into minimum potential sales of $7 billion in foreseeable future, the very reason tesla's stock was up by 3.4% today. If model 3 is a success, the stock price will further grow, and company can easily get more cash injection by issuing more stocks at increased price!

mkamran | 1 april 2016

I think the goal here was to 'show' the future potential of the company to its stakeholders. 200,000 orders translate into minimum potential sales of $7 billion in foreseeable future, the very reason tesla's stock was up by 3.4% today. If model 3 is a success, the stock price will further grow, and company can easily get more cash injection by issuing more stocks at increased price!

raging.dragonfly | 1 april 2016

As @meade.shan said above, tesla's reservation deposits are, and always have been, 100% refundable. You can cancel your reservation & get a full refund right up until your order is placed.

Ross1 | 1 april 2016

Lot of new posters coming out of the woodwork, with Model 3