The Tesla Model 3 was revealed in March 2016 and as of May 15, Tesla confirmed with its Security Exchange Commission filing, that there are a total of 373,000 deposit-backed reservations for their new affordable, entry-level sedan. This net number is after Tesla shared details of about 8,000 customer cancellations and 4,200 reservations Tesla chose to cancel “on the belief they could have been duplicates from speculators.”
Still, this large remaining volume of reservations signifies that there is both a massive customer demand for their electric vehicles and consumer confidence in the company’s ability to deliver. Because of the significant demand Tesla has seen, the company has decided to advance their plans to build 500,000 total vehicles (combined volume for Model S, Model X, and Model 3) by 2018, two years earlier than initially planned. Tesla’s SEC filing to raise additional capital is part of their accelerated roadmap plans to help produce these new orders. The automaker has stated it is still on track for volume production and deliveries of Model 3s with as many 200,000 deliveries to be possibly completed in late 2017.
The Tesla Model 3 comes to market with a starting price of $35,000, making it the most affordable Tesla vehicle yet. This is approximately half the price of their luxury Model S electric vehicle. The high volume of reservations suggest the lower, more affordable price point has resonated with a much larger customer base. And because Tesla has invested heavily in providing a strategic infrastructure network of charging stations and superchargers across the U.S., consumers are seeing that an electric vehicle is a viable alternative to a traditional transportation vehicle.
Because Model 3 vehicles have not been produced for a customer to simply drive off a dealer lot and take home, orders for Model 3s are reserved by customers with a $1,000 deposit. This can be done at a Tesla dealership or via their online transaction site via credit card, direct checking account debit, or PayPal (also founded Tesla Motors CEO, Elon Musk). Currently there is a limit of two reservations per person.
Ordering a model of any other Tesla vehicle works much the same way as any other online shopping transaction. You can choose your options online and have it built to your specifications. After which you enter your contact information and indicate a preferred delivery timing, though delivery timing is not guaranteed for Tesla customers given their large production log. A $2,500 order payment is required as well.
Tesla continues to shake up the automotive industry with both unique design, applicable range and performance, while still providing a premium sedan that is still reasonably priced for many consumers. As Tesla further innovates and produces their vehicles, there is question as to what the future will hold for other electric vehicles such the Chevy Volt and Nissan Leaf. While both those vehicles are already priced for the average consumer, we can expect competition with the Model 3 to have a measurable impact on their profitability and sales.