When Tesla Model 3 preorders opened, hundreds of thousands of Tesla fans put down a deposit and got ready for the long wait for delivery. This generated a huge amount of cash for the company, but now things are going in the wrong direction as Tesla is refunding a large number of those initial deposits.
Those who wanted to be among the first to get behind the wheel of the Model 3 plunked down $1,000 for the privilege. It’s a given with Tesla that whatever the predicted timeframe is for delivering a car, the reality will stretch out that time quite a bit. Most people know this and are prepared for a long wait, but an analysis by Second Measure shows that nearly 23 percent of those deposits have been refunded.
Those waiting the longest are the folks who simply want the base trim, which is priced at $35,000. It’s been over two years since the first deposits were taken and now those waiting on the base trim are being told they’ll have to wait a bit longer. The numbers show that not everyone is willing to simply continue waiting.
Tesla’s policy makes deposits fully refundable up until customers configure their cars and pay an additional $2,500. Once that happens, delivery is usually within a matter of weeks, so anyone who gets to that point without cancelling is probably going to continue waiting it out.
Demand started strong with 61 percent of reservations happening within the first month. They’ve since tapered off as the excitement over this affordable electric vehicle waned at the though of waiting for months to get one.
The gravity of the situation is made more clear if you look at what’s been happening in 2018. So far, Tesla has issued twice as many refunds as it has received deposits. Given that a third of Tesla’s cash on hand is customer deposits, this could be a problem.
And that’s only the number of people who have actually received a refund. It takes time for the company to process requests and Tesla hasn’t revealed how many people have asked for a refund and are waiting for it to be processed.
On the upside, the number of customers getting to the configuration process is going up, but not always for the Model 3. Instead, some are giving up and opting for the more expensive Model S or Model X, which could make the whole thing still work out in Tesla’s favor.