Tesla: 1 in 4 Model 3 orders are cancelled, says Needham & Co
Although Elon Musk has finally managed to pull through and reach the production goals, refunds are issued more often than new orders are placed, a new analysis says.
The electric sedan is currently being produced in two adjacently located factories at Fremont, California. The second production line is located under a tent; it was put together in late May to help the Californian automaker reach its goal of delivering 5,000 Model 3 units per week. Since last May, according to Tesla, the Model 3 is the best selling mid-sized premium sedan in the USA.
But an analyst note to the investors of the prestigious investment bank, Needham & Company, suggests that a whooping 24% of the Model 3 orders have been cancelled. The note, prepared by the bank's analyst, Rajvindra Gill, was discovered by CNN Money. The note does not stop there: it also informs the investors of Model S and Model X's "lacklustre performance" and suggests that, in order for Tesla to reach the goal of 100,000 Model 3 deliveries by the end of the year, it would have to deliver 27% more vehicles than it did in the first half of 2018.
Tesla did not take kindly to the analyst's allegations: Elon Musk swiftly responded on Twitter, by citing the net orders figures for both Model S / Model X and the Model 3.
As previously noted, one of the main premises of the analyst note is that Tesla will be unable to deliver 100,000 Model 3 vehicles unless they increase their deliveries over the latter half of the year by 27%. The interesting part is that, even if we dismiss Elon Musk's recent claims about delivering 5,000 units/week as false, Bloomberg's estimates of Model 3 production have shown a fourfold increase of production since last February. Accordingly, it would not be outrageous to expect Tesla to deliver the expected 27% increase in deliveries over the second half of 2018. Frankly, I could see Tesla delivering even higher increase in deliveries over the latter half of the year. Furthermore, as Fred Lambert of Electrek astutely points out, it has been some time since Tesla opened Model 3 orders to the general public, and orders are still flowing in - thus, demand should not be an issue either.