At the end of March 2016, Tesla began taking pre-orders on its Model 3. Response was so positive that within a few weeks, 373,000 consumers had forked over the $1,000 deposit required to reserve their copy of what would be the most affordable Tesla yet produced.
Over time, however, the widely reported production delays and worrying news regarding quality of construction issues have, it seems, frittered away the enthusiasm of many potential buyers.
Financial data analysis firm Second Measure has determined that 23% of reservations made for the model have since been cancelled. To obtain its results, the company collected available credit and debit card information. It noted that the month of April 2018 saw the rate of refund requests reach its highest level yet. Not coincidentally, this was the same month that production of the Model 3 was temporarily halted by Tesla.
A spokesperson for Tesla stated that the company’s internal data did not match that advanced by Second Measure. He refused however to detail what that internal data was, or whether it was close to what the data firm found in its analysis.
Hard for us to know which numbers are accurate, but it’s worth remembering a prediction previously formulated by Second Measure. Last year, the firm stated that 12% of orders for the Model 3 had ended in cancellation – a number later confirmed by Tesla boss Elon Musk.
While the cancellation rate might seem worryingly high, it might not be quite so distressing; certainly it has not caused any panic at Tesla HQ. It's true that the company has had its issues maintaining the desired rate of production of 5,000 units per week, a target it wanted to reach starting in 2017. The delays that resulted from this have certainly led some car buyers to give up and go elsewhere. But what’s to say many of these consumers won’t come back to the fold once Tesla shows it can maintain that production rate?
There’s also more competition for eco-friendly-mobility money than there was two years ago. The Chevrolet Bolt, for example, has most certainly stolen some of Tesla’s Model 3 thunder.
The most important thing to watch in the coming months may be whether the cancellation rate continues at its current level, abates or grows. If Tesla succeeds in maintaining its target production rare, chances are that 23% rate will drop. If not, it could just as easily climb.
Then the worrying could really begin over at Tesla. But we’re not there yet…