Tesla Says New Model 3 Reservations Won’t Arrive for Close to 2 Years
If you plan on making a reservation for one of Tesla’s upcoming $35,000 electric cars, the Model 3, expect to wait almost two years—and maybe longer at this point.
The electric car company run by Elon Musk, which is in the process of acquiring solar company SolarCity, updated its website to say that production of the Model 3 will begin in mid-2017 and that delivery estimates for new Model 3 reservations are now “mid 2018 or later.” Tesla is hoping to ship its very first cars to early customers by the end of 2017.
Earlier this year, Tesla (TSLA) opened up reservations for its Model 3, the company’s first mainstream electric car that can drive 215 miles per battery charge and costs $35,000. Tesla’s other cars commonly cost six figures depending on the model and features.
The demand for those first Model 3 cars has been huge, and almost 400,000 people put down a $1,000 refundable deposit to get in line for one. Some customers even camped out over night in front of stores to get at the beginning of the queue.
But because Tesla has only been making its current cars in smaller volumes, the company needs to build out its production capacity to be able to meet such high demand. Tesla delivered about 50,000 cars in 2015 and plans to deliver about 80,000 in 2016.
But by 2018, Tesla intends to grow its manufacturing capabilities to be able to make 500,000 cars per year. Many of those are supposed to be Tesla’s Model 3. The time that Tesla needs to grow its production capacity and to start shipping cars is the reason for the lag time.
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But everyone expected as much. Fortune noted that as the reservation list starting growing earlier this year, new reservation holders might not get their cars for even three or four years. Pushing the date out also could mean that a customer might miss out on a federal tax credit that expires after Tesla sells 200,000 cars.
Tesla could ship 76,860 Model 3 cars by the end of 2018, according to analysts at Cairn Energy Research Advisors. That includes 12,200 shipped within the year of 2017, and 64,660 shipped within 2018. Tesla could ship 212,646 Model 3 cars (that’s cumulative) by the end of 2019.
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Assuming all of the Model 3 reservations convert into buyers (which they won’t), you’d need to have a reservation number lower than 76,860—the predicted total to be shipped by the end of 2018—to get one before the end of that year. And you’d need to be on the reservation list under 212,646 to get a car in 2019. (Again, not all reservation holders will convert).
After Tesla sells 200,000 cars, it’s set to lose a $7,500 federal tax credit for its customers. So if you fail to get your car in 2018, the Model 3 could be more expensive without the credit.