Tesla Motors Inc , initially has been quite vocal when it comes to giving data about Model 3 reservations, but the data is missing from the news recently. May was the last time, when the EV maker spoke about the Model 3 reservations. But, since then there has been no updates, leading us to believe something is fishy.
Tesla CTO revealed what should not have been
Back in May, the US-based car maker revealed that it had 373,000 net reservations for the Model 3, significantly lower from its proclamations of “almost 400,000” the month earlier. However, since then, no one has heard the automaker giving the data of Model 3 reservations again. With the EV maker, it can only mean that revealing the present number would not further the official story, says a report from Seeking Alpha from Paulo Santos.
However, there has been some hint on the number recently, not from the CEO though. Tesla CEO – Elon Musk – seems very good at handling the message, but others are not nearly as proficient. JB Straubel, Tesla’s CTO, while speaking to WDR5 (Germany) radio station, finally, told what everyone was waiting to listen.
Straubel stated that they have over 325,000 reservations for the Model 3. This is a lot lower than May’s 373,000. This suggests, Tesla Motors Inc – over a three-month period – saw reservations for the Model 3 drop by nearly 50,000, noted Santos. Clearly, this is a very material number as the electric car maker is trading on the Model 3 story since everything else is not doing as well as expected. “But again and as always with Tesla, what’s material is in the eye of the beholder, and for TSLA, any negative development never seems to reach the “materiality” threshold,” says Santos.
Something else that sort of confirms this is that the NY Times – in a story one week initially claimed that Tesla had 315,000 reservations for the Model 3. Later, this was revised/corrected to the May number, 373,000.
Model 3 reservations witnessing a decline curve
What could this mean? Probably the article is right on the present number of preorders for the Model 3 is 315,000, not 373,000. And, it is also roughly consistent with the drop rate trend, says Santos. For example, the number of preorders was almost 400,000 on April 15. Then on May 15, the number of preorders for Model 3 was 373,000 (down roughly 20,000-25,000 in one month).
Assuming Straubel was talking about the quarter-end, the preorders dropped to 330,000 (he said over 325,000) on June 30. This corresponds to a constant drop rate of 28,000 per month. It was then 315,000 on July 24. Another 19,000/month decline rate or about 15,000 less over 24 days, says Santos.
In other words, the figures represent a “decline curve” for the Model 3 reservations. What’s interesting to note is: Tesla Motors Inc is not very forthcoming when it comes to sharing this material development to the market. “It was able to withdraw mention of it on the NY Times, no such thing can be done to a radio transmission.”