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Model 3 Reservation Lines Already Forming at Tesla Motors Stores (TSLA)

Tesla Motors Inc (TSLA) Model 3 Logo

Tesla Motors Inc has learned a few things from the Apple Inc. playbook and Tesla’s cars are sometimes referred to as iPhones on wheels. Tesla borrowed the concept of integrating software and hardware into single seamless product from Apple and you’ll be hard pressed to find where automotive tech ends and software begins in a Tesla EV. The company also borrowed the idea of controlling the customer experience from Apple; hence, the Tesla stores and showrooms that sells cars in malls and update their cars via over the air software updates.

Tesla Motors Inc (TSLA) Model 3 Logo
Tesla Model 3 Logo

Tesla’s will try out a modified version of something else Apple is know for on Thursday when the firm opens the doors of its stores to start taking reservation deposits for the mass market Model 3. Stores are generally located in big city malls although many are free-standing. It is expected that many will be very, very busy on Thursday.  All stores will open at 10:00am local time.

The Model 3 is a “yet to be seen” EV with a price tag of $35,000 before tax incentives and a 200 miles range. The Model 3 is almost here and it would be interesting to see how buyers react to an opportunity to claim bragging rights to the first set of Model 3 preorders.

The queue for the Model 3 is starting in Australia already

Apple is used to seeing crowds of people lining up in front of its stores to purchase iPhones. Mashable reports that an Australian man, Andreas Stephen has already picked the first position in line at the firm’s store in St. Leonard Sydney.  Stephens who arrived at the dealership about 7AM (AEDT) this morning has initiated the queue to preorder the Model 3 – a good 48 hours before the reservation begins officially.

Australians will be able to make reservations for the Model 3 ahead of everyone else globally because of their time zone – of course; global online preorders will begin much later. However, if past action at Apple stores is indicative of what to expect at Tesla stores, many folks will prefer to camp out in front of a store in order to make an in-person deposit, meet other EV enthusiasts, and ask questions of staff.

Camping out in front of a Tesla store or being the first to place an order doesn’t necessarily mean you’ll be the first person to take delivery of a Model 3 in late 2017. Tesla Motors has revealed that it would prioritize deliveries to current owners and buyers who order the full options with the higher price tag. In addition, Tesla has stated that deliveries will begin on the US west coast and work their way east from there. There is still much confusion regarding the actual delivery plans.

What can the long queue do for Tesla Motors?

A massive turnout for the Model 3 could provide the company with a decent moneybag. If analysts are right and Tesla gets 50,000 preorders, the firm could quickly have access to $50M in cash. If the queue of potential buyers of the Model 3 takes up epic proportions, Tesla will attract other undecided buyers who will be influenced by the herd mentality. Nonetheless, the firm needs to ensure that the crowd does not turn rowdy so that it doesn’t give auto dealers more reasons to shout that Tesla doesn’t have any business selling cars.

Massive turnout for the Model 3 could also provide a boost for the company’s stock. Tesla Motors was down almost 2% at a point this morning and it is down 5% in the year-to-date period. A better-than-expected welcome for the Model 3 will show investors that the mass-market EV will help Tesla reach profitability at a faster pace; hence, they will be more willing to buy more shares in the stock.

However, Tesla might become a butt of jokes and its stock could face downward pressure if the turnout of people at its stores fails to impress. Irrespective of the volume of online orders that the firm has, Wall Street will be more interested in seeing the number of people that go out of their way to show up in person.

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Victor Alagbe is a seasoned business and finance writer with a specialty in writing about how to invest for the long-term in healthcare, pharmacology, energy and tech stocks. His long-term focus is on stocks that provide a nice mix of growth and income. For the short term, he passionately writes about trading stock options for the excitement and leverage that stock options offer.