[aphextron]

> To sell that many $35,000 sedans in the U.S. “would be absolutely unprecedented based on what we know about car markets today and how people spend their dollars,” said Salim Morsy, electric car analyst at Bloomberg New Energy Finance. “It could happen. I’m pretty sure it won’t.”

Model 3's will sell literally as fast as Tesla can push them off the production line. The pent up demand for this thing is insane. Over 400,000 people have already paid $1000 deposits on their cars.

The only thing that could possibly stop Tesla is their own inability to deliver.

[hueving]

Or withdrawals from people. The deposits are non-committal so people can cancel without losing anything.

[flexie]

I can't think of any product I'd rather have than a Tesla.

I think Tesla will sell millions of Model 3. Which other car is 400,000 people waiting patiently to buy for two years, even putting down a $1,000 deposit?

Tesla is doing to traditional car manufacturers what Apple did to Nokia.

[radiorental]

> Tesla is doing to traditional car manufacturers what Apple did to Nokia.

Sincerely, and with all due respect, this is a false analogy.

What happened to Nokia was pretty much self inflicted. Mismanagement, competing empires, complacency.

Apple did not start shipping low end brick phones and eat Nokia's market.

Post '08 bailout automotive manufacturers are lean and hungry (for the most part)

Furthermore, the 'traditional' car market, while slow to move, is not far behind. And in some cases is taking a longer view. E.g. Ford is going straight to Level 4 in 2022. Forget the ICE v. electric debate, that ship has sailed and everyone is heading to EV. The real battle will be to produce the safest self driving product.

I am long on TSLA, I expect them to do well however they are in a far riskier spot than Apple was when the iPhone dropped. They were healthy, profitable and experienced (+Jobs). TSLA is none of those.

I'm not disagreeing with your sentiment. I just thought we were past the Apple analogies.

[jaimex2]

I dont know...

Tesla is currently training their driving AI using the existing fleet in shadow mode. How do you skip this step and go straight to level 4? They need months of tuning outside a lab, worldwide.

A lot of car manufacturers still refuse to build an EV from the ground up. They are reusing an ICE platform and converting them to EVs.

Mazda don't even acknowledge that they need to build EVs. https://electrek.co/2017/03/07/mazda-no-pressure-from-custom...

heh, I'm sorry. Musk is still alive and surpassed Jobs long ago now, he's up to his 5th disruptive successful company. Online Payment, Cars, Space, Solar roofs and AI beat shiny laptop and smartphone.

[radiorental]

I see car companies getting off the shelf solutions from companies like Nvidia, which is what is being trained in Tesla's today. And Nvidia have their own demo. I genuinely wonder who owns the algorithm...

It actually makes sense to jump to level 4 from both a liability & design/platform perspective.

The fact that Tesla is bleeding through the first few stages with driver-in-the-loop doesn't necessarily mean they get to maintain a competitive advantage long term.

(Also, Mazda is a 2nd tier manufacturer, little resources, mostly Ford parts Inc drivetrain, engine and firmware)

Finally, I appreciate the Musk fandom. As someone with a little skin in TSLA, I aim to take an objective view fwiw.

[pmorici]

That is no longer true with respect to Mazda.

[kayoone]

The german manufactures are not asleep at the wheel, get into the newest E-Class and despite it being a lot cheaper than a Model S, the self driving capabilities are impressive. Don't even let me start on the interieur quality, which is my biggest gripe with Tesla considering their price segment.

[vsl]

"Impressive" is not the word I'd use. If you didn't drive Model S, perhaps. Otherwise, meh.

http://www.thedrive.com/tech/4591/the-war-for-autonomous-dri...

[Tepix]

I agree. However they are still behind with regards to cars that are designed from the ground up to be electric.

[Retric]

Car companies are selling bricks. In large part because of the used car market no company makes reliable and cheap because the cost conscious don't buy new cars.

Further, the dealer model forces high markups, heavy advertising, etc to attract the kind of people that buy new cars.

[AOsborn]

Fair opinion, but I think you are arguing the wrong point.

Apple ate market share from Nokia because of brand advantage.

Many commentators mention that manufacturers are improving their EV product, but I think that boat has long sailed: Tesla vs. Ford won't be about features, but the brand.

[radiorental]

Sorry, when the product is north of 30K, you'll find a significant number of people will put what they can afford ahead of brand loyalty.

[ethbro]

Lots of people really love Ford.

And with an EV, there won't be that awkward moment when their friends ask how their transmission is doing...

[NeutronBoy]

> Which other car is 400,000 people waiting patiently to buy for two years, even putting down a $1,000 deposit?

None, but I would hazard a guess that's because if you want to buy a BMW, a Mercedes or an Audi, you don't need to. You can simply go and buy one!

[jkchu]

But the closest thing to a $35k electric car from BMW, Mercedes, or Audi is BMW's i3 - which I think is targeting a different market.

[NeutronBoy]

Agreed, but it's not about the brand - it's just that in the market segment for a $35-40k mid-size sedan, there's not a whole lot of need to wait two years for a car, which is why it's so uncommon. The reason it doesn't happen to other manufacturers, is because although they have 3-4 year lead times on new models they produce, they're still continuously producing the current models

[bkanber]

Don't forget about two car households. We have an x1 and an i3 as our commuter car. The i3 will eventually be replaced with a Tesla, the x1 will not.

[ryanmonroe]

Mercedes has the $40k B-Class electric car.

[cjrp]

With a 124 mile range [http://www.mercedes-benz.co.uk/content/unitedkingdom/mpc/mpc...].

[coryfklein]

How about retiring 2-5 years early? That's about what you get if you invest the $35k instead...

[Pxtl]

https://xkcd.com/947/

[alister]

Here's another illustration of how our intuition about compound interest can be really wrong:

Futurama scene where Fry has been transported to the year 3000 and he still has his ATM card: The bank teller checks Fry's bank balance. She says, "You had 93 cents in your account in 2000. With an average interest rate of 2.25% compounded for 1000 years . . . that brings your balance to $4.3 billion dollars."

The math is correct. Plug those numbers into the compound interest formula, Pn = P0 (1 + r/100)^n, and you really do get $4.3 billion.

Your gut feeling is that even with 93 cents, you could retire rich. Not a billionaire, but comfy. It ain't so. In 50 years, you'd have $2.83. And even that $2 gain would be wiped out by a single monthly banking fee :-).

In 400 years, $6820. My intuition told me that I should be in the millions by then. Wasn't even close. Didn't even account for taxes and inflation.

[misja111]

Another thing that many people forget is that while compound interest gives you more money, at the same time inflation makes your money worth less. So what you should really be looking at is the difference between the inflation and the interest rate: the so called 'real interest rate'. Currently in the US, that rate is negative ..

[bkanber]

Ten years is short. Thirty years at 6% gives you $200k, for instance.

[Ntrails]

what? Not on $1k it doesn't.

1.06^30 is like 5.5 ish? Unless you mean on saving 1k pa which is not what they are talking about, and means you're very much changing the game (and apparently not derisking towards retirement)

[thrillgore]

My life priorities will be different when i'm 59.5 years old compared to now.

[antisthenes]

I'm with you 100%.

If my basic needs like housing and healthcare were already met (unfortunately they aren't), my next purchase would probably be a Tesla or a Solar/Powerwall combo for the house, or both.

[jordache]

you do realize market forces for a $600 consumer device is very different than a durable good that costs 50x more?

Your anecdotal insight into how desirable the tesla is to you means nothing in terms of the market

[Matt3o12_]

Well, they lost access to $1,000 until they cancel (plus 3-6 weeks, since it can allegedly take Tesla this long to refund the money).

I don't think 400,000 have just $1,000 to spare for a really anything they will just cancel. The $1,000 mean that the person who reserved it really wanted the car and is unlikely to just refund it unless they have a very good reason to do so.

[slg]

I think the commitment of $1000 is overblown. What is the actual opportunity cost here? Maybe $50-$150 depending on the interest rate and time frame you want to use for your estimates. That is nothing in the scale of a car purchase and it buys you the right to receive the car several months quicker. Relatively speaking it is like someone paying $10 to have a new laptop shipped to them overnight instead of by ground except the shipping has been prepurchased a year before the laptop.

If you aren't the type of person who can find a spare $1000, you also probably shouldn't be the type of person who spends $30,000 on a car.

[MarkMc]

You are missing the psychological element. In general, people:

(a) Feel a strong obligation to be consistent with past behaviour - not just in placing the deposit, but then thinking and reading about the new car design and wanting a Tesla for months or years.

(b) Want to avoid admitting the 'mistake' of giving Tesla a free loan. Not just admitting the mistake to themselves, but also to all their friends they told about their deposit.

(c) Hate giving up something they 'own' - ie. their place in the queue

(d) Value something that's scarce more than something that's easily available

(e) Are more likely to want something that other people love and are queueing up to buy.

[MarkMc]

Thinking about this a bit more, Musk should run a split test: Half the people queued for a Model 3 are offered $100 to move to the back of the queue. People who decline such an offer will feel compelled to buy the car when it is released in order to be consistent with their previous actions. I'm confident this would boost sales, but the split test would tell us for sure.

[rco8786]

I think you vastly underestimate how much demand is represented by 400,000 people willing to part with $1k before a product even exists. Refundable or not.

[slg]

I am not questioning the demand. I am questioning the commitment of people who put down a refundable deposit on a product they had very little information about. I am one of those people who threw down my $1000 before any of the presentations. I am still not sure whether I will purchase one. My interest has actually waned with recent leaks like the complete lack of any dashboard readouts. However I am still perfectly fine with Tesla keeping my deposit until I make a final decision. The opportunity costs of that extra $50-$150 is worth a lot less to me than the chance of securing a Tesla quickly if a do make the purchase (not to mention it increases my odds of a full federal tax rebate). I can't imagine I am the only one of the 400,000 with that mindset.

[dtparr]

You're not the only one. I'm nearly identical. Losing access to $1k for a year or two (with the ability to get it back within a few weeks) is completely a non-factor, and since it increases my chance of a $7500 rebate, seems like a pretty good investment, actually.

Also, same feeling of 'meh' based on leaks so far. I was really hoping for a scaled down S with fewer amenities, lower performance, etc. rather than something from scratch. The no dashboard instrument cluster thing bugs me, as does the fact that AWD won't be available initially (hurting the chances of the rebate if I want AWD), but I'll wait until at least the final reveal if not later to make my decision.

[elihu]

The sort of people who would consider buying an expensive sedan can probably afford to loan Tesla $1000 for a year or so.

I reserved a Model 3 because I figured that if I didn't, I would be at the end of a very long waiting list and would probably lose out on the federal rebate. The most likely outcome is that I'll decide that's too much to spend on a car and cancel, but it still made sense to me to keep my options open.

I expect a lot of those reservations to be converted to actual sales, but a lot of them won't. In any case, I think Tesla will have plenty of demand if the product meets expectations.

[Matt3o12_]

Fair enough but there are many foreigners who do not have a tax credit and still made a reservation.

[manquer]

You could always sell it immediately.. you would probably get even a slightly higher price than you paid by impatient people

[_ph_]

A $1000 deposit is a significant commitment to ordering the car, even if it is fully refundable. Very few people would do this until they are basically decided on buying this. For everyone who would reconsider, there are for certain plenty of people, who are interested in the car but would not put down money without a test drive first. So, judging from the deposits, I would rather assume the actual list of interested buyers way exceeds the amount of people who put money down.

[an_account]

I disagree. I put down the deposit because I wanted to reserve my spot in line. Putting down $1k now isn't that much if it might save me $8K in tax credits by having an earlier spot in line.

I still haven't figured out if I can get a charger in my apartment building. I haven't decided I like the look of the car. I haven't even decided I want a sedan.

I love Tesla, so on the chance that I do want the car I put down the deposit. But I'm still 50/50 on actually buying it. I imagine many are in a similar positions.

[agumonkey]

Curious, did Tesla published updated stats ? or anyone else for that matter. The announcement numbers were way above expectations, but it's not much if half of that evaporated after the hype.

[greglindahl]

Apparently Tesla has not published an update. This article https://www.fool.com/investing/2017/03/14/teslas-model-3-res... guesses that the number hasn't changed much, due to the "Customer Deposits" line on Tesla's quarterly balance sheet.

[wfunction]

> Or withdrawals from people. The deposits are non-committal so people can cancel without losing anything.

I feel this is going to be the killer for them.

[MattRix]

Sure, there will be tons of people who cancel... but then there will also be tons of people who wanted to wait until the car was fully finished before signing up to get one. They'll be fine.

[harichinnan]

This is the car version iphone, with people queuing up at the store days before the product is seen. I would believe they would stop production exactly at 400K cars, the current waiting list and start a new Model 4 waiting list. They have an air of exclusivity now with their current models. People still gawk at the sight of a Tesla. They would want to maintain that awe factor with Model 3 as well.

[TheSmiddy]

You're assuming a pure profit motive. Literally everything Elon Musk is doing has a strong element of trying to save the world.

The goal of Tesla is to make every new car sold electric, if they have to command 100% of the market they will do that, but they'd rather there be some competition.

[MegaButts]

> Literally everything Elon Musk is doing has a strong element of trying to save the world.

Maybe. Or maybe he's just saying that to make money. If Elon Musk ends up being completely successful in all of his endeavors, he will be the world's richest person by far.

I suspect the truth is in the middle. He does want to change the world, but he's not willing to become poor (let's say a net worth of less than a million dollars) in the process.

I have no problem with people getting rich, especially if they've earned it. But I see Elon Musk as a salesman more than anything, and he's damn good at it. He has generated a cult following of people who believe he is doing everything possible to save the planet.

I am very skeptical that Elon Musk is half as great as he's made out to be on certain internet forums. I do not mean to say he is not an incredibly accomplished person, only to say that he does not live up to his self-generated hype.

Of course time will tell. I truly hope he is as great as people make him out to be. But I just don't see it. Hopefully he makes me into a believer by delivering on all his promises.

[harichinnan]

Unless Musk gives away much of his wealth in his lifetime, he could very well be the world's first trillionaire. Think of Toyota and Exxon Mobil rolled into one with virtually no competition in sight.

To put things in perspective, this car is just 10 grand more than a full featured Toyota Camry. In countries that import both cars and oil like India, the price of the Tesla would be less than a Camry if they reduce the import tariffs. It's a foreseeable option to reduce foreign oil dependency. Also in developing countries, for every person that can afford to buy a Tesla and also knows how to drive, there would be dozens more who can't drive but could very well afford one. Once Tesla delivers their first 400K cars and proves they can drive themselves anywhere in the world, the demand would far exceed supply in the foreseeable future.

[tuna-piano]

I would assume that a company investing billions would try very hard to make accurate sales estimates.

I would be surprised if Tesla isn't surveying random people on the list, asking questions about their planned purchase and making estimates on the % that will end up cancelling.

[wfunction]

> I would be surprised if Tesla isn't surveying random people on the list, asking questions about their planned purchase and making estimates on the % that will end up cancelling.

I hope this would give an accurate result. People might say one thing and do something else when they have to actually shell out the money...

[philmcc]

I disagree. The backlog will be so long, that there will almost certainly be someone who will pay for your spot in line.

The same thing happened with the S and the X. "Flipping" a 3 won't be difficult.

[Tepix]

That will be a good reason why people who choose not to buy a Model 3 for themselves will not cancel their preorder and sell it instead.

[mpclark]

Is there a secondary market for places in the line?

[ryanmarsh]

I can't remember a product that sold 400,000 preorders (many of which were sight unseen) with a $1,000 deposit in my lifetime. I think anyone trying to downplay the demand isn't looking at it in the right context.