Tesla is booking a total of around 1,800 Model 3 net reservations per day since it held an event last Friday to handover its first Model 3 production cars to employees who pre-ordered the vehicle, the company revealed in its earnings letter for Q2 2017. That’s a very impressive clip for new orders, especially given that the company already has a large backlog, according to Tesla CEO Elon Musk.
The Model 3 is designed to provide Tesla with gross margins “comparable to Model S and Model X as production scales into 2018,” even without tax and other government incentive programs, which should mean the demand will translate well into benefit for its bottom line, once it can get over the production hump and start making them at scale.
Tesla also shared some other key information about its Model 3 in the letter, including that it has opened up the Model 3 configurator to thousands of employees who placed pre-orders so they could begin choosing customization options for their orders. It also revealed that pre-order customers who aren’t employees would soon start to receive invitations to begin their own orders in small groups, based on where they are in sequence in the pre-order list. Existing Tesla vehicle owners get first priority, and deliveries outside of Tesla’s own employees will start beginning in Q4 this year.
As revealed previously, Tesla’s first pre-order shipments will be long-range battery models, which start at $44,000, and can range up depending on whether buyers opt for the addition of a $5,000 upgrade package. The entry-level Model 3 should begin shipping in the U.S. sometime in November, Tesla said in its letter to investors today.
It also noted that outside the U.S., Model 3 orders won’t begin being delivered until “late 2018,” with right-hand drive markets not receiving shipments until 2019.
Tesla notes that Model 3 is designed with fewer than 100 possible permutations at launch in order to help simplify production processes. It also said it’s fine-tuning its Gigafactory 1 production lines to help boost the rate at which it’s able to make Model 3 drive units and its own 2170 form factor battery cells, which are used in the Model 3 powerhouse. Tesla’s goal is to hit a run rate of 5,000 Model 3 vehicles per week by end of year, and achieve a 10,000 Model 3 per week clip at some point next year.
Interestingly, Tesla also said that rather than being down as some analysts predicted, Model S demand increased following the Model 3 event, though it’s “too early to draw strong conclusions.” If Model 3 proves a halo effect driver, that could be huge for the automaker.
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