In an unprecedented move, Tesla Inc. (TSLA) CEO Elon Musk has revealed order book statistics for his company’s cars. Amid increasing concerns that demand for Tesla’s mass-market Model 3 car may be on the decline, Musk tweeted that the company has received a total of over 7,000 new orders: 5,000 orders for the Model 3 and over 2,000 orders for the Model S and Model X. Responding to a Twitter user’s question, Musk tweeted: “Dunno where this bs is coming from. Who knows about the future, but last week we had over 2000 S/X and 5000 Model 3 *new* net orders.”
The use of word “net” by Musk indicates that the orders are after accounting for possible cancellations, according to EV portal Elektrek. The 2,000 weekly orders for the Model S and X also match the global average for those cars that Tesla is trying to achieve. The tweet comes at a time when Tesla has opened up Model 3 orders to everyone by dropping the reservation system. (See also: Tesla to Speed Up Model 3 Buying by Dropping Reservation System.)
The tweet comes, said the news site, as the Palo Alto, California-based company is receiving “a very large batch of orders, likely much larger than 5,000, especially from those waiting for the two all-wheel-drive versions.”
Attempts to Silence Critics?
Traditionally, Tesla has reported the delivery and production numbers only on a quarterly basis, and it offers some insights into comparative figures during the same period of the previous year. Musk’s tradition-breaking revelation may be an attempt to quell the bad publicity from Model 3 order cancellations.
Yesterday, Needham analyst Rajvindra Gill issued a new note to clients claiming that Model 3 is facing high cancellation rate, reports Elektrek. Yesterday's nearly 2% decline in Tesla stock price was attributed to a Needham note that read, in part, “Based on our checks, refunds are outpacing deposits as cancellations accelerate. The reasons are varied: extended wait times, the expiration of the $7,500 credit, and unavailability of the $35k base model.”
Gill has downgraded Tesla stock to sell owing to the variety of reasons quoted in the note, and claiming that the company’s capital structure is “unsustainable.” Between February and June, Goldman Sachs' research desk has also twice downgraded Tesla stock to sell owing to production issues. (See also: Tesla Will Miss Model 3 Goals Again: Goldman Sachs.)
Tesla shares were trading at $320.25 during Friday morning.