Tesla Customers Must Fork Over Another $2,500 To Hold Model 3 Reservations
Tesla customers holding Model 3 reservations are being asked to provide an additional $2,500 on top of the $1,000 initial deposit before the electric automaker begins building their car.
Customers must pay another $2,500 before the California-based company begins building their car, Bloomberg reported Thursday. The ploy allows the company to double up on cash infusions from the deposits — if 100,000 people confirm an order this week, then Tesla gets a $250 million injection of capital into its coffers.
Reservations for the relatively inexpensive car are constantly fluctuating as some cancel orders while others make new reservations. It’s difficult to determine the exact numbers because Tesla does not calculate the total numbers from region to region.
Tesla is scratching and clawing to fulfill a promise to produce 5,000 Model 3s a week. Bloomberg’s Model 3 tracker suggests the company will a production rate of about 3,400 of the sedans.
CEO Elon Musk initially planned to produce 5,000 Model 3 sedans a week by the end of 2017, but that number was quickly revised as the inexpensive vehicle’s production began faltering.
The company managed to build a mere 260 Model 3s between July and September 2017. Total orders for the vehicle tumbled from a high of 518,000 to 455,000. Production on the highly touted vehicle was expected to expand from 100 cars in August to 1,500 in September then plateau to 20,000 per month in December 2017.
Musk promised to eventually produce 20,000 cars per month. Analysts alleged in the past that Musk and Tesla are operating a type of Ponzi scheme designed to use customer deposits to prop up the beleaguered company’s fledgling production capacity. (RELATED: New Market Report Calls Tesla A ‘Ponzi Scheme’ Similar To Enron)
Tesla’s ability to raise more capital took a hit in March when Moody’s dropped the company’s credit rating and changed the outlook to negative as Model 3 production dwindled. (RELATED: Moody’s Downgrades Tesla’s Credit Rating As Model 3 Slips Into Obscurity)
Tesla will need to raise more money in the near future to meet its cash needs, the credit rating agency claimed. Moody’s labeled the electric car marker a substantial risk for investors willing to dive headfirst into the auto market. A company spokesman told The Daily Caller News Foundation that the additional $2,500 deposits are not new.
“This is a deposit we’ve always required when ordering all our vehicle orders, including Model S and Model X, given that we build cars to our customers’ specifications,” said Tesla spokesman Dave Arnold. “The deposit is made when you configure your car and it goes towards the purchase price of the vehicle.”
This post has been updated to include comment from Tesla.