In an unprecedented move, by a company who keeps their books very much “under wraps”, Tesla (TSLA) CEO, Elon Musk, has revealed order book statistics for his company’s cars. This reveal comes amid increasing concerns involving Model 3 cancellations, and the belief that demand for the mass market Model 3 car may be on the decline.
In response to this, 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 X. In response 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 2,000 S/X and 5,000 Model 3 *new* net orders.”
By Musk using the word “net”, he is indicating that the orders are after accounting for possible cancellations. The 2,000 weekly orders for Model S and X are also matching the global average goal that Tesla is aiming to achieve with those vehicles. This tweet comes on the heels of Tesla opening up Model 3 orders to everyone, by dropping the previously instated reservation system.
Also, during this period of time, the Palo Alto, California based company is currently receiving a very large batch of orders. This order is most likely much larger then the 5,000 which was the original weekly goal made by Tesla. This large shipment is for customers waiting for the two all-wheel-drive versions of the car.
In the past, Tesla normally only reports their delivery and production numbers on a quarterly basis, while offering insights into comparative figures during the same period of the previous year. Therefore, Musk’s revelation is breaking in line with Tesla’s tradition, and is likely an attempt to silence critics and put a stop to some of the rumors and bad press that has been surrounding the company the last few weeks. Especially the publicity specifically surrounding Model 3 cancellations, which caused their stock to take a significant hit this week.
Just yesterday, Needham analyst Rajvindra Gill had issued a note to clients that Model 3’s are facing a high cancellation rate, and Tesla’s stock declined nearly 2% directly following that note. Gill had stated, “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 continued to downgrade Tesla’s stock to a sell, due to the variety of reasons stated in the note.
Between February and June Goldman Sachs has also twice downgraded Tesla stock to sell, citing vehicle production issues as the reason.
Tesla shares were trading at $320.25 during Friday morning trading.