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Almost a quarter of Tesla Model 3 orders refunded, according to report

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By Chris Chin


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Despite the optimism and hope from fans for the success of the Tesla Model 3, it seems even some of its potential customers weren’t happy with the issues the company’s been having with the EV’s launch. According to Recode, another production delay recently made headlines, causing a new peak of pre-order cancellations— nearly a quarter of all Model 3’s initial reservations.

Since Tesla’s Elon Musk announced the Model 3 over two years ago, the company began accepting $1,000 deposits while promising the delivery of these vehicles by 2018. Bouncing off of the success of the Model S and Model X, Tesla managed to score several hundred thousand reservation orders.

Things went awry fast, however, as Tesla struggled with production roll-out and quality control issues that made headlines across the world. This caused both customer and investor confidence to dwindle very quickly, leading many to question the company’s validity and ability to produce a mass-market electric vehicle on such a massive scale to be the “EV alternative to a BMW 3-Series.” It also raised eyebrows over the handling of the company’s finances.

Many customers have been demanding their money back as a result of these production issues. New data surfaced around the end of April this year from financial data firm Second Measure. The company sorts and analyzes data regarding billions of dollars of anonymized credit and debit card purchases.

The firm discovered that Tesla refunded almost 23 percent of all Model 3 deposits in the U.S. In the grand scheme of things, this isn’t a back-breaking number and cancellations are expected to a certain degree. But while Tesla received around 450,000 reservations last quarter, the company only delivered 8,180 Model 3s. Yea, it’sthat far behind.

Potential Tesla Model 3 customers are still supposedly eligible to replace a deposit for a Model 3 when production becomes steadier. But this still might have an effect on Tesla’s near-future performance in sales, as customers could simply choose an entirely different car brand and model altogether.

Recode spoke to a Tesla representative, who said that Second Measure’s data doesn’t accurately portray the company’s internal data. The same representative didn’t disclose the size of the data discrepancy, however.

This isn’t to discredit Second Measure, since the same firm accurately discovered that of the 518,000 gross reservations, the company only netted around 455,000 reservation confirmations (Elon Musk confirmed this data back in August). This implies that there were around 63,000 cancellations, resulting in a 12 percent cancellation rate.


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