Tesla can be finally creating enough product 3s — although an analyst says many customers are growing too impatient to wait any longer for them.
Cancellations for product 3 orders have picked up in recent weeks. Refunds currently outpace deposits for Tesla’s brand new mass-market electric car, according to Needham & Co. analyst Rajvindra Gill. Tesla disputes in which.
In an analyst note delivered to clients Thursday, Gill cited extended wait times for your vehicle, the expiration of a $7,500 tax credit, in addition to the fact in which Tesla has not yet made the $35,000 base product of your vehicle available for purchase yet.
About one in every four product 3 orders can be canceled, Gill said, double the rate by a year ago. Customers have to put down a refundable $1,000 deposit to reserve a product 3, then pay another $2,500 to choose their specific edition. They pay the rest when your vehicle can be delivered.
The wait time for a product 3 can be about 4 months to a year, in addition to base product customers could wait until 2020, Gill said.
A Tesla spokesperson denied in which product 3 cancellations exceed brand new orders. The spokesperson also said the wait times in which Gill cites are outdated. Tesla’s website currently lists wait times by 1 month to 9 months.
Related: Tesla’s product 3 isn’t definitely for the mass market. the item’s a luxury car
Gill called sales of the product S in addition to product X “lackluster,” especially with the growing amount of competition by luxury manufacturers. Tesla announced earlier This specific month in which orders in addition to deliveries of those products grew last quarter. The company can be also maintaining its delivery target of 100,000 vehicles.
He doubts Tesla will reach its target of 100,000 product 3 deliveries by the end of the year — to accomplish in which goal would likely require the item would likely have to ship 27% more cars inside second half of the year than the item did inside first half. Gill said in which he’s also “skeptical of demand” for the sedan.
In another warning, the analyst said Tesla’s capital structure can be also “unsustainable,” as free cash flow continues to evaporate. Gill expects Tesla to burn through $6 billion by 2020. He wrote in which the Tesla stock can be “still overvalued” despite falling 16% by its June 2017 peak.
He downgraded Tesla ( stock to “underperform” — essentially a sell rating. )
Tesla has been struggling with the product 3 for several months. Separately, investors aren’t thrilled with founder Elon Musk’s antics on Twitter.
Tesla’s stock fell nearly 3% Thursday.
CNNMoney (brand new York) First published July 19, 2018: 11:12 AM ET