Tesla achieves 276k Model 3 orders in three days

Shares in Tesla Motors surged to a six month high on Friday after announcing that orders for its new Model 3 sedan passed 130k in the first 24 hours after its Thursday night launch. Since then, the number has passed 276k and continues to rise according to a Tweet on Sunday from Tesla CEO, Elon Musk. Musk added in a subsequent Tweet “A Model 3 order gives you priority in your geography, so, even tho total count is high, ordering early will make a big difference locally." It would seem that Tesla itself has massively underestimated demand for the Model 3, with Musk revealing that his company expected "1/4 to 1/2" of the pre-orders it received, and as a result Tesla is “Definitely going to need to rethink production planning.” Much has been written on the subject of demand, especially given Tesla delivered only 50k vehicles in total last year. The Gigafactory battery production facility in Nevada is seeing constant progress, but is still not at full production capacity, however AutoBlog reports that the key to achieving production of so many pre-orders, could come from the cash raised by the pre-orders themselves: “For one thing, Tesla will at least have solid cash flow for a while, allowing it to make the investments necessary to ramp up production of a mass-market EV. Recall that Musk was a co-founder of PayPal, a company that makes money in part by holding onto money. With each of those people paying $1,000 for their spot in line, that means Tesla is sitting on $180 million in reservation money from now until the cars start trickling out of factories in late 2017…”

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More than 253,000 people have put their names down for the upcoming Tesla Model 3 electric car, representing over $253m in pre-order fees and more than $8.8b in potential sales.

Customers have pre-ordered the car in droves, each paying £1,000 for the privilege, in the hope of being one of the first to get it after release in late 2017.

The Model 3, the affordable alternative to the £60,000 Model S, was unveiled at a glitzy event in Los Angeles next week.

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Although it boasts a range of 215 miles on a single charge and a 0-60mph speed of under six seconds (and that's just for the basic model), the Model 3's $35,000 price tag really sets it apart.

If each of these pre-ordering customers go on to buy the cheapest version of the car, Tesla stands to make at least $8.8b on launch day - not bad for a company which has only sold 100,000 cars to date, and posted a £620m loss in 2015.

Although the UK price hasn't yet been announced, it's expected to be around £25,000, below the average price of a new car in Britain.

The pre-order fee is £1,000 in the UK and €1,000 in Europe, so without data for each country, it's difficult to know exactly how much money Tesla stands to make.

However, it's fair to say the figure will stretch into the billions. Writing on Twitter, Tesla's founder and CEO Elon Musk said he was expecting the pre-order number to be around a quarter to a half of what it is now, just three days after the announcement.

"No one at Tesla thought it would be this high before part two of the unveil," he said.

By 1 April, when the figure was at around 200,000, Musk tweeted: "Definitely going to need to rethink production planning."

Tesla estimates it will be able to produce 500,000 of the vehicles a year once the factory is running at full capacity. However, production will take some time to ramp up, so customers may be in for a wait if pre-order numbers continue to climb.