Tesla Model 3 exodus? Analyst claims buyers are cancelling orders
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More and more Model 3 buyers have been cancelling their orders in recent weeks amid extended delays and fears that the promise of a full tax credit will expire.
So many, that analysts claim cancellations now outpace new orders.
A Needham & Co analyst said today that the refund rate has hit 24 percent, doubling what it was last summer.
But, Tesla has since hit back, stating that these claims are 'unequivocally false.'
Tesla denied that refunds for the deposit on its Model 3 sedan were now outpacing reservations, responding to an report earlier in the day by a Wall Street brokerage citing channel checks on the electric carmaker.
'The notion that Model 3 cancellations are outpacing orders is unequivocally false,' a Tesla spokesperson told Reuters.
Needham & Co analyst Rajvindra Gill wrote in a client note earlier on Thursday: 'In August '17, TSLA cited that the refund rate was 12 percent.
Almost a year later, we believe the refund rate has doubled and outpaced deposits.'
Shares in Tesla fell as much as 3 percent in early deals on Thursday before recovering to trade just 0.3 percent lower by 2.05 p.m. EDT.
The firm began taking $1,000 deposits for its first mass market car back in March 2016, and the waiting list has since grown to about 420,000 worldwide, according to the Associated Press.
Though buyers were promised a $7,500 tax break, the clock is now ticking closer to the deadline.
Tesla sales hit 200,000 last week. And, at that point, federal law requires this credit be phased out, AP reported.
Model 3 buyers have until the end of the year to get the full deposit, before it drops down over 6-month increments and, on Dec 31, 2019, ends completely.
In recent months, troubles have been continually mounting for Tesla and its troubled CEO Elon Musk.
Today, it was revealed that the firm's battery maker is suspending its cobalt supplier amid concerns over US sanctions.
Panasonic said it was unable to determine how much of the cobalt used in batteries it makes for Tesla cars comes from Cuba, a country subject to U.S. sanctions.
As a result, it's suspended relations with a Canadian supplier.
The Japanese electronics giant, the exclusive supplier of batteries to Tesla, made the comments following questions from Reuters about whether the batteries contained Cuban cobalt.
Two sources familiar with the matter told Reuters that some of the cobalt that Panasonic uses to make Tesla's batteries is mined in Cuba by Canadian supplier Sherritt International.
Panasonic said it was unable to tell how much cobalt sourced from Cuba via its Canadian supplier ended up in the batteries it provided to the U.S. market 'due to co-mingling of sources by its suppliers in several phases of manufacturing processes'.
'Panasonic has chosen to suspend its relationship with its Canadian supplier,' a spokeswoman said, without naming the supplier. She added that Panasonic had used cobalt from the Canadian supplier for batteries used in the Tesla Model S and Model X, but only after February this year.
'Panasonic has sought guidance from the U.S. Treasury Department's Office of Foreign Assets Controls (OFAC) regarding its interpretation of the scope of the U.S. ban on Cuban-origin imports,' she said.
The United States imposed sanctions on Cuba after Fidel Castro nationalised swathes of American assets more than 50 years ago.
Tesla, when asked for comment by Reuters, did not address questions about whether its batteries contained Cuban cobalt or whether that could potentially put the company in breach of sanctions.
A spokesman said: 'Tesla is aiming to achieve close to zero usage of cobalt in the near future.'
The electric vehicle maker, run by billionaire Elon Musk, said in May that it had been working for years to reduce the amount of cobalt it uses in its batteries.
- Daily Mail