- Musk said 276,000 orders were placed through Saturday evening
- Pre-orders infuse Tesla with more cash than the June 2010 IPO
Tesla Motors Inc. jumped to a six-month high after pre-orders for its new Model 3 topped a quarter-million, blowing through billionaire founder Elon Musk’s own target as he seeks to break into the mass market for electric vehicles.
Musk, the company’s chief executive, said on Twitter over the weekend that orders for Model 3, which has a base price of $35,000 before a federal tax credit or state incentives, had reached 276,000, as much as four times his expectations. If pre-orders were to all convert to actual sales, it would represent a backlog of more than $11 billion. Musk said over the weekend that the average sale price, with options, is likely closer to $42,000.
Because each pre-order required the customer to pony up $1,000, Tesla has now taken in more cash from the Model 3 than its June 2010 IPO, which raised $226.1 million.
With demand exceeding expectations of Musk and analysts alike, Tesla shares gained 5.1 percent to $249.74 at 2:29 p.m. in New York after reaching $252.12, the highest intraday price since Sept. 30. The company also is due to report first-quarter deliveries today; Tesla forecast an increase of 60 percent for the quarter to about 16,000 vehicles.
Musk unveiled the five-seat vehicle with a 215-mile (346-kilometer) range at an 800-person party late Thursday night at the company’s Hawthorne, California, design studio, where guests quickly lined up for a quick spin. Tesla plans to start delivering the Model 3 in late 2017.
“This is the vehicle that people were waiting for that would make electric-vehicle ownership, and specifically Tesla ownership, affordable,” Michelle Krebs, an analyst at Autotrader.com, said in a phone interview. The automaker will have to work hard to ramp up production, delivery and servicing requirements for the model and will probably face stiff competition from other makers of electric autos, she said.
“This will be a big test for Tesla -- can they really compete in the mass market?” Krebs said.
The volume of Model 3 pre-orders, which required the deposit and are refundable if buyer cancels the reservation, was two to four times what Tesla expected, Musk said in a tweet. Those orders are far more than Tesla’s full-year forecast for deliveries of its Model S and Model X vehicles, which it sees at 80,000 to 90,000, according to its Feb. 10 letter to shareholders.