Would-be Tesla customers wait, wait for their cash back

[MichMan]

Detroit News -Daniel Howes

How long could Detroit’s automakers get away with sitting on $1,000 deposits from customers tired of waiting, waiting, waiting for their new electric car?

Not very long. The likes of General Motors Co., Ford Motor Co. and Fiat Chrysler Automobiles NV would be accused of using the cash as interest-free financing to fuel their operations. And the allegations would be directionally, if not literally, correct.
They would be pilloried — by investors, by regulators, by the news media, especially by would-be customers. Any constituency accustomed to calling BS on sketchy tactics would smell more of a money grab by a financially stressed startup than the defensible actions of a crisply run company.

But not Tesla Inc.
The Silicon Valley-based automaker controlled by Elon Musk is slow-walking requests for refunds, Bloomberg News reports. Customers tired of waiting for the company to deliver a legit $35,000 Model 3 compact as promised several years ago say they are being forced to wait as long as six months to get their cash back.

Starting in 2016, Tesla booked hundreds of millions in individual $1,000 deposits eager to get their hands on an affordable Tesla intended for the masses. But the folks who can't afford the upscale versions of the Model 3, much less the flagship Model S, mostly are left to wait, wait, wait because Tesla needed the cash, cash, cash it could book from building higher-priced Model 3s first.
The double standard is stunning, if entirely predictable by now. Flouting common business sense is a core principle of Musk, whose iconoclasm attracts investors, boosts the company's market value and raises a simple question: How long can this kind of stuff go on in one of the country's most regulated industries?

It's yet another example showing how the rules are different for the global auto industry's pre-eminent startup. Its CEO regularly spurns industry convention; its senior management churns repeatedly; its manufacturing quality evokes more Detroit circa 1980 than Silicon Valley 2019. And Tesla mostly gets away with it.

When Tesla sits on nearly $800 million in customer deposits at the end of last year, according to Bloomberg, and continues to assemble a record of customer-service complaints, how long before regulators start asking about what's going on? Customers already are.

What they may lack in brand cachet could be offset by the quaint notions of dependability, the ability to more easily get parts and timely service, and the assurance that it wouldn't take six months to get a customer deposit returned because the automaker couldn't keep its end of the bargain.
Doing what you say you're gonna do still matters — and it should.

[link:https://www.detroitnews.com/story/business/columnists/daniel-howes/2019/02/26/tesla-customers-wait-wait-cash-back/2982332002/|

[TheBlackAdder]

1. My brother is on the list, wants to cancel--the model he's being offered is $15K less than Model S

.

He thought he was getting a $40K car, and now with upgrades forced on him, it's around $60K.

.

[MineralMan]

2. It's a tired old story, actually. Funding a company by soliciting

deposits on purchases in the future is the oldest trick in the book. Rarely do those who provided that funding ever actually end up owning the product. The method has been used for everything from flying cars to cold fusion projects. My brother-in-law put down $1000 as a deposit on a three-wheeled, two passenger car that was projected to be built. The production date has slipped every year farther into the future. There won't be any cars. There won't be any refunds of those deposits. It was a scam. It always was a scam.

Blue Sky scams are so common that you'd think everyone would have figured that out long ago. Will the Tesla depositors ever get their cars? Maybe. Will the price be what they were told? Almost certainly not. Will they get refunds? Possibly, but it would be a good idea to get on the refund list ASAP.

Elon Musk is a very clever entrepreneur. He has actually produced some of what he has promised. That has encouraged more people to put down deposit money. Will people get their affordable Tesla cars soon? Nope. Not happening. Meanwhile Musk has their deposit cash, and is using it in some way or another. Want a refund? Get in line.

[BSdetect]

3. Musk is now touting an electric pickup but he's been beaten by Rivian already

Waiting for Tesla to claim their truck will be bigger, better cheaper etc

I know of someone who sold their Tesla sue to the constant software updates. It just got too annoying.



Link to Riviian article: https://electrek.co/2018/11/29/rivian-r1t-electric-pickup-truck-order/

[csziggy]

4. Years ago a friend ordered a Prius with a $5000 deposit

But several months in he needed a car and it was still going to be months before his Prius would arrive. Fortunately there was enough demand he sold his order for more than his deposit. Then he turned around, went to another dealership and bought a car off the lot, using the profit he made on his original Prius deposit to decrease the loan on hi new car.

Maybe would be Tesla buyers should consider that option?

[rgbecker]

5. Interesting that the article is in a Detroit paper.

Nobody likes the new guy. In Motor City, Washington DC or anywhere else.

Has been a lot of negative Tesla reports over the years yet they somehow soldier on.

Astounding that in the past a car maker could turn a profit making less than 10,000 cars a year, no trouble...now it takes hundred's of thousands. The numbers always favor the huge corporations.

[MichMan]

6. Detroit writers generally have a very good understanding of the industry

While you expect them to root for the home team, they are have a very good understanding of the entire industry as a whole. There are usually daily articles here on what is going on and they are not afraid to be critical of the big 3.