Pre-order for Tesla new model electric car falls 12%, says CEO Musk

Tesla CEO and founder Elon Musk has revealed that about 63,000 (12.2%) people have canceled their Model 3 pre-orders. The number of orders went from approximately 518,000 to 455,000, Musk said.

Tesla is continuing to see demand for its first mass market car, the Model 3, with an average of 1,800 new orders a day and the company has 455,000 net reservations for the car, which starts at $35,000.

Tesla’s Model 3 is unlocked by a smartphone and doesn’t have a traditional key or fob among a host of other details at the delivery event for the first 30 mass-market electric cars over the weekend.

Instead, would-be buyers of the $35,000-plus five-seat electric car will have to unlock the car with their smartphones over Bluetooth. The car will detect the owner’s smartphone – almost all modern smartphones made in the last three years supports Bluetooth – and automatically unlock, ready to start and go.

On its call, “Those cancellations occurred over the course of more than a year,” Musk said on the call. “I think [these numbers] are inconsequential. With a small amount of effort, we can easily drive the Model 3 reservation number to something much higher but there’s no point

Still, those ordering Model 3s today will likely not receive their cars until the end of 2018 at the earliest.

Musk didn’t change its guidance on the production ramp of its mainstream vehicle, expecting to manufacture 5,000 Model 3 cars a week by the end of 2017.

Musk said he has no doubt that the company will be able to reach a production rate of 10,000 cars a week by sometime in 2018.

As the Model 3 enters what Musk called “six months of manufacturing hell” as Tesla ramps up production to meet the more than 450,000 pre-orders, one of the most surprising tidbits is that there is no traditional key to open and start Tesla’s mass-market electric car hope. Tesla CEO said investors should have “zero concern” about whether Tesla will be able to make 10,000 Model 3s per week by next year. Tesla just delivered the first 30 Model 3s to employees last week.

The CEO, who splits his time between Tesla, SpaceX, and now The Boring Company, also gave more information about the compact SUV the company expects to produce. Originally the car, tentatively called Model Y, was going to be built on an entirely new manufacturing platform.

By Donald Ekelaka, with agency report