Just about a week after Tesla [NASDAQ: TSLA], started its much-awaited pre-order of its entry level Model 3, Elon Musk has many things to be happy about.
First, we can now confirm to you that according to Tesla’s order statistics, over 325,000 pre-orders have been recorded. This is more than all the cars Tesla has ever made in its entire existence as a business. Suggesting that some buyers might plan to resell their Model 3 after delivery, it is also interesting to know that 5% of the total customers ordered more than one car.
With a minimum order value of $1,000, to be completed over a determined period of time, If all customers make good their plans, Tesla would need a big bank to take in at least $14 billion in total order redemption. This is huge and would catapult Tesla into a mainstream car manufacturing company. But in more positive way, Tesla would be leading the global electric car category.
For now, Tesla has made a minimum of $325 million and can conveniently use orders as collateral for loans to fulfill them.
The challenge ahead is an expected default that might occur. Should that be a significant percentage of the total order, Tesla, might either hedge this risk via derivatives, or have serious terms and conditions that would allow it sell the finished cars in retail arrangements.