Model 3 mania has increased demand for other Tesla products

Tesla Model X

The tidal wave of reservations for Model 3 carries both good and bad news for Tesla – it’s cool to have all those future sales in the pipeline (over $14 billion worth, the company figures), but it’s a bummer to have to wait two years to get the cash.

However, all the publicity comes with a significant side benefit: increased awareness of Tesla’s existing products, which is already leading to more sales.

Elon Musk and Jon McNeill, President of Global Sales Service and Delivery, discussed the phenomenon during the Q1 2016 earnings call.

“Just about 93% of the reservation holders, this is their first interaction with Tesla, so it is a…new client base,” said Jon McNeill. “There were people waiting in line at the stores, and they were excited to become part of the Tesla community and family.”

“The demographics…are a bit different, as you can imagine, than the Model S and X owners to date,” McNeill continued. “It presents an exciting new market for Tesla as well. These folks are not interested only in Tesla Motors, but also Telsa Energy, because the price point of the Tesla Powerwall is an accessible price point for many of these folks.”

Not all the new family members belong to lower income brackets. In fact, it seems that some are thinking of buying a Model S or X just because it will allow them to get a Model 3 that much sooner. “The quickest path to receiving a Model 3 is being a Tesla owner,” said McNeill. “We’ve agreed that Tesla owners are receiving priority in terms of production…so we’re finding that there’s a good conversion rate of folks that are coming in to test-drive an S or an X who are Model 3 reservation holders.”

“We were fairly worried about [whether] the Model 3 announcement would cause some big drop in Model S sales,” said Musk. “It seems to have had the opposite effect. S demand has increased.”

Demand for Model S in the first quarter of 2016 is “up 45% year-over year, and that demand continues,” concludes McNeill.

 

Source: Tesla
Image: Nathania Johnson – CC BY 2.0