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Report: 23 percent of Model 3 reservations have been canceled

by Drew Johnson

A large chunk of Model 3 hand raisers are bailing on their deposit.

Following the unveiling of its cheaper Model 3 in 2016, Tesla was inundated with pre-orders for the plug-in sedan. Within weeks of the Model 3's April 2016 debut, had plunked down a $1,000 deposit to reserve their spot in line for the cheapest Tesla to date. But it appears as though that initial support is waning.

According to data firm Second Measure, 23 percent of all Model 3 reservations have been canceled. Second Measure, which uses credit card and debit card information to generate its data, notes that April saw the highest percentage of Model 3 refunds. That's the same month Tesla announced it was of the Model 3.

A Tesla spokesperson Recode that the company's internal numbers aren't inline with those presented by Second Measure. However, the spokesperson declined to say just how far off Second Measure's figures were.

Although it's difficult to verify Second Measure's findings, the company has been correct about Model 3 reservation cancellations in the past. Last summer the firm estimated that 12 percent of Model 3 orders had been canceled, a figure that was later confirmed by Tesla CEO Elon Musk.

People bailing on their pre-orders for the Model 3 shouldn't come as a huge surprise. Tesla has struggled to ramp up production of the Model 3, resulting in long delivery delays. Tesla initially planned to build 5,000 Model 3s per week during 2017, but last quarter the company said it delivered just 8,180 units of the plug-in sedan.

Although somewhat worrying, the cancellations shouldn't cause panic at Tesla headquarters. The company currently has more than enough Model 3 reservations to keep its factory humming for the foreseeable future. Moreover, it's possible that those customers that jumped ship on the Model 3 could come back when production eventually ramps up.

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