Tesla’s Secret Power Source: Crowdfunding
Bankable: As of September, Tesla had customer deposits of $686 million, up from $270 million two years ago. ILLUSTRATION: ELIAS STEIN FOR BARRON'S
Earlier this year, electric car pioneer Tesla dropped Motors from its name. The move was a recognition of the company’s broader ambitions beyond cars, from bigger batteries to solar to artificial intelligence. Add crowdfunding to the list, as well.
Tesla is currently accepting deposits on multiple products: its mass-market Model 3 sedan, a niche Roadster, an electric semi truck, and new solar roof tiles. So far, actual production has been limited. The Model 3 has shipped in small numbers. Tesla says solar installations should ramp up next year. The semi isn’t planned until 2019 at the earliest, while the Roadster has a target date of 2020.
Tesla is pulling in big dollars from the products, nonetheless. As of September, Tesla had total customer deposits worth $686 million, up from $270 million two years ago—funds that can be plowed into the next big idea. Move over, Kickstarter.
Last week, Tesla got a new round of semi preorders from UPS, which announced it was buying 125 trucks. UPS didn’t disclose financial details and declined to answer our questions about the deal. But Tesla’s website indicates a reservation price of $20,000 for each semi, which will ultimately start at $150,000 each. At the preorder price, UPS’ deal would carry an upfront payment of $2.5 million. Tesla also has semi orders from Walmart, PepsiCo, and Anheuser-Busch, as well as fleet operators.
Like Kickstarter, Tesla offers preorder tiers. True enthusiasts can reserve a “Founder Series” Roadster (limited to 1,000 cars), with a full upfront payment of $250,000. The website makes it easy: The first $5,000 can be put on a credit card. Then buyers have 10 days to wire the balance.