Tesla is sending out e-mails to all Model 3 reservation holders in North America this week informing them that their electric sedans are ready to order and asking for an additional $2,500 to fulfill their orders.
The move could help Tesla in its drive toward profitability this year. Chairman and CEO Elon Musk has promised Tesla would not only be able to produce 5,000 Model 3s per week by the end of this quarter, but that the electric vehicle maker should be profitable and cash flow positive in the second half of the year.
Tesla ended the first quarter with a cash balance of $2.7 billion. It said then that it still expects to spend $3 billion. Deposits for Model 3 vehicles would give Tesla some of the cash that it needs without having to further dilute earnings through stock sales or by issuing debt.
Would-be Model 3 owners already put down a $1,000 refundable deposit to “reserve” one of Tesla’s Model 3s. Those reservation holders must pay an additional $2,500 to turn their reservations into an order, at which point the original $1,000 deposit goes toward the overall payment for the car. Buyers can cancel their orders within three days for a full refund, the company confirmed, but after that their money is Tesla’s for good.
All money paid upfront goes toward the price of the car. This is how Tesla's "pre-sales" have generally worked.