My father called last night and handed the phone to a guy he just met at a wedding. This fellow had just purchased a Model 3 at the Tesla store in Highland Park, IL. He said that it took many hours to get the car, but that isn’t the worst part. Tesla withdrew an extra $30,000 from his checking account and wouldn’t release the car until they were sure it didn’t bounce. This took hours longer. However, Tesla then told him that he wouldn’t get the $30,000 back for at least 90 days.
My father’s brother in law is a lawyer in Madison, WI who heard the story directly, as he was at the wedding too, and believes this action is illegal. Seems to us to be a violation of consumer protection rules and law’s.
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The guy did say that he loves the car. However, he now worries that the company is so poorly managed that it won't make it. He better hope his return of the $30,000 occurs before the company files for protection from creditors, which he now is, and an unsecured one at that.
In another item on our news feed, there are reports of Tesla "systematically" collecting the full purchase price of the Model 3 but "failing to deliver" the cars.
Could these be part of the reasons the Tesla VP of Worldwide Finance recently resigned? Will Tesla use these funds at quarter end to add to their "reservation" account value? Will overbilling or collecting on cars not yet delivered be the reason the company is "cash flow positive"? Given the fact that four senior finance executives that have resigned since March of this year, we believe that there is something quite sinister occurring at Tesla.
John C. Thompson, CFA
CEO and Chief Investment Officer
Vilas Capital Management, LLC