Tesla shares are slumping on Thursday after analysts at Needham & Co expressed fears that Model 3 cancellations could rise.
In a note to investors on Thursday, analyst Rajvindra Gill said that Tesla’s Model 3 “refunds are outpacing deposits as cancellations accelerate,” according to CNBC, which obtained a copy of the note. Gill said that the cancellations are due to a variety of factors, including long wait times to get a car, Tesla’s expired $7,500 credit on the purchase, and the inability for shoppers to get the base model, which goes for $35,000.
Gill added that Tesla (TSLA, -2.49%) has a refund rate of 12% in August 2017. Gill now believes that the refund rate is now twice that.