Cross posting here for those that don't follow my other thread where I post this spreadsheet monthly. Model 3 just outsold every car on this list for the first time in May. Going forward, that will be the case every month, indefinitely. Enjoy...
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Model 3 set to dominate it's category as early as next month
- Thread starter Swampgator
- Start date
June may be an outlier if they forestall hitting 200k.Cross posting here for those that don't follow my other thread where I post this spreadsheet monthly. Model 3 just outsold every car on this list for the first time in May. Going forward, that will be the case every month, indefinitely. Enjoy...
well, there's a giant backlog of reservations to get through, so for a while, Model 3 is going to beat everyone else easily. But what happens when we exhaust reservations and sales become steady state like the other cars? Personally I think Model 3 will still hold on to the lead, but it won't be off the charts like it will be toward the end of this year.
SageBrush
REJECT Fascism
I'll rephrase that into a question of my own:
Is there a world-wide market for 10k Model 3 a week a year from now, given the expected change in government subsidies ?
It seems clear that Tesla has already (or mostly) baked 2019 battery cost reductions into their planning, so I don't really expect car prices to drop in 2019. Maybe in 2020.
I expect another bumpy ride, but what's new ? Luckily Tesla is diversifying their battery production outlets.
Same thing was said about the Model S when naysayers were questioning whether Tesla could achieve a steady state of 20,000 cars a year. We all know how that ended.
I totally agree. Same thing with the Model X. Many people predicted that as soon the Model X reservation backlog was depleted sales per year would drop to less than the reservation backlog (about 27K at the time the configurator opened Tesla Model X Reservations Approximately 27,000 Worldwide).
Here is a classic example from an infamous Tesla "skeptic" who in early 2016 boldly and incorrectly predicted Tesla "will never sell more than 20,000" Model X in a year. https://seekingalpha.com/article/3956460-can-tesla-save-model-x
A year later (2017), in only the second year of production, Tesla sold 46,500 Model X. Tesla Model X - Wikipedia
I believe similar predictions about Model 3 demand will also turn out to be way off the mark, and Tesla will easily exceed 500,000 sales per year as soon as production can be scaled up to 10K/week.
I think many people are seriously underestimating what it means to have 450,000 preorders. That is a staggering number considering that most customers would not dream of buying a car they have never seen in person, can't test drive and have to wait two or three years to have delivered.
When the Model 3 is available in showrooms, can be test driven, is available for delivery in a few months and word of mouth spreads, demand will continue to be off the hook.
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SageBrush
REJECT Fascism
That is my hope too, but I would not extrapolate too much from the earlier Tesla experience since the tax credit was 1, still available; and 2, less of the total fraction of the car cost.
Let's assume 35k config is definitely a thing and will be forever available as an option. And let's assume we're at a point in the future where Tesla has exhausted all of the tax credits. I think at this price point, we're still going to see a lot of volume. I see so many BMW 3 series are on the road, and to me, each of those people are a potential Model 3 buyer from a means perspective. At that point, if Tesla decides it needs to start advertising the car, I suspect Model 3 will continue to crush everything in its segment. Given how savvy Tesla's marketing has been thus far, I have a feeling that a Model 3 ad is going to be very high impact.
dhrivnak
Active Member
While this is great I do expect sales in the USA to dip for June as they work to stay under the 200,000 trigger.Cross posting here for those that don't follow my other thread where I post this spreadsheet monthly. Model 3 just outsold every car on this list for the first time in May. Going forward, that will be the case every month, indefinitely. Enjoy...
dhrivnak
Active Member
But the volume market is the Camry, Accord and Malibu market. With $35k and the low fuel and maintenance costs I think Tesla will do well in that space.
I read somewhere that Tesla is tracking what cars people are coming off of when they buy Model 3 (via trade-in declarations). I bet they will want to keep that secret, but man, I'd love to know that info.
dhrivnak
Active Member
That is likely going to be incomplete data as many like we did just bought the car as Tesla trade ins are not very generous.
SageBrush
REJECT Fascism
That market is feature sensitive**. By that I mean they will choose a car based on ability to add their pet feature and stay within their budget. For some it is leather, for others it is radar assisted cruise, for many it is AWD ... the permutations are large. They might look at a Model 3 and then find that their pet feature bumps the price to over 40k compared to $30k for the alternative. The difference in fuel costs does in fact cover a $10k purchase price difference for people with PV, but that is so far a small group of people and it requires a bit of arithmetic outside of the comfort zone of mainstream America. Remember, mainstream America is still uncertain if AGW is a real thing and they refuse or are incapable of pricing it into their choices.
My gut feeling is that Tesla will have to reduce the base price to $30k and increase the battery to 60 kWh to really compete well in this segment. Or fossil fool can rise to over $4/gallon. Whichever comes first
**
Ask your mainstream friends if they prefer a "stripped" Tesla or a "top of the line" Camry/Accord.
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The whole tax credit thing is a red herring. This only applies to the US market. We are talking about worldwide car sales of 10,000 a week. There are many countries that do not have a credit or rebate and the Model 3 is doing just fine.
That is one factor to consider (for U.S. sales only) but there are many others in favor of demand for Model 3 continuing to grow from an already huge base, for example:
- As Model 3, S and X spread beyond early adopters and become more mainstream, the benefits will become better known and it will be easier for buyers to get comfortable switching to an EV
- The v.3 Superchargers Elon announced this week plus continued expansion of Supercharger, local and destination charging networks should make charging even faster and easier, removing the main roadblock to EV ownership for many people
- Rapid growth in rooftop solar makes EVs like the Model 3 cheap and clean and will add to appeal
- Tesla will keep innovating and improving on the Model 3, as with the S and X, and advantages over ICE cars will continue to grow
- Diesel debacle in Europe make timing perfect for Model 3
- Tesla has barely scratched the surface in many parts of the world, including China
I think sales could eventually be much higher than 500,000 per year (with Model Y sales even higher).
SageBrush
REJECT Fascism
That may well be the reason why Elon is adding 2 more car factories - one in China, Shanghai and another one in Europe.
And 12 Gigafactories total for battery production.
He also said car battery production in the future will be under the roof of the car factory.
Currently that may be the case but China will be much more important than the US in the long run. Also Tesla doesn’t even sell to the entire world yet. They have plenty of markets to add (i.e. Turkey, Russia, etc.)
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