What's the ultimate demand for the Tesla Model 3?

[insaneoctane]

So Tesla had something like 500K reservations for this car. Lots of fans and previous owners and employees, sure. But, this is also with no conventional advertising. Once the backlog gets cleared out, and people start to really see this car, what yearly demand for this car will there be? Make the assumptions you need (ie they hit the ramp they are aiming for, or go bankrupt), whatever floats your boat. Looking for worldwide numbers. Seems like not only might it be high, but hard to keep up with. If the car still had demand for 500K per year after the backlog is complete, that's 10K per week.

 

[dm33]

Elon has a goal to reach 30% gross margin. If he can achieve that sticking to premium car, no need to sell the 35k car. If they stick with a $50k car that’s a premium segment owned by BMW, Mercedes, Audi etc. Their total sales of all cars are roughly 200k/yr for each brand. if Tesla steals 100k cars per year with a single model that would be huge.
I don’t think they can exceed 200k/yr with a 50k car and I’m not certain they’ll be able to build more than that without expansion of the factory.

 

[dm33]

This is a great poll. I wonder if Tesla will need to make a $35k car or not. I’m very close to pulling the trigger on a new ICE and throwing in the towel on waiting for the $35k model 3. If it shows up at all I’m thinking it may be closer to 2 years from now. Would be nice to be convinced otherwise before I give a deposit tomorrow. I’ve been planning car purchases since 2013 around model 3 estimates. I keep guessing wrong as it keeps getting delayed.

 

[gg_got_a_tesla]

Voted < 200k as I do see the average selling price point to be too high for true Prius-like volume sales.

 

[sreams]

Voted < 200k as I do see the average selling price point to be too high for true Prius-like volume sales.

Average selling price doesn't really matter. Only the prices that are available matter and whether or not people are willing to pay those prices. If Tesla offers the $35K version at some point, I think the total per year will be well over 200K, even considering that others will be willing to pay more, thus driving the average price higher.

 

[Tiger]

If we look at sales stats by price bracket http://www.jato.com/wp-content/uploads/2016/06/JATO-Global-Car-Sales-2016-Q1.pdf and based on price Tesla will be somweher between Large sedan (~1500k) and Luxury (~280k). If Tesla's market share ~30% stays about the same (or better) the sales should be in the range of +500k annually (for this to be feasible would ofcourse require that Tesla's quality assurance challenges have been resolved). @Troy Would be interesting to see some data guy play around with the data and maybe get a better founded estimate.

If Tesla doubles the range of its cars, they will be going to the moon, literally.

 

[sreams]

If we look at sales stats by price bracket http://www.jato.com/wp-content/uploads/2016/06/JATO-Global-Car-Sales-2016-Q1.pdf and based on price Tesla will be somweher between Large sedan (~1500k) and Luxury (~280k). If Tesla's market share ~30% stays about the same (or better) the sales should be in the range of +500k annually (for this to be feasible would ofcourse require that Tesla's quality assurance challenges have been resolved). @Troy Would be interesting to see some data guy play around with the data and maybe get a better founded estimate.

If Tesla doubles the range of its cars, they will be going to the moon, literally.

We'll also have to see if the market responds to the reduced energy and maintenance costs. Initial sale price isn't everything.

In my case, fuel savings alone will be about $1000/yr going from our BMW 325xi to the LR Model 3.

 

[Smokkelaar]

The current reservations are 400 a 500k cars.
I think a lot of countries are promoting elektric cars.
And Tesla's are awesome,
Nobody in my surroundings, understands why im already waiting for more then 2 years and 1 year to come. If they buy a car they want to have it within 3 months at most. I think the numbers dubbles when you split the time in 2. (4 years waiting, 400K, 2 years = 800K, 1 Year = 1600K, 6 months, = 3600K, 3 months = 7200K cars a year.
Count up that lot of new car buyers will sell the car after 4 years. (so current demand is already 100K cars a year).

Now al elektric cars are kind of hard to buy. And they all have delivery problems. (other companies together sells 100K elektic cars?)
But Tesla has the most delevery problems,

So I see a lot of new buyers when the backlog has been cleared.
100K for the people that has already a Tesla but buying a new one.
7200K extra because of better delivery times.
100K from compititors.

So the year demand of the model 3 will be 7,4M.
So Tesla must produce more then 142K cars every week.

That sound too big right?
Yeah kind of.
because the best selling car in the world is the Ford F-serie.
With almost 1M each year.

And even all cars together in a single brand doesn't reach that score.
All toyota's are on almost 8M, but that is a brand with all kind of diffent cars for all markets.

But elektic driving is better than ICE cars, so until the moment the competition can also make a lot of elektric cars. I think 1M is no problem for the model 3 (its not a price issue when you look to the other good selling cars).
But in the time that the backlog is shrinking we have the Tesla model Y and Tesla pickup truck.

 

[LCR1]

Don't let the Ford F series fool you. There is a reason they only list "F-Series" that includes sales of the F150, F250, F350, F450, F550, F650 and F750. This also includes all fleet sales for companies that have fleets of work trucks and government contracts. 35% of F150s and 65% of Super Duty (F250+) trucks are for commercial consumption. Fleets use trucks, Fleets don't quite use as many Corollas.

 

[ℬête Noire]

The biggest question I have of this poll question is "which year?" I expect demand will grow significantly year over year, once the cars are out there and the general public has tangible taste of what it does and how feasible an EV is.

By far the #1 reaction I get when subject comes up is a variation of "Tesla? You gotta be rich!" because the general idea in the public is still Model S/X. This even from people driving vehicles with upfront price above base M3.

Demand underneath the backlog might not even break 100K/year now but by the end of the backlog I expect it to start to approach breaking 200K/year and maybe even past that further out. The caveat is how much a hit Y cannibalizes 3 sales. Depending on it's price-point, it could seriously cut into the M3 market (because people do like their x-overs, see X-Trail/Rogue numbers).

 

[ℬête Noire]

Don't let the Ford F series fool you. There is a reason they only list "F-Series" that includes sales of the F150, F250, F350, F450, F550, F650 and F750. This also includes all fleet sales for companies that have fleets of work trucks and government contracts. 35% of F150s and 65% of Super Duty (F250+) trucks are for commercial consumption. Fleets use trucks, Fleets don't quite use as many Corollas.

So much this. Coupled with the Chicken Tax driven profit margin of pick-ups, that's why Musk has had his eye on pick-ups. Fleet vehicles are generally higher yearly mileage vehicles, that's where BEVs shine over ICE in economics, and the bean counters making purchasing decisions are less prone to getting hung up on "cultural" aversion when the numbers are talking loudly.

 

[LCR1]

So much this. Coupled with the Chicken Tax driven profit margin of pick-ups, that's why Musk has had his eye on pick-ups. Fleet vehicles are generally higher yearly mileage vehicles, that's where BEVs shine over ICE in economics, and the bean counters making purchasing decisions are less prone to getting hung up on "cultural" aversion when the numbers are talking loudly.

Tesla is a very long way from getting their hands in the truck market. No one in the truck market, especially when you count about 40-50% of total sales are fleets, wants anything tesla-esque in a truck, huge computer screen that can fail, fancy door handles, no map pockets, crappy center consoles, etc. none of that will fly in a truck market. Everyone here talks about the great things the M3 does, but when when the M3 actually gets past all the tesla fan boys and into the mass market how many people are going to accept these things?

 

[ℬête Noire]

Tesla is a very long way from getting their hands in the truck market. No one in the truck market, especially when you count about 40-50% of total sales are fleets, wants anything tesla-esque in a truck, huge computer screen that can fail, fancy door handles, no map pockets, crappy center consoles, etc. none of that will fly in a truck market.

2014 called, they want their Model S knocks back.

Seriously, you expect Tesla is going to do a quick El Camino mod of the current Model S design (not even a Model 3 cabin w/said map pockets and what appears so far to be less failure prone handle design) or something?

On the other hand maintenance & fuel costs are king in fleets, and BEV has a huge inherent edge there.

Everyone here talks about the great things the M3 does, but when when the M3 actually gets past all the tesla fan boys and into the mass market how many people are going to accept these things?

Judging from ICE aficionados, coming in skeptical, that have actually driven the M3? They'll do quite fine. But again of course that's something very different than a truck, as that has to be a different ground-up design.

 

[LCR1]

Sorry, the fleet of 50+ pickups and medium duties, along with sales vehicles I managed say differently.

 

[ℬête Noire]

Sorry, the fleet of 50+ pickups and medium duties, along with sales vehicles I managed say differently.

So you're suggesting total cost of ownership isn't a huge factor?

LOL

 

[LCR1]

If a crew of 5 can't fit, can't store their personal belongings, can't fit all their work gear, and can't haul material in the bed as well as pull the trailers. The "truck" is useless. The diesels were much more fuel efficient than the gas motors. The Ford 6.2L isn't the most fuel efficient engine but we still chose it because it's track record. If a truck is in for a EPB failure It's usless. If 3rd parties can't work on them, they are useless. Total cost of ownership is money in vs money out. If no money is coming in then the total cost of ownership is negative.

I got a failure on my car for the parking brake not engaging, a truck with gear and trailer can't afford that. They told me 2 weeks to schedule an appointment FOR A BRAKE FAILURE, I can't afford that in a truck. The guys managed to blow up a caliper on a F250, how? IDK and it doesn't matter when the truck as 11 hours to be back out making money, Autozone is open till 10PM and opens again at 7AM. Light bulb goes out on a f250 and it's a 3 minute swap, how hard is it to change on a Tesla? I don't care that they last "forever," they will eventually fail and need replacement just like everything else. Truck won't go into drive; check brake pedal, linkage and safety switch. Check gear level, linkage and pawl on transmission, done. My car won't go into drive, call Tesla and wait.

The sales girl comes in and her car is sputtering and giving warnings I can hook up 3rd party software and diagnose the issue or pay for the OEM software. I find the problem, have the part delivered and fix it over lunch. I can log into ALLDATA and have OEM repair manuals from every car ever, my buddy who works in the Ferrari Challenge Series uses it and I'm pretty sure thats what he used to restore the 73' GTB

I can pay JosA $10/hr to do basic maintenance on the fleet. I can pay JosB $15/hr to troubleshoot wiring. I'd have to pay Tesla $125/h, Oh it's under warranty you say? Warranties don't last forever what about after the fact? Either way warranty or not, I'd have to schedule an appointment and lose my truck for how long? Or I could fix it overnight and it'll be on it's way. If the AC quits working that truck can't go out in the summer, how long will it take tesla to fix the truck? Will they have a truck upfitted with what our company uses? what about the trucks with roof racks, tool boxes in the bed and power tools wired into the truck? how do I transfer all of that over? On a Ford I can replace the entire AC system if necessary in a few hours. If a drive unit craps out (under warranty or not) what's the repair time? When a tranny blew on our ford I got one same day or next day and 6 hours later that truck was making money.

What's going to happen when the model 3 hits the mass market and all these same things happen. I can work on all my friends cars on the weekend with basic tools and a OBDII reader, if that. What's going to happen when a M3 to joe blow consumer has out of warranty work and they can't go to their buddies house for a few beers or neighborhood mechanic for $40/hr and get it fixed? Tesla will not survive the mass market with any vehicle if they don't fix their service issues. There are about 20 Ford dealers in the Houston area alone, there are 5 tesla service centers in the entire State of Texas. This. Will. Not. End. Well.

 

[R.S]

I think this depends on a lot of things.

First, there is competition form outside and inside. So other electric cars, as well as future electric cars from Tesla (looking at you Model Y) will decrease demand for the Model 3.

Second, incentives. Those play a big role. With all incentives the base Model 3 would cost about 25k in CA, for example, which is about the average selling price for a midsize sedan. Sure, those come with a bit more equipment, but the Model 3 is still a great deal. If all incentives are gone, it becomes a much more expensive car that not that much people can afford.

Third, if they add more body styles. Mostly wagon, for Europe and a long wheelbase version for China.

Forth, more local production. Europe might not be that much of an issue, but producing in China will make the car much more affordable to the Chinese buyers, thereby boosting sales.

As it is now, with competition coming and foreseeing the end of many incentives, I'd say 200-300k sounds reasonable for long term yearly demand. But it could go higher as well. BMW 3 and 4 series sell over 500k times a year, but with wagon, long wheelbase and local production.

 

[ℬête Noire]

If a crew of 5 can't fit, can't store their personal belongings, can't fit all their work gear, and can't haul material in the bed as well as pull the trailers.

So this Model S El Camino you are envisioning sure isn't going work out, huh?

Agreed that "Right to Repair" definitely is an issue that requires addressing (which is all that other stuff boils down to). Before the truck happens, quite frankly. That's why Tesla has said they are working on that (limited factor there is probably because their designs are moving so fast, they haven't been putting effort into pushing that info out).

Although if Tesla continues it's "here, have this vehicle to hold you over", for fleets that aren't doing heavily custom bodies add-ons (such stuff staying on the trailer side) and are HQ'd within range of a Tesla facility, downtime becomes less of an issue.

Ironically I expect, quite reasonably so, that for my own use normal ongoing maintenance to be much more DIY than my prior vehicles have been in a very long time. Fleet experience so far with Teslas (albeit not in the more abusive environments of "construction" and such) has maintenance costs substantially lowered. Even with Tesla's current service model. You don't have as much downtime with individual vehicles, which with ICE tend to be on a fairly regular rotation out for preventative maintenance.


EDIT: Keep in mind that the margins in this area, even with the tight competitive bidding, have a lot of slack because of the Chicken Tax.

EDIT2: I am interested to see how Tesla ends up structuring it's longhaul tractor program, that's the ultimate fleet vehicle.

 

[LCR1]

It's not just a concern for the truck in the future it's a concern for the 3, now. Again, there are 5 Services centers for the 2nd largest state in the country, 5. Total. you see no problem with Tesla pumping out 20K car a month by summer and no where to get these things serviced? Less than half the states in the country have any service centers. 9 of the states that have one, have a single center for the entire state.

Hell where are these everyday families going to even pick their cars up? Louisiana, Mississippi, good luck. Idaho, Arkansas, Wyoming, Montana, Oh, Oh Santa Fe. No? Nothing for hundreds of miles?

 

[ℬête Noire]

It's not just a concern for the truck in the future it's a concern for the 3, now.

<dude, do you even ____ meme . jpg>

"Before the truck happens, quite frankly."

Again, there are 5 Services centers for the 2nd largest state in the country, 5.

DFW Metros + Austin Metro + Houston Metro = approximate population 22mil of 26.5mil statewide (2013)

Texas is big but there's a whole lot of space here, too.

P.S. Without even looking for them, in the last week I've come across "Tesla towed my car a couple hundred miles to get serviced" stories here.

EDIT: I expect TX's fubar rent seeking laws are likely a major rub. Although I don't know how sales have been here so far to support a much larger network, anyway?

Hell where are these everyday families going to even pick their cars up? Louisiana, Mississippi, good luck. Idaho, Arkansas, Wyoming, Montana, Oh, Oh Santa Fe. No? Nothing for hundreds of miles?

?