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

[LCR1]

Have they quit making the Model X? I hadn't heard. And they better be making the Model 3 because they've already taken my money for one, and even given me a VIN.

The X is classed as an SUV, but the same would apply when comparing it to the X series from BMW . The Model 3 isn't sold in europe where the article is from. Also, the 3 doesn't compete in any of the classes the article is talking about, but again the same will apply when people start comparing it to BMW 3 sales or what ever. When the q(ueue) opens how many people that trade in their Accord or Volt or Leaf for a M3 were also in the market for a BMW? Are you really going to start saying Telsa is crushing the mid-size luxury market because they sold more M3 than MB C-class? How many people buying a $35K M3 were also in the market for a Audi, BMW, etc?

 

[EinSV]

People seem to forget that Tesla only makes one car. The S. Until last year, when the bolt came out, if you wanted an electric car with more than 100 miles of real range your only option was the S. I would never in my life consider buying an MB Sclass or a BMW 7 Series, NEVER. However, simply because I bought an S, I was automatically thrown into that demographic. That applies to every single person that wants to buy a long range electric vehicle no matter what they drove before or since, if they buy a Tesla they are thrown into that class of buyers. You're comparing two completely different categories.

Look at the sales of the 7 Series in Europe like your article does, the numbers have gone up. Same with the S-class from MB they have been selling more cars since the Model S came out. So how is it Tesla is stealing all of these sales from luxury cars if the two are actually selling more cars? People aren't making a mass exodus from luxury brands to Tesla luxury cars, they are coming from everywhere for Tesla electric cars.

I agree that “people ... are coming from everywhere for Tesla electric cars.” If you look at threads asking Model 3 reservationists what car they are coming from that is absolutely the case. Model 3 is attracting all sorts of customers — people coming from BMW, Audi, Mercedes, Honda, Toyota, Subaru, Hyundai, GM, Ford, FCA, etc. and from every type of vehicle imaginable — performance cars, hybrids, econoboxes, EVs, clunkers, luxury cars, etc.

That is one reason demand is so high — the Model 3 appeals to many people for different reasons — performance, handling, tech, economy, design, environmental factors, or a combination.

 

[ℬête Noire]

It is ambitious, but ~500K reservations is nothing to sneeze at. And beating Mercedes, BMW and Audi at the high end of the market in their own backyard (plus the US) isn’t either. Tesla Model S outsells German luxury flagships in Europe Especially when you’ve only been making cars in volume for 5-6 years.

I mentioned the Camry because that's a full step down the price-point scale of midsize sedans, having largely volume of sales, to get to that sort of volume at the top. The two lines only marginally intersect at the top of the Camry price range and bottom of M3's price range, even factoring in total ownership costs.

Someone put it another way, 700K is around the sum of the current top two worldwide in "luxury midsize sedan". To hit 700K/year there would be decimation of the competitors, especially in the years going forward if the M3 holds up to the promise of longer lifespan, to carve that size of sales out of there. So maybe they do something like what they did in the thinner full-size luxury sedan market. Domination wouldn't be too strong a word for that, blood would flow on balance sheets across the industry.

That brings up the lifespan issue, too. How many M3 owners will engage in the typical new car buyer "once every 3 years - 5 years" purchasing? Those buyers are traditionally an important part of the automotive industry, cycling their prior cars into the used market. That won't make much impact until about 4 years out but I expect Musk isn't thinking hitting 700K/year demand before then, anyway.

 

[daniel]

The X is classed as an SUV, but the same would apply when comparing it to the X series from BMW . The Model 3 isn't sold in europe where the article is from. Also, the 3 doesn't compete in any of the classes the article is talking about, but again the same will apply when people start comparing it to BMW 3 sales or what ever. When the q(ueue) opens how many people that trade in their Accord or Volt or Leaf for a M3 were also in the market for a BMW? Are you really going to start saying Telsa is crushing the mid-size luxury market because they sold more M3 than MB C-class? How many people buying a $35K M3 were also in the market for a Audi, BMW, etc?

But your post (not an article, your post) said that Tesla is only making one car. Tesla is making three cars. Two are sedans and one is an SUV. One of the sedans is very new, but they are making it. Three cars. Not one. Doesn't matter who is competing with what, or what's available where. Tesla is making three cars. Count 'em: Three. Not one.

 

[LCR1]

But your post (not an article, your post) said that Tesla is only making one car. Tesla is making three cars. Two are sedans and one is an SUV. One of the sedans is very new, but they are making it. Three cars. Not one. Doesn't matter who is competing with what, or what's available where. Tesla is making three cars. Count 'em: Three. Not one.

In Europe, where the article is written and where the market numbers come from, and in Europe which my post was referring to because I was referring to the article, Tesla makes one car and one SUV. One car, count 'em: One. Not Three

 

[daniel]

In Europe, where the article is written and where the market numbers come from, and in Europe which my post was referring to because I was referring to the article, Tesla makes one car and one SUV. One car, count 'em: One. Not Three

What article? What does Europe have to do with anything? Here's your exact words:

People seem to forget that Tesla only makes one car. The S.

So according to you an SUV is not a car? I look at a picture of a Model S and a Model X and I can't tell the difference. They are both cars.

You did not say "According to an article from Europe, Tesla only makes one car in Europe." You said:

People seem to forget that Tesla only makes one car. The S.

And anyway, Tesla does not make one car in Europe. Tesla makes no cars at all in Europe. Tesla cars are made in California, in the U.S. And they make three of them, the S, the X, and the 3. And even if you really insist that the Model X is not a car because you don't regard an SUV as a car (they actually call it a crossover, not an SUV) that still leaves us with TWO cars that Tesla makes. So Tesla makes three cars by my count, or two cars if we use your definitions. And either way, your statement that

People seem to forget that Tesla only makes one car. The S.

is just plain wrong. And not just wrong, but patently, obviously, clearly wrong.

 

[LCR1]

What article? What does Europe have to do with anything? Here's your exact words:

Notice the post and article I quoted specifically states "Europe"

So according to you an SUV is not a car? I look at a picture of a Model S and a Model X and I can't tell the difference. They are both cars.

You did not say "According to an article from Europe, Tesla only makes one car in Europe." You said:

According to Tesla the X is an SUV, an SUV is not a car; just like a truck is not a car, nor is a van a car. Nor are a car, truck, or van an SUV.

And anyway, Tesla does not make one car in Europe. Tesla makes no cars at all in Europe. Tesla cars are made in California, in the U.S. And they make three of them, the S, the X, and the 3. And even if you really insist that the Model X is not a car because you don't regard an SUV as a car (they actually call it a crossover, not an SUV) that still leaves us with TWO cars that Tesla makes. So Tesla makes three cars by my count, or two cars if we use your definitions.

Telsa seems to think they make cars in europe

Tesla Motors Opens Assembly Plant in Tilburg, Netherlands

Tesla itself calls it an SUV (see photo above or link below)

The Best Electric SUV - Model X | Tesla

pretty strange to label and advertise something as "the best electric SUV" if they don't really consider it an SUV

And either way, your statement that



is just plain wrong. And not just wrong, but patently, obviously, clearly wrong.

Just because you don't like something doesn't make it wrong. The article I quoted specifically mentions Europe, Telsa specifically markets the S as a "car" and the X as an "SUV"

 

[EinSV]

I mentioned the Camry because that's a full step down the price-point scale of midsize sedans, having largely volume of sales, to get to that sort of volume at the top. The two lines only marginally intersect at the top of the Camry price range and bottom of M3's price range, even factoring in total ownership costs.

Someone put it another way, 700K is around the sum of the current top two worldwide in "luxury midsize sedan". To hit 700K/year there would be decimation of the competitors, especially in the years going forward if the M3 holds up to the promise of longer lifespan, to carve that size of sales out of there. So maybe they do something like what they did in the thinner full-size luxury sedan market. Domination wouldn't be too strong a word for that, blood would flow on balance sheets across the industry.

That brings up the lifespan issue, too. How many M3 owners will engage in the typical new car buyer "once every 3 years - 5 years" purchasing? Those buyers are traditionally an important part of the automotive industry, cycling their prior cars into the used market. That won't make much impact until about 4 years out but I expect Musk isn't thinking hitting 700K/year demand before then, anyway.

My starting point is the number of reservations, which are probably somewhere in the neighborhood of 500K. As reference points, Model S reservations were approximately 13K a few months after Model S launched, and Model X reservations were about 30K when it launched. Tesla Model S Wins One of Automotive Industry’s Highest Honors: Motor Trend 2013 Car of the Year
Tesla Model X Reservations Reach All Time High in September

Last year, Model S sales were about 55K (~4 times higher after ~5 years). Model X sales were 46.5K so about ~1.5 times higher only 2 years after launch.

While there are obviously differences (esp. to Model S, as Tesla was largely an unknown commodity at the time) this provides some corroboration for the common sense notion that there are far more customers who will buy the car when it can be delivered quickly and is available to test drive than customers who are willing to order a car online that they (1) have never seen in person, (2) never had the opportunity to test drive, and (3) have to wait two years to receive.

As far as the sales figures for the Camry and more direct competitors to the Model 3, based on the reservations and early reviews I do expect something along the lines of what we have seen with the Model S -- that Model 3 sales will dominate sales of the BMW 3/4 series, Audi A4, Mercedes C-class, etc. in key markets. This will definitely significantly impact the sales of these cars, although it may not completely decimate them because the Model 3 appeals to a wide range of customers and Tesla will likely take customers from all of the major legacy manufacturers, including Toyota, Honda, GM, etc. The impact will be spread out so it will not be felt as much by any one manufacturer.

As far as the lifespan issue, while the Model 3 should be much more durable than ICE vehicles, the pattern with the Model S is that Tesla continually innovates so the Model S in 2018 is much more compelling than it was in 2012. Not surprisingly, many customers trade in their older Model Ss for new ones. As with the Model S, continuous innovation should lead to better performance, new features and creature comforts that over time will not only bring in new customers but cause existing customers to trade in for newer models.

It is easy to underestimate the impact of technological changes over the long term. IMO, we are now at the tipping point where the Model 3 outcompetes similarly priced vehicles on most metrics customers care about, and also is far cleaner which is important in most parts of the world. I don't think ICE vehicles can compete, and that is going to show up in sales figures as soon as Tesla can ramp production. I believe this is clearly demonstrated by the massive number of reservations. And I don't believe there is any competition for the Model 3 on the horizon that will slow it down.

So while the actual figures are guesswork, I would not be at all surprised to see Elon's 700k/year estimate prove to be conservative.

PS This ignores the massive advantages of EVs over ICE once self-driving is available due to lower fuel and maintenance costs.

 

[daniel]

There's also the infrastructure spiral: Nobody will build chargers when there are no EVs to use them, but most people won't buy an EV unless there are chargers. But now that EVs are starting to penetrate the market, there will finally be incentive for people to install chargers, and that will make EVs more attractive to more people. The Tesla supercharger network is jump-starting this, and soon the private sector generally will start to get in on it. Somebody puts a charger on a secondary road and suddenly that road becomes usable for EVs, and more EVs lead to more people installing chargers. A few EVs create a demand for destination charging at workplaces, and once the chargers are installed more of the people who work there will find it practical to get an EV.

There's going to be a positive feedback spiral that will make EVs more attractive to more people. And that will lead to more car makers getting into the game, and more people driving EVs, which will increase visibility and get more people thinking about them and more car makers getting more serious.

The future is knocking on the door, and it's electric transportation fueled by sustainable electricity. An EV can run on electricity from coal or from sunlight. An ICE can only run on petroleum. More electric cars make solar and wind more attractive.

All we have to do is avoid suffocating ourselves on stinker fumes before we've completed the transition. If we can manage that, the ultimate demand for electric cars is "all of them."

 

[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.

LOL was not far off the actual prediction from tesla self at this moment xD actual prediction of tesla is now between 500K an 1M every year.