Published on August 10th, 2020 |
by Zachary Shahan
August 10th, 2020 by Zachary Shahan
There is at least one major problem with regards to tracking Tesla sales — they tell us very little about Tesla demand. When we write about “Tesla sales” here on CleanTechnica (and everywhere else you see this topic discussed), we are writing about Tesla deliveries. An order is not counted as a sale until a vehicle is paid for and delivered. There are always numerous orders on the books, but we don’t actually know how many, so we don’t actually know the level of consumer demand for Tesla vehicles — in the USA or elsewhere.
Tesla CEO Elon Musk has repeatedly said — including very empathically on the last Tesla conference call — that consumer demand is not a problem at all for Tesla. It seems from his comments that there is far more consumer demand than production capacity. However, we don’t know how much more, and we don’t know how that demand is spread out geographically across the world.
When it comes to simply tracking Tesla sales (deliveries), a separate problem is that Tesla reports only global sales and does so on a quarterly basis. It does not report country-by-country sales, and it doesn’t report monthly numbers. (Though, the latter problem is now the norm in the US auto industry.)
A third problem we now face when creating these reports is Tesla combines Model 3 and Model Y sales.
I think we do have solid methods for addressing the problems noted above in order to come up with estimates of quarterly Tesla Model 3 and Model Y deliveries in the US. Data from EV Volumes on Chinese and European Tesla sales, as well as data-backed estimates from “Troy Teslike” and a few other sources, help me to come up with US Model 3 estimates that I think are quite close to reality. This doesn’t solve the problem of estimating true demand for Tesla vehicles, but it does allow us to compare Model 3 sales to the sales of other cars on the US market.
Based on these informed estimates as well as official sales data from other automakers, the Tesla Model 3 took 17% of the US small and midsize luxury car market in first half of the year, and 11% in the second quarter.
I combine small and midsize luxury cars for this analysis because the Model 3, a midsizer, is the smallest car Tesla offers. I understand the critique that small luxury cars shouldn’t be put into the same category as the Model 3 (since they aren’t in the same category), but I think that until Tesla offers a smaller vehicle, people who would prefer a “Model 2” or “Model C” compact car from Tesla often buy a Model 3. So, I think it’s more appropriate to combine these market segments for sales reports than not combine then.
As you can see, Tesla’s delivery figure and ranking dropped in Q2 versus Q1 2020, leading to a lower market share than in the first half of the year as a whole. This is partly (or largely) due to Tesla shipping more cars abroad in the second quarter. It is also because of the Fremont factory shutdown, which went well into the second quarter. Additionally, Tesla is now producing the Model Y in decent volumes, but the Model Y shares production lines with the Model 3. The more the Model Y is produced, the less the Model 3 is produced. Could Tesla have sold 27,000 Model 3s in the US in the second quarter if it wasn’t producing the Model, or if it had enough production capacity? Could it have sold 40,000? Who knows?
For the umpteenth time: we actually have no idea how closely Tesla sales match Tesla vehicle demand.
Looking at the overall car market (only cars, not SUVs, trucks, and minivans), the Tesla Model 3 was the 16th best selling car in the USA in the second quarter and was the 12th best selling car in the country in the first half of the year as a whole. This is a drop from its longtime positioning in the top 10 of US car sales.
It seems we won’t actually know how high the Model 3 can go in the ranking until Tesla Giga Texas (or Tesla Tera Texas) is built and operational. Even then, Tesla may prioritize getting the Cybertruck and Semi to market. On the other hand, Tesla Giga Berlin should be producing vehicles for Europe by then, so perhaps we will finally get a glimpse of Tesla Model 3 production matching Tesla Model 3 consumer demand. Maybe. It’s hard to estimate anything when we don’t actually have any solid insight into how many people are prepared to buy a Tesla Model 3 in the US on a quarterly basis.
On the bearish side of things, perhaps Model 3 demand is not that far off of Model 3 production. Maybe that’s why Tesla is already ramping up production of the Model Y. It typically does not take as long for a buyer to get a Model 3 now as it did when the vehicle first came to market and had a long waiting list of reservation holders. If demand was very far beyond supply, the waiting list to get one would be much longer.
That said, I still think Model 3 demand grows strongly as more vehicles get into customer hands, since word of mouth and buyers giving test drives to their friends and family members are the top drivers (no pun intended) of new consumer demand. How far that goes, given the upfront price of the car as well as the availability of the Model Y, is anyone’s guess. However, one thing I think we can say with confidence: Model 3 demand in a year or two will probably be different from Model 3 demand right now. It’s too bad we don’t have any real insight into what today’s level of demand is and probably won’t have any better insight into this topic in a year or two.
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