Tesla might have just finished a record third quarter, but the electric car maker seems set to push forward with its Model 3 ramp without missing a beat. Just yesterday, Tesla registered 4,609 new Model 3 VINs, ~85% of which are estimated to be Dual Motor. With this latest batch of filings, Tesla has registered a total of 122,517 Model 3 to date.
The recent batch of Model 3 VIN filings bode well for Tesla’s continued push for the electric car this Q4. Tesla’s chances this fourth quarter has gained the confidence of some Wall Street analysts, including Romit Shah of Nomura Instinet, who noted that Tesla might have hit its break-even point in the third quarter. The analyst also noted that as Telsa closes in on production and delivery numbers of 100,000 vehicles per quarter, the company could finally reach a point where it could be sustainably profitable.
#Tesla registered 4,609 new #Model3 VINs. ~85% estimated to be dual motor. Highest VIN is 122517. https://t.co/TBGgTxH3DS
— Model 3 VINs (@Model3VINs) October 3, 2018
It should be noted that Tesla’s production ramp for the Model 3 is only partly done. Tesla eventually aims to produce 10,000 units of the electric sedan every week, and so far, the company is only producing around half this number on average. Despite this, the Model 3’s disruption of the US auto market has started becoming notable, particularly in the sales figures of rival automakers in September. The Tesla Model 3 has slowly risen through the ranks of the US’ best-selling passenger cars over the past months. This became particularly notable in August, when the Model 3 was listed by auto sales tracking website GoodCarBadCar as the 5th best-selling passenger car in the United States.
The Model 3 went up GCBC‘s best-selling passenger cars list once more in September. Tesla sold an estimated 22,250 Model 3 in during the month, beating the Toyota Corolla Family for the No.4 spot. What’s particularly notable was that with the Model 3’s rise, the sales of the three vehicles above it — the Toyota Camry, the Honda Civic, and the Honda Accord — all saw a notable dive. Looking at September’s sales figures, the gap between the Model 3 and America’s best-selling passenger cars continues to get smaller.
The Tesla Model 3’s rankings at the auto sales tracking website’s overall list also improved. Last August, the Model 3 was listed by GoodCarBadCar as the 15th best-selling vehicle in the United States. In September, the Model 3 moved up two places, ranking as the 13th best-selling vehicle in the country, in a list that includes mainstream trucks and SUVs like the Ford F-150, Honda CR-V, and the Toyota Rav4.
Tesla’s fourth quarter seems poised to take the company towards even more milestones. Gigafactory 1, the company’s expansive facility in Nevada, is set to receive upgrades in the form of three new battery cell assembly lines from Panasonic. The new lines, which were initially estimated to be completed near the end of 2018, are now expected to be finished ahead of schedule. New Grohmann machines, which are designed to make module production three times cheaper and three times faster, are also set to be operational in Q4.
The Model 3 ramp has moved forward since the electric car’s production began last year. That said, there is still a lot that needs to be done. Other variants of the vehicle, such as the $35,000 base Model 3, as well as Right-Hand-Drive versions of the electric car, are yet to enter production. Both the Model 3 in Standard trim, as well as RHD versions, are expected to hit production next year.
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My eyes deceive or are the majority of car sales down - with Model 3 an outstanding exception. Implies lot of people have either switched to Tesla or decided not to buy an ICE because they plan to buy a Tesla later. Choice is good.
The percentage chart can be a little deceiving. If you look at absolute numbers, sedans are down far more than the Model 3 is up. The Honda Accord alone is down as much as the Model 3 is up. Also if you look at trucks and SUVs, they are up. The Toyota Highlander alone is up as much as the Model 3. What these charts really show is the general shift in buying patterns from low cost fuel from sedans to trucks and SUVs. The fact that the Model 3 is growing to such highs against this trend is very impressive. And once gas prices rise again as it looks like they will over the next year or so, then we will see all EVs taking market share from from all FFV catagories. Yes, the Model three is taking some market share but it is small against the overall trend toward larger vehicles. Remember, we are talking about something around 200k Model 3 this year compared to the 18 million car market in the US.
My eyes deceive or are the majority of car sales down - with Model 3 an outstanding exception. Implies lot of people have either switched to Tesla or decided not to buy an ICE because they plan to buy a Tesla later. Choice is good.
Model 3 is up because they only built a few hundred of them last year. Car sales overall are down, but Model 3 isn't the reason for that.
It is probably true that Model 3 has taken some sales away from other brands, but likely not by very much. The Model 3s being sold now are being sold to people who pre-ordered; a lot of these people are Tesla faithful for whom the Model 3 is an additional car; they simply wouldn't have spent the money if Model 3 hadn't been there. Others will have placed the order two years ago and been holding out for the car; they may not have bought a new car in the meanwhile in anticipation of getting their Tesla, so for those buyers, their Model 3 may have taken a sale away from another vendor, but that sale might have been last year.
The sales figures are also illusory because they are being entirely covered by pre-orders; they don't reflect actual demand. That isn't to say that the demand isn't there, but the length of the wait before production ramped up means that you're effectively tapping into several years' worth of demand right now; Tesla will be able to sell as many cars as they can build until the pre-order backlog is cleared. Which means that its position in the charts right now is purely down to their manufacturing capability, rather than the car's actual market penetration.
The real test of Model 3's position in the market will come when the pre-orders have been filled and people can come in off the street and buy a Model 3 without a long wait. At that point, the vehicle's position in the chart will start to be more of a true reflection of demand.
It's also worth bearing in mind that they are not exporting any Model 3s yet (except a few to Canada), so the entire production run is being sold into the US market. When they start shipping to Europe and elsewhere, there will be fewer units available to the US market, so even assuming they can continue selling as many as they can produce, the US sales figures will come down at that point and Model 3 will drop down the charts. That won't be a bad thing, because they'll still be selling the cars; just not all in the US, but it does demonstrate that this data point is unreliable as an indicator of success.
