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Elon thinks demand could be as high as 700,000 per year

Elon thinks demand could be as high as 700,000 per year

From today's news,
Baird ascertains strong demand for the Model 3 given increasing U.S. demand in total car sales, luxury sedan sales and comparable vehicle sales. Most importantly, Kallo wrote, Tesla CEO Elon Musk thinks Model 3 demand could be as high as 700,000 units per year.

noleaf4me | 24 August 2017

Globally - number makes sense. 500k 3 series were sold a few years ago globally. Camry sells >450k in the US alone well over a million globally.

700k model 3's / year globally is completely reasonable.

phil | 24 August 2017

Does he think it could be as low as 300,000 per year?

If not, what IS the low end of his range? Without knowing that, the top end is less interesting.

phil | 24 August 2017

Does he think it could be as low as 300,000 per year?

If not, what IS the low end of his range? Without knowing that, the top end is less interesting.

ReD eXiLe ms us | 24 August 2017

noleaf4me: No. It is the Toyota Corolla that sells in excess of 1,000,000 units worldwide per year. The Camry manages in the 650,000 to 700,000 unit range instead, globally.

Strangely, the Camry and Corolla are both within the top five best selling passenger cars in the U.S., but the Volkswagen Golf is far behind them in U.S. sales, even though it is typically among the three top selling vehicles of any type worldwide.

http://focus2move.com/world-best-selling-car-in-2015/

Haggy | 25 August 2017

Right now the reservation list is long, but latent demand is hard to measure. There might be several times as many who would buy one right away if they were in showrooms for purchase, but when you tell people that there are half a million people ahead of them and they might not get the car until early 2019, it's enough to make people want to hold off. Even a six month wait could be an issue, and for anybody who can't time it with an existing lease or needs to know trade in value to figure out what options are affordable, it's a problem.

I think that once Tesla is up to 5000 cars per week and the backlog is down to 40,000 cars, then the backlog will stay that way and grow as fast as people get cars.

KP in NPT | 25 August 2017

+1 Haggy

I know several people that want the car but don't have a reservation because now they are daunted by the list.

ReD eXiLe ms us | 27 August 2017

Haggy: Very good points. But I suspect it may at some point end up being the other way around... So that a whole lot of people are just fine with a six month wait, and that the wait list doesn't get below six months until Tesla has been cranking out 10,000 units per week for a solid year. The Tesla Model 3 is going to become a whole lot more popular once they are readily visible on the streets. My guess is that in Los Angeles in particular, it will be a rather short while before Model 3 is more obviously ubiquitous than the Toyota PRIUS. By the time things get to the point where those who would prefer 'No Wait' shopping, to buy from the showroom floor, are satisfied? The Model 3 will be EVERYWHERE you look in Los Angeles.

Haggy | 27 August 2017

In mid 2014, Tesla retooled the factory and said it would allow them to double throughput. Back then, the wait grew to about 3.5 months because of the shutdown for retooling and the change to autopilot, but once things got under control, the wait became similar to what it is now. In other words, demand keeps growing and as fast as they ramp up, demand increases to make up for it. If they get up to 10,000 cars per week, a backlog of 40,000 would be only a month, and an 80,000 car backlog would still be in line with the current wait times for a Model S or X. Keeping a constant length backlog essentially means being able to make them as fast as people are buying them, or the backlog will grow or shrink. It won't go away completely because Tesla needs a buffer, plus there are parts of the world where they will send cars in batches and people have a longer wait. If there's a temporary drop in demand in the US, Tesla could make up for it with other parts of the backlog and the throughput will stay the same. With the Model 3, it will take years to get to that point, and by then I expect that there will be more models coming out.

Becoming the best selling model doesn't really mean much if Tesla can have two models that together sell slightly less than double what the best selling car is if it's from another company. That's where it gets to be a game. If Tesla decided to refer to the Model Y as a version of the Model 3 instead, it could make the Model 3 overall sales trounce anything out there, but in real life that would help nobody.

Rthughes77 | 27 August 2017

I believe the M3 price point will have to be a lot lower to compete once all tax incentives are gone. Their best bet is on the Model Y, SUV sales continue to rise and if they can bring in a Y well equipped under $50,000 that would be a winner. They have the technology but will still need a great style.

topher | 27 August 2017

"I believe the M3 price point will have to be a lot lower to compete once all tax incentives are gone. "

The tax incentives are gone. Anyone considering ordering today should not expect any (US) tax incentive. Apparently, orders are not dropping off.

Thank you kindly.

ReD eXiLe ms us | 28 August 2017

Rthughes77: A lower price point to compete with... what? The Toyota Camry? Toyota Avalon? Lexus IS? Lexus ES? Toyota PRIUS? I expect that in 2018, the Model 3 will outsell four of those -- COMBINED. And I expect that trend to continue through about 2022.

SUVs are really just replacing Minivans in the spots they previously held in Sales Charts 10-to-25 years ago. The best selling passenger cars in the U.S, remain Sedans. The long-time 'also-rans' among Sedans are losing ground to SUVs. But the best selling SUVs are from the same companies that are moving the best selling Sedans -- Toyota, Honda, Nissan, and Ford.

Haggy is correct.

Carl Thompson | 28 August 2017

@ReD eXiLe ms us:
"A lower price point to compete with... what? The Toyota Camry? Toyota Avalon? Lexus IS? Lexus ES? Toyota PRIUS? I expect that in 2018, the Model 3 will outsell four of those -- COMBINED."

No chance. The Camry by itself sells ~400k per year in the US _alone_. No chance even that the Model 3 _worldwide_ will sell more than even just the Camry in the US in 2018. Maybe by 2020 it will outsell all of the cars combined worldwide if everything goes well, though.

Carl

Rthughes77 | 28 August 2017

@Red eXiLe ms us The Toyota Camry? Toyota Avalon? Lexus IS? Lexus ES? Toyota PRIUS? I expect that in 2018, the Model 3 will outsell four of those -- COMBINED. And I expect that trend to continue through about 2022.

Dude you really need to lay off that Tesla Kool-aid....Do you have any idea what it takes to produce that many vehicles?

Remember Tesla has only one dedicated assembly line for Model 3 production at Fremont, to produce that many vehicles they would need to magically have new assembly plants appear in 2018, I guess you think they can turn a knob and increase the line speed, you might want to put that medical Marijuana down also.
Please don't tell me they have robots and a secret sauce manufacturing process, that makes vehicles easy to produce.....it doesn't work that way in the real world

Well let me bring you back to the real world of what it takes for Tesla to produce just 10,000 vehicles a week
Production would be 6 days a week
21 Hours a day ...gotta give the workers lunch and breaks
79 vehicles per hour
No automotive manufacturers in the world that I know of produce that many vehicles off 1 dedicated assembly line
Yes I know they have robots

noleaf4me | 28 August 2017

@Rthughes77 - a second plant will be built soon....likely in Asia (China) They may also announce a second US plant soon -- hopefully in the Southeast.

Carl Thompson | 28 August 2017

@noleaf4me:
"a second plant will be built soon....likely in Asia (China) They may also announce a second US plant soon -- hopefully in the Southeast."

And those plants which have not been started will be built in time to make a difference for 2018 (4 months from now)?

Carl

Rthughes77 | 28 August 2017

Carl.......thank you.....it's seems I'm the bad guy on here for pointing out reality
I want Tesla to survive......but the numbers people throwing out are unrealistic with their capacity as it is now.
6000 to 7000 M3 a week is achievable in 2018 if everything goes great

noleaf4me | 28 August 2017

This was sales for the Camry in 2015:

5th Place: Toyota Camry (754,154 sold)

Corola was well over 1 million:

1st Place: Toyota Corolla (1,339,024 sold)

Here is the link:

http://driving.ca/toyota/corolla/auto-news/news/the-top-10-best-selling-...

700k Model 3's / year is feasible.....they have no real competitors at this time...

ReD eXiLe ms us | 28 August 2017

Rthughes77 inquired rather demandingly, "Do you have any idea what it takes to produce that many vehicles?"

2016 U.S. Sales
101,340 ___ Toyota PRIUS
_58,299 ___ Lexus ES
_48,090 ___ Toyota Avalon
_37,289 ___ Lexus IS
244,018.....Total

OK, sure... Even my current best case scenario shows only about 216,000 of the Model 3 reaching U.S. buyers during 2018. Apparently more people are interested in the Avalon and IS than I thought. But, I do expect that interest will begin to wane as the Model 3 becomes more visible to the public at large. So, there is still a chance that even at 200,000 units, the Model 3 could outsell those four cars in 2018. But 2019? There is no doubt, the Model 3 will blow those cars out of the water entirely in U.S. sales.

ReD eXiLe ms us | 28 August 2017

Through the first five months of 2017, the PRIUS is down by -10.7% compared to 2016 U.S. sales. The Avalon is similarly faltering, at -29.0% compared to the same time period in 2016. The ES is down -25.0% and the IS is behind by -28.8% compared to 2016. If this trend continues, the Tesla Model 3 will definitely outsell them all, combined, in 2018 as I predicted.

KP in NPT | 28 August 2017

@Red I totally buy in to competitors sales being down specifically because of the Model 3. They are holding out on their car purchase waiting for it. They must know this.

EinSV | 28 August 2017

I think the 700,000 number is a conservative/lowball estimate, like when Elon predicted Model S target was 20,000 per year. It is triple that now. Most people don't reserve a car they can't even test drive a year or two in advance. 455,000+ reservations is just the tip of the iceberg.

topher | 29 August 2017

@Red Exile: "244,018.....Total"

You forgot the Toyota Camry.

"with... what? The Toyota Camry?"

388,618 for a real combined total of 632,636

2018 when they are going to start near 5,000 per week, and hope to get to 10,000 per week; no way are they making 630,000 cars. The math doesn't work, forget the production hell.

Thank you kindly.

PhillyGal | 29 August 2017

In March of 2016 I was considered very wrong, fanboy-ish and blindly optimistic for assuming there might be 50-100k reservations for Model 3 within the first week.

There were 115k the first day BEFORE the prototype was even shown. Never underestimate Tesla.

bmz | 29 August 2017

You can't project model three sales by looking at the sales of cars whose average price is in the $20,000s or $30,000s. The average price for an M3 will probably be in the $50,000's

PhillyGal | 29 August 2017

@bmz - Nor can you assume people will only buy a Tesla if they were in the market for a gasoline car of the same sticker price.

Raise your hand if your Model S or X was triple the price of the car it replaced. ::Raises hand::

andy.connor.e | 29 August 2017

It depends how many people want the new technology over what they currently have. Some people might not want to deal with the charging station scarcity. Its possible the convenience of filling a gas tank in 30 seconds is the deal breaker. We'll have to wait and see.

Octagondd | 29 August 2017

hmm. I fill mine in 10 seconds. Grab charge cord, plug in (5 seconds). Grab charge cord, unplug (5 seconds).

andy.connor.e | 29 August 2017

Except the fact that the plugging in and unplugging time does not include a full battery charge from zero. Nice troll

Octagondd | 29 August 2017

I sleepy troll.

Octagondd | 29 August 2017

I also hungry troll and poopy troll on long troll journeys.

Shock | 29 August 2017

Lots of people are still scared to death of range anxiety. $40k for a car and it only goes 200 miles and then has to spend hours charging again? At that point alone most people are already not listening to the next thing you say. I've spoken to people who work in tech and they still hate the idea of electric cars because they can't easily road-trip them.

On the other hand, tesla has sold a ton of very expensive cars. Their brand is lusted after. Even my pre-teen daughter when I said I was still considering a leaf was disgusted. She watches these ridiculous youtube videos and all the clowns on there who make $2M/year for talking about nothing are driving lamborghinis and teslas. So don't underestimate that badge on a car. It's why mercedes and BMW are even things. Prestige still demands a huge premium and tesla is a prestigious brand.

andy.connor.e | 29 August 2017

People spend money because they can afford to. Not because its necessary. Remember that.

finman100 | 29 August 2017

it's just stupid to say 30 second gas fill. Come on! THAT is BS and u know it. HOURS to charge? what, are u a Lexus ad? Supercharger visits are 30 min. Please try again.

andy.connor.e | 29 August 2017

Finman.....

If you use supercharger as your only source of charging then you are correct. If not, then its hours. Dont think so one-directionally....

ps. 30 min for 80%.

Octagondd | 29 August 2017

This troll travel 840 mile (1350 km or 4,640,328 troll toe) per month and only use 3 minute 20 second (200,000 ms or 200 leaf falls) of troll time.

topher | 29 August 2017

"the convenience of filling a gas tank in 30 seconds is the deal breaker."

Please post a link of a video showing a 30 second fill of a gas tank, or you are the troll you accuse other of being.

Thank you kindly.

andy.connor.e | 29 August 2017

I need to post a video? Next time you fill your gas tank, start a stop watch when you start filling. And do the math of seconds/gallon. Please man.... please...........

andy.connor.e | 29 August 2017

https://w ww.quora.c om/What-is-the-flow-rate-of-gasoline-station-fuel-dispensers-in-liters-per-second - many different places to find this. or DIY.

10 gallons per minute. Cook yourself some victory cookies, with some "Significance sprinkles". in my horrid guess, it turns out im wrong. in an ever-so-unlucky 30 seconds per 10 gallons off. shame.... i must be the Brooklyn Bridge troll.

Octagondd | 29 August 2017

uh oh...troll forgot to pay bill. Now use 3 minutes per month to travel 840 mile.

rxlawdude | 29 August 2017

See, what some don't recognize is that "slow" AC charging that takes hours, does so while I lounge, eat and sleep.

Can you fill your gas tank while sleeping?

andy.connor.e | 29 August 2017

rxlawdude

its a good point, but not everyone has access to a charger at home. Some live in apartments without a charger on premises.

Octagondd | 29 August 2017

troll bad math now 4 minutes per month or 240 leaf falls

rxlawdude | 29 August 2017

@andy.connor.e,

That's true, and for them the issue is infrastructure. Tesla was very forward thinking with the strategy of Superchargers (and destination chargers). Other manufacturers are talking about developing their infrastructure for travelling far in their EVs.

Sadly, we wind up with Balkanization of the infrastructure:
Tesla SpC, not compatible with anything else
CCS, not backward compatible with any J-1772 EV, no Tesla adapter for compatibility
CHAdeMo, not backward compatible with any J-1772 EV; Tesla adapter available.
J-1772 Level 2 up to 12kW, Compatible with most EVs, but very few can take 12kW (and very few offering 12kW).

Lack of a national standard will cause continued resistance (pun intended) to EVs.

andy.connor.e | 29 August 2017

its only a matter of time. i will find a way to make it work until those times come.

7thGate | 30 August 2017

Personally, I would never get an electric car without dedicated, retail rate electricity charging where I park my car with today's current infrastructure. The hassle of finding chargers is high, and the cost becomes much closer to or even greater than gasoline once you factor in profits/real estate costs for the charger.

If you -do- have home charging capability, which describes the approximately 2/3 of the country that owns a home, then the charging becomes largely a non-issue unless going on extended trips as it takes like 10 seconds a night. Some percentage of people will routinely drive long distances such that the time spent supercharging is a significant factor, or have to drive long distances to places not covered by superchargers. Some additional percentage of people won't be able to realistically afford a $35,000 car, but there is a strong correlation between owning a home and being rich enough to afford a car in that price range, so it probably doesn't actually exclude that many people that were not already being put off by charging problems.

The total addressable market should end up being something like a third of car sales, I would guess. Then you have to compete with everyone else in that market space based on the quality of the product. I could see 700k pretty easily coming out of that.

andy.connor.e | 30 August 2017

7thGate

That percent of people that own a home is incorrect. The 2/3 comes from the occupation percentage. Or, the total number of houses that have someone living in them, divided by the total number of houses that exist.
htt ps://en.wikipedia.o rg/wiki/Home-ownership_in_the_United_States

jordanrichard | 30 August 2017

With everyone throwing sales figures around and arguing over how many Model 3s will sell, bla, bla, bla. A couple of things people are forgetting. One, the Freemont plant can make 500,000 cars per year. At least it could back when GM/Toyota owned it and since then there have been great improvements in manufacturing. Two, there are only "x" number of people buying new cars and those buyers are divided up by the hundreds of models out there. So what, the Camry sold whatever number of cars last year, what as they are being called Fanbois are saying is that a large portion of those Camry buyers will jump ship and buy the Model 3. They are not saying that the Model 3 will sell 500,000 cars in addition to the 700,000 or whatever Camrys are sold.

No matter how many slices you cut a pizza into, it doesn't change the size of the pie.

ReD eXiLe ms us | 30 August 2017

topher: I did not 'forget' the Camry at all. Go back to my previous post. I said the Model 3 would outsell four of the five cars I listed combined -- not all of them. My subsequent post listed the vehicles that I believe the Model 3 will outsell -- combined.

ReD eXiLe ms us | 30 August 2017

andy.connor.e mused, "Some people might not want to deal with the charging station scarcity."

What matters is that even with the multitude of gas stations on hand, a lot more people will buy the Tesla Model 3 than will get the Alfa Romeo Giulia or Jaguar XE.

ReD eXiLe ms us | 30 August 2017

Shock declared, "At that point alone most people are already not listening to the next thing you say."

Most people buy used cars. Tesla sells new cars. They have no significant interest in the 'most people' market. At no point did they set a goal of selling to 'most people'. I'm pretty sure that traditional automobile manufacturers such as Acura, Alfa Romeo, AUDI, BMW, Cadillac, Chrysler, Infiniti, Jaguar, Lexus, and Mercedes-Benz do not concern themselves with offering vehicles that appeal to 'most people' either. So please explain why Tesla should endeavor to please 'most people' as a primary motivator, and why that would validate their existence. Afterward, please elucidate why such validation is not necessary for companies that sell products in the same price range.

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