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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.

andy.connor.e | 30 augusti 2017

^
I second this and wait for the responses

ReD eXiLe ms us | 30 augusti 2017

7thGate: Much the same was stated by people opposed to the utterly useless new fangled horseless carriage about 100 years ago, when gas stations didn't exist, and you had to navigate from one neighborhood drug store to the next to travel cross country... I'm sure those people very smugly enjoyed their mule & buggy for decades to come thereafter, certain their decision was correct and thoroughly unassailable.

ReD eXiLe ms us | 30 augusti 2017

jordanrichard: True. That is why some people want to separate electric vehicles into a completely different pizza pie of its own, basically a mini bite-sized microwave personal pizza, then point at how small it is relative to the overall ICE market 36" ultra mega super duper supreme pizza pie. They are unwilling to acknowledge that the actual, singular, full sized complete pizza pie is for all of the world's vehicles together -- and that the slice that is for Tesla electric cars alone will by the end of 2018 be larger than the slice that belongs to Cadillac. Because if they look at it, if they see it, if they acknowledge that fact, that means they must face the reality that Tesla is here to stay.

topher | 30 augusti 2017

"My subsequent post listed the vehicles that I believe the Model 3 will outsell "

Yup, I see that now. Let's just say it wasn't clear...

Thank you kindly.

7thGate | 30 augusti 2017

@andy: True, but what we care about is actually the percentage of people who buy cars that have a dedicated parking space they can freely modify with charging infrastructure, because that is the main convenience factor. The home ownership rate is a decent proxy for that, although off in a couple of ways (you can own a home with no driveway/parking, you can rent a home but it has charging, etc).

@ReD It was probably a completely valid point in 1908 that the addressable market for the model T was not the entire country. There were plenty of people for whom it just would not work due to fueling logistics, where they could feed a horse but had no way to get access to gasoline. The fact that ford couldn't sell to everyone did not stop them from being successful, just as I don't think its really a problem that there are constraints on the addressable market for the model 3. I do find it helpful to look at those constraints when estimating how big they can get, however. 700,000 does not seem unreachable, eventually.

ReD eXiLe ms us | 30 augusti 2017

7thGate: Not only is 700,000 units per year reachable, but I expect Tesla will climb to even higher heights with the Model 3. With European and Asian assembly plants, and increasing popularity, and the public at large becoming more and more aware of the long term financial benefits of driving electric, the Model 3 could easily grow to surpass Ford Focus and Volkswagen GOLF in annual worldwide sales, while matching those of the Toyota Corolla. That eventuality will take place far sooner than many would be willing to accept.

topher: Yes. My main point in that exchange is that it will NOT require a lower price point on the Model 3, even after various incentives and benefits for EVs go 'poof' at the Federal and State level, for the car to exceed the sales numbers of many direct competitors combined. I believe the most popular less expensive cars on the market will get higher price points that close the gap between those and the Model 3.

Nexxus | 5 september 2017

The current bottle neck at the Fremont plant is the paint booth. I think I remember Elon stating on one of the earnings call (last year?) that there would be 4 Model 3 production lines total, tiering into 8 paint booths, to get the production numbers up to 10,000/week eventually. Doesn't mean they are all built now, but it wouldn't surprise me if they were and all of them were being tweaked to production standards.

Nexxus | 5 september 2017

When the Model S and Model X were being built, they were only utilizing 25% to 55% of the Fremont factory. Most of it was empty and they were using the space for an indoor test track.

bmz | 5 september 2017

700,000/yr might have been reasonable when the average M3 was expected to be $43,000. Now however, that the average M3 looks to be over $50,000, I question whether there can be that much demand at that price level.

Bubba2000 | 7 september 2017

A functional M3 needs the long range battery. AWD if living in snow country. Rest are frills. Price would be $40-50k. Charging is less of an issue with huge charging network. Add Model Y in the same price range. Total Tesla sales could match BMW.

Efontana | 7 september 2017

Sights are too low.

ReD eXiLe ms us | 8 september 2017

Efontana: It's a battle of different philosophies...

"Aim for the curb, hope for the gutter."

or

"Aim for the Stars, settle for the Moon or Mars."

It seems that the League of Lowered Expectations have convinced themselves that aiming high is guaranteed to have unfavorable results, no matter how much their own goals are exceeded by in the attempt.

Efontana | 8 september 2017

Wonder if we could move that league off their namesake a bit. Everybody wins when that happens.

ReD eXiLe ms us | 10 september 2017

Efontana: Unfortunately, the League of Lowered Expectations never, ever admits defeat or to being wrong in any way -- though they certainly demand that anyone they perceive as being among 'over-the-top optimistic' folks do so at every turn. Instead, they simply shut up, fade away, and seek the next target/victim of their doom-saying. From their perspective, the League of Lowered Expectations 'always wins' -- thus, they always declare victory and never hang around to bear the same criticism they were so apt to distribute and disseminate.

You can recognize them by the calling card of their philosophy, which typically begins...

"I just don't see..."

"I just don't know how..."

"I just don't understand..."

"I just can't believe..."

That's why I take the earliest possible opportunity to tell them, "No. You don't. And you never will."

MX is Best | 11 september 2017

I have a feeling Elon is thinking correctly on this one.

tstolz | 11 september 2017

Was at a show n shine with my MS and a friends MX in Alberta this weekend. These cars as still relatively rare here and attract lots of interest. I was stunned by how many people had M3s on order or wanted one. There is no question demand is high for the compelling EVs that Tesla is producing.

OEMs should take heed that the only thing limiting EV sales is the ability to produce compelling EVs in volume. Tesla is running away with this market.

carlk | 11 september 2017

A lot more people, including those who own less expensive cars now, will jump on the bandwagon when they realize this is a car that you can keep for many years with minimal maintenance and fuel costs and when they discover all the nice things about driving a Tesla in addition to being green. It's just the matter of how many car Tesla can produce. I see no reason why Tesla will not plan to meet the demand.

swingshiftworker | 11 september 2017

Musk thinks he can sell 700k Model 3s per year? At $35k (base price) perhaps but it's a long shot and at $50k (plus options) highly unlikely especially w/o the tax credits/rebates and favorable financing.

Most M3 buyers will probably want the options and will be resistant to buying a base model w/o them despite the "prestige" of being one of the 1st to own/lease an M3.

So, IMO Tesla will be hard pressed to sell 700k M3s per year (worldwide or otherwise) unless it is at least price competitive w/the Toyota Camry (388k sold in 2016), one of the best selling cars of all time, which sells in the low-med $20k range.

See: http://www.goodcarbadcar.net/2017/01/usa-2016-vehicle-sales-by-model-man...

Everyone is NOT willing to buy a Tesla at any price.

Just another thought, if in fact Tesla is able to sell THAT many M3s, I for one would probably NOT want to buy or lease one because if everyone's got one already, there would be nothing "special" or unique about it, especially if I have to wait and pay a premium price for it.

I bought a couple of VW Beetles in my time (which is the most popular model car ever sold) but I bought them because I was poor at the time and they were CHEAP. That certainly won't be the case for the M3.

We'll see . . .

ReD eXiLe ms us | 14 september 2017

swingshiftworker: Though the Toyota Camry has held the #1 spot in U.S. Sales of passenger cars for nigh 25 years straight, the best selling car by that brand is actually the Corolla, when looking at overall, worldwide sales. The Corolla surpassed the Volkswagen Beetle nearly 20 years ago as the 'Best Selling Car of All Time'. That was at around 19,000,000 units, and the Corolla typically sells in excess of 1,000,000 units per year now.

In its best years the BMW 3-Series sold on the order of 350,000 to 500,000 units per year worldwide. It has been possible to spend far in excess of $35,000 on a 3-Series for a very, very long time. It was, for decades, the single best selling premium vehicle both in the U.S. and worldwide.

The Tesla Model 3 will surely attract buyers who would have sought out a Corolla, Civic, Camry, or Accord before, but never would have considered an ~*ahem*~ 'upgrade' to a 3-Series, A4, ATS, C-Class, Giulia, IS, TLX, or XE. There was nothing among ICE vehicles to compel them to do so. This is not a market segment that was cultivated by BMW at all. BMW does not benefit from their patronage, and honestly didn't make a sincere effort to gain it due to a supposed air of 'exclusivity' or whatever. Ah, but Tesla will happily take on all comers with open arms. That difference in attitude is what will allow Tesla to surpass 3-Series sales by 50% to 100% worldwide with the Model 3 to eventually reach 500,000 to 750,000 new buyers per year.

The need for 'exclusivity' and 'luxury' or tradition' and 'heritage' that some convince themselves must be fulfilled may be enough to allow AUDI, BMW, Mercedes-Benz, and others to survive the coming onslaught by Tesla against sales of their respective premium 'bread-and-butter' entry level vehicles... just barely. But what Tesla owners will find 'special' about the Model 3 will be participating in history as it happens anew. Not revelling in a 100-somethingeth-year-old story that is in its final chapter. Well, that, and the long, skinny, GO pedal on the right.

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