Originally published on CleanTechnica.
Back in August 2014, I polled CleanTechnica readers on when they thought an electric car would become one of the 20 best selling cars in the USA*. (The specific question was, “When will a plug-in car break into the top 20 of monthly US car sales?”)
The most popular response (27%) was 2017, with a pretty close race on either side of that (2016 got 21% and 2018 got 22%).
I just ran across that poll again by chance, but it seems that it’s perfectly ripe for a review and more discussion.
The optimistic 6.6% and 21.2% of voters who chose 2015 and 2016, respectively, missed the mark, but the 27% who chose 2017 have a decent chance of getting the projection right.
In December, the 20th best-selling car in the United States was the Hyundai Elantra — at 19,556 sales. For the year as a whole, the Hyundai Elantra saw 208,319 sales. Could an electric car knock the Elantra (or some other car) out of the top 20 in at least one month in 2017?
Well, let’s be frank, there’s basically only one electric model that might reach ~20,000 sales in a single month in 2017 —
the BMW i8.
Okay, joking aside, it’s clearly the Tesla Model 3. As far as I can tell, no other electric car model will have anywhere close to that much demand or production capacity. The big question is whether the Model 3 will.
The two core questions to answer to say whether Tesla Model 3 deliveries in a single month will break into the US top 20 in 2017 are:
Is the demand genuinely high enough?
Will Tesla be able to produce enough cars?
Tesla Model 3 Demand
With ~400,000 reservations, it seems pretty clear that the Model 3 could technically break into the top 20 (or even reach #1**) if Tesla could produce and deliver all reserved Model 3 electric supersedans in one month. (The ~400,000 figure is a global figure, but US reservations are presumably around half of that number — or not a huge deal lower than half.) The Elantra’s ~20,000 monthly sales should be easy peasy to beat once production is rolling if Tesla can quickly ramp up production and fill initial reservations.
What actual monthly Model 3 demand will be once production begins and Tesla works through the reservations, we’ll have to wait to see, but I’ll be shocked if it’s lower than 20,000 cars. Even 240,000 cars a year seems like a low estimate for Model 3 demand — but I’m sure there are people who think I’m crazy and overly optimistic.
In any case, given the high number of reservations, it looks like Tesla Model 3 deliveries will break into the top 20 as soon as Tesla can get production rolling at a decent clip. Until Tesla can work through the reservations backlog, though, I don’t think we’ll have a clear picture of true monthly demand and thus be able to judge whether the Model 3 breaks into the monthly top 20 in spirit rather than a technicality (pent-up demand).
Tesla Model 3 Production
The big question is whether Tesla will be able to ramp up production of the Model 3 before the end of the year. Superhero and super-loved CEO Elon Musk says that’s the aim. In fact, Tesla’s goal is to deliver all of the Model 3s that were reserved before the unveiling event (at least, the US reservations — the actual statement regarding this target was not entirely clear, but all of the US reservations is a conservative reading and I think the most widely accepted one).
There were ~115,000 Model 3 reservations made globally before the unveiling event, but it’s not clear how many were in the US and how many people have canceled or will cancel before production begins. Again, trying to be conservative here, you could estimate that there are ~50,000 US reservations in that batch (I think it’s more likely there were 60,000 or more). Assuming production begins at a trickle in October, ramps up a bit in November, but then really ramps up in December (for more than half of those ~50,000 reservations), it seems that Model 3 deliveries would safely and strongly blow past 20,000 deliveries in December, and perhaps reach 30,000. But there are definitely a few big assumptions here.
Plenty of people are skeptical of (or even betting against) the implied 2017 production target. Plenty of people think Tesla will miss the target by a mile, which could put the production ramp sometime in 2018 or possibly even later.
I personally am going to trust Tesla/Elon on this one. As we discussed in May of last year, the Model 3 was designed in a totally different way from the Model S or Model X, using a “design for manufacturing” approach that is aimed at streamlining production and avoiding the kind of kinks the Model S and Model X had. Additionally, Elon has noted that Tesla is making sure it can produce all the parts in-house, just in case suppliers fall through. The point, of course, is to avoid any production delays that could be created by supplier problems (which was a rather big problem with the Model X).
The burning EV industry question of 2017 is basically whether Tesla will actually be able to ramp up Model 3 production by the end of 2017, and people have strong arguments on both sides of the debate on that topic, so we’ll just have to wait to see. If Tesla is able to achieve its target, though, I think that means it could easily jump onto the top 20 best-selling cars and trucks list in December 2017. However, even if Tesla doesn’t achieve that milestone in December (or sooner), I think it is set to do so in 2018.
USA’s Best-Selling Cars & Trucks — December 2016
In case you’re curious, here’s the full top 20 breakdown (er, top 30 breakdown) for the US in December 2016:
|16||Jeep Grand Cherokee||23,250|
*Note: My assumption is that pickup trucks and SUVs count as “cars” for this topic, but I guess my original question/poll was a little ambiguous on that front.
**The top-selling Ford F-Series saw 87,512 sales in December, which the Model 3 could theoretically beat on a technicality if Tesla could very quickly ramp up production and fulfill reservations — but that seems either unlikely or impossible.
Reprinted with permission.