Tesla Annual Sales To Hit 500,000 In 2020?

3 years ago by Eric Loveday 32

Chart Via InsideEVs Content Partner Motley Fool

Chart Via InsideEVs Content Partner Motley Fool – Source: Tesla press releases and comments from management, particularly those of Tesla CEO Elon Musk in an interview with Automotive News earlier this year.

Motley Fool has assembled this chart, which shows projected Tesla annual sales volume worldwide.

As the chart clearly shows, Tesla sales will explode once Gen 3 hits the market.  Few dispute this looming sales explosion.

What we’re not so sure of is the timeline.  We predict Gen 3 won’t launch until late 2017 or early 2018.  Gen 3 derivatives (convertible, crossover, sports car) likely won’t arrive until the Tesla Model S gets its redesign.  Missing from the chart in the second-generation Tesla Roadster, which we think will arrive in 2022.

The specifics of the chart don’t matter all that much.  We’re inclined to agree that as long as Gen 3 arrives by 2018 or so at the price point that’s been promised ($40,000-ish), then 500,000 units sold in 2020 seems achievable to us.  Sure, it’s a lofty mark and a long ways off, but if anyone can do it, it’s Tesla who will get it done.

Source: Motley Fool

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32 responses to "Tesla Annual Sales To Hit 500,000 In 2020?"

  1. Mark B. Spiegel says:

    >>Few dispute this looming sales explosion.<<

    In the immortal words of John McEnroe: "You can't be serious!" Plenty of people (including I) "dispute this"– it's why the company has 25 million shares sold short. We think Tesla will be a "niche within a niche" as all of the majors roll out long-range electric vehicles of their own by later this decade (there are plenty of stories out there if you look for them) and Tesla encounters margin & market-share crushing competition.

    1. protomech says:

      Generally support Tesla, but I have to agree here.

      Model S sold 22k in 2013 – largely in the US.

      Now that we’re in the second full year of sales, it’s reasonable to assume that we have exhausted the pre-order sales surge in the US and are operating with relatively sustainable sales.

      Tesla predicts 35k total sales world-wide this year, including pre-sales in Europe and China. Before supply constraints for Europe/China kicked in, monthly US sales seemed to average around 1200/month in H2 2013/H1 2014. US owners buy about half of the world’s EVs, which suggests around 30k/year total worldwide demand for the Model S once pre-sales are fulfilled through 2015.

      2015 should see a handful of events to increase sales:

      * Model X delivers in volume. This will introduce another round of pre-sales fulfillments, which should keep Tesla’s sales high through 2015.

      * AWD for Model S and 100-110 kWh battery packs (300+ miles of range). Some early owners may upgrade their 2012 or 2013 S at this point, which should also pump up a secondary market for used Model S vehicles.

      * Expanded Supercharger networks across the US, Europe, and China.

      Tesla increased the assembly line that will produce both S and X to 1000 units/month. With the above events in mind, they can probably keep this line humming through 2015. 75k units in 2015 seems aggressive though; setting pre-sales aside for a moment, Model X is unlikely to double the 30k/year total worldwide demand. Surely some number of sales will be Model S conquests.

      What about 2016 though? Tesla will be ramping up for Model 3 production. It’s possible that Tesla may hold AWD or larger S battery packs back to 2016 if their production lines are full with S and X demand as-is, but 100k units/year seems optimistic.

      When Model 3 hits in 2017? They’ll sell all they can build no doubt..

      1. protomech says:

        Another interesting question is when Tesla will reach 200k units sold which will trigger the sunset of the federal EV subsidy.

        Through 2014, Tesla should have sold around credit-qualifying EVs in the US.

        Assuming half of Tesla’s total production goes to the US, through 2015 this will increase to 65k to 77k total sold (my numbers vs Motley Fool’s numbers).

        I predict around 60k total vehicles sold in 2016 after increasing the assembly line to 1200 units/week. Through 2016 then total US credit-qualifying vehicles should reach 95k to 150k (again, my numbers vs Motley Fool’s numbers).

        Assuming Model 3 production begins in Q1 2017, the first few quarters of Model 3 production should be eligible for the full federal tax credit .. which will reduce the effective price of the base Model 3 to $28k assuming Tesla hits its target of $35k pre-subsidy.

        It’ll be interesting to see how Tesla manages the transition away from subsidies. Since they will surely sell as many as they can make in the first few quarters, I wouldn’t be surprised if the pre-subsidy Model 3 sales had a much higher average-selling price (and higher margin for Tesla) to make the most benefit from the subsidy .. either through initial production of a higher trim line or battery line (if more than one battery size is offered).

        The federal tax credits begin to phase out over 1 year, beginning the second calendar quarter after the quarter in which the manufacturer has sold a total of 200k vehicles in the US. So if Tesla reaches this volume target in (say) Q4 2017, the full tax credit will be available through Q1 2018, 50% credits will be available in Q2-Q3 2018, and 25% credit will be available in Q4 2018 and Q1 2019.

        Depending on where Tesla’s sales fall in the quarter, there might be a temptation to game the system by selling just under 200k vehicles at quarter close..

        1. TomArt says:

          The subsidy question for Tesla is an interesting one, but it won’t take effect that quickly. I still say that Model III deliveries will begin in Q2 of 2018, so they have some breathing room.

          1. Jay Cole says:

            I’ve got a dollar that says once one of the OEMs (whoever that may be) gets close to 200k (or the US closes in on that million EV thing) that the whole program will be given a sunset date pretty quick.

            Besides, the government doesn’t need a lot of motivation to collect tax money…especially once a few of the OEMs themselves (specifically GM, Nissan, Tesla and Ford) start taking about anti-competitive policies.

            1. TomArt says:

              That is possible – Toyota, Honda and Ford produced hybrids beyond their respective sunsets while other automakers made a few half-hearted attempts or never bothered until more recently. I don’t even know if the hybrid tax credits are still around.

              If that trend continues, then the first three that will meet their plug-in quotas will be Tesla, Nissan and BMW, not necessarily in that order.

            2. evnow says:

              I think it equally likely that the program will be extended for everyone and given a particular end date. Nissan/Tesla/GM will argue that they are being punished for being pioneers.

    2. TomArt says:

      Tesla already has competitive margins! Their margin on Model S, last I read, was over their targeted 25% – that’s the type of margin that Porsche commands!

      Given design and assumed pricing increase over Model S, Model X will have the same margin.

    3. TomArt says:

      25 million shares sold short demonstrates nothing beyond the fact that a substantial number of investors are too busy being conventional, and thus lack the intelligence and vision to invest better.

      Furthermore, short-selling is gambling, not investing, so if I had it my way, it would be illegal (or at least taxed to hell and back).

  2. Alaa says:

    Com on fellows, Elon said that by 2015 they will be producing 100000. So to think that it will take them 5 years to make 500000 it unrealistic. I would say that it will take the 2 more years after 2015 (i.e. 2017) and they will be making half a million cars, that is if they do NOT have another factory some where else in the world. I suspect that they will have another factory before 2020, thus they will be making and selling more that 500000 long long before 2020.

  3. Benz says:

    The delivery numbers in this chart are not too high, they actually are conservative. Customer Deposits are the key to understand this.

    The total amount of Customer Deposits at the end of each quarter indicates the demand for Tesla EV’s.

    A reservation and a deposit is required before one can buy a Tesla EV (except in the case of a loaner car). Therefore, we can say that the total amount of Customer Deposits at the end of each quarter gives a pretty good indication of how the demand for Tesla EV’s is developing as the quarters and years go by. The past three Shareholder Letters showed this trend:

    Q4 2013 – December 31st, 2013: $163M+
    Q1 2014 – March 31st, 2014: $198M+
    Q2 2014 – June 30th, 2014: $228M+

    This total amount (at the end of each quarter) decreases with all the deposits that were already made prior to the last day of the previous quarter, for the cars that get delivered in that concerning quarter.

    This total amount at the end of each quarter increases with all the deposits made in the concerning quarter for the cars that still have to be delivered in the next quarter (or even later).

    Future development of the total amount of Customer Deposits at the end of each quarter will depend on a few factors, and the four most important factors are:
    – primarily, the number of different Tesla EV’s that people can choose from (currently that is Model S and Model X);
    – and secondly, the geographical expansion (more countries = more reservations) of Tesla Motors;
    – and thirdly, the period of time inbetween making a reservation and getting the Tesla EV delivered.
    – and finally, the amounts that will be invested in the coming years in expansion of the production capacity, the Supercharger network, the Service Centers, and the Stores.

    I firmly do believe that the demand for Tesla EV’s is going to go viral at some point in the near future. And we surely can get a clear indication for when this will happen. We will just have to keep an eye on the future development of the total amount of Customer Deposits (at the end of each quarter).

    I am pretty sure that the total amount of Customer Deposits (at the end of each quarter) will increase to about $1B at some point in time during the current decade (before 2020).

    1. Mark B. Spiegel says:

      @Benz, re. your “deposit analysis”:

      Once a Model S is destined for China (after it’s built but before it’s shipped) Tesla requires an additional $40,000 deposit to pay shipping, taxes and import duties. Thus, if there were (say) 1000 cars en route to Chinese delivery as of June 30th the deposits would have been inflated by $40 million, and thus would have actually been $10 million LOWER than they were at the end of the previous quarter (despite the supposed increase in Model X deposits over that time).

      1. Aaron says:

        Look, I know your company is shorting TSLA, but don’t spread FUD. There is no such a delivery deposit.

        1. Mark B. Spiegel says:

          Hi Aaron,

          Here’s a Google translate of the language on the Chinese site, along with a direct link. You can apologize to me in your next comment:

          >>Order Model S needs to pay RMB 15,000 deposit. China’s official arrival in the vehicle three weeks, require you to pay a sum of RMB 250,000 advance payment for vehicles produced pre-tax satisfied.<<
          http://bit.ly/V1Zsvb

          1. Chris Umiastowski says:

            Mark, it’s not a very clear translation and it references a 3-week time frame. I don’t read the language, and I haven’t bothered to ask someone who can properly translate it. Have you?

            For all we know perhaps this extra fee is paid 3 weeks in advance of delivery to the customer, which hardly sits on the balance sheet very long!

            Unless you have better info, this is FUD.

  4. 2EVnogasdriver says:

    Has someone considered that. NO OTHER car manufacturer has an option to FUEL the car for NO ADDITIONAL moolah for life and THAT started to BUILD a fueling infrastructure? How could any of them compete with TESLA? If they would start taking deposits in securitized TSLA shares I would jump in line. Bet a few shares might pay for the car.

    1. TomArt says:

      Quite a few people have paid cash for their Model S thanks to early investments in TSLA stock.

  5. Surya says:

    Just saw a video today which had some news I haven’t seen anywhere else, so I’m doubting the acuracy:

    – 2015 Model X
    – 2016 Model III (they show a smaller version of the Model S)
    – 2018 Model C (they show a VW Up type car with Tesla nose – quite ugly)
    They also state a Model R (= roadster) is planned for the same time as the Model III

    That timetable will not be followed if you ask me, but if they can pull off the current schedule (Model III in 2017) and follow that with a European size (B class) hatchback a couple of years later, that 500k should be possible.

    1. TomArt says:

      That’s a bit crazy. I’ve been following Tesla closely since early 2008, when the Roadster was actually becoming a reality. There have not been any serious discussions of vehicles beyond the Gen3 platform, except for Musk’s talk about an electric pickup (F-150-like), which is going bigger, not smaller, than the upcoming Model III.

      And, yeah, the Model III will begin deliveries in Q2 of 2018 – anything earlier will be a pleasant surprise.

      Unless their resources expand considerably, it will take them until 2022 to deliver the new Roadster (on Gen3 platform), nevermind the SUV/CUV that will also share that platform.

      1. Surya says:

        Well, there have been sketches for the model C, and Musk has stated that at some point in time there will be a second gen Roadster. But other than that I really wonder where the info in that video came from.

        1. Surya says:

          Turns out this news comes from AutoBild, and most items have since been published in articles on this site.

  6. ffbj says:

    If have been shorting Tesla over the last few years you have gotten killed. I am sorry to see anyone lose money but shorting Tesla has been just about the worst thing you could have done in the stock market lately. Opening by telling us what a complete mistake you have been making and apparently continue to make is not a way to convince anyone that arguments hold any validity, at least regarding Tesla.
    Personally I think it is overvalued, but a lot of the reason is that it stock price is so high is it has benefited from the mother of all short squeezes. The time to short Tesla is when the shorts capitulate, when that would be I cannot speculate, since there are many convinced that Tesla will fall.
    Incidentally any moneys committed to selling Tesla short missed out huge market gains in the rest of the market. A double-whammy.
    Will Tesla make it’s numbers?
    Perhaps, perhaps not, but I would not put any stock in betting against them.

    1. TomArt says:

      Yep. I’ve made a huge return on investment in Tesla, Solar City and SunPower. All these financial geniuses and the population at large keep treating solar (as well as Tesla) as if it’s a passing fad or something. The Sun has a few billion years of hydrogen left – we’ve got about, what, 50 years of recoverable oil left at current consumption rates? I think I can still do math well enough to recognize the difference in those numbers.

      The stocks are ridiculously volatile, and for no reason beyond the blindness of mainstream investors, both daytraders and investment houses alike. It works out great for me. Everytime there is an irrational sell-off, I just buy more. It has worked every single time since I started three years ago. I just wish I had the cash to buy hundreds of stocks at a time instead of a few dozen at a time…I could have retired by now!

      1. TomArt says:

        Or, at least, bought a P85 by now…

  7. TomArt says:

    OK, last post…

    …Model X will easily double overall Tesla sales once production and backlogs reach steady-state. SUVs sell well, particularly in the US – in fact, many SUVs outsell their sister sedans, particularly in the luxury segments. 1k per week of each will not be enough to meet demand, that much is certain.

    As another commenter said, Tesla sales will go viral with Gen3, as long as nothing serious is screwed up between now and then.

  8. Jouni Valkonen says:

    Tesla is planning faster production ramp up. Perhaps around 900 000 cars in 2020. First gigafactory is already under way and two additional gigafactories will start constructing around 2016. Also Tesla will open three additional car factories in Texas, Europe and China by around in 2019.

    Tesla is able to do extremely rapid ramp up because today the annual demand for long range electric cars is about a million cars per year and no other car company is not planning to bring a long range EV on markets before 2018. (Rimac and Quant does not count here)

    My guess is that global demand for long range EVs in 2020 is about 10 million cars and there is no way that supply side can meet this demand. Therefore Tesla can sell every car that they possibly can manufacture at least by 2024.

  9. jessica says:

    insane !
    500 000 in 2020
    and 2 000 000 in 2025
    and 10 000 000 in 2030
    are they Witches and soothsayers…..
    The journalists can quite even predict the future.
    What a ridiculous profession!

  10. EvDeath says:

    About the TSLA bubble. Sheep are made to be shorn. About this ridiculous sales projection, someday we’ll all have ponies.

    With a decrease of 26% in US deliveries, it sure looks like the pond is nearly fished out. And yes I’ve heard the apologist’s stories about diverting sales to China.

    1. TomArt says:

      I can’t figure out why you keep repeating the decrease in US deliveries – it is not tied to demand – it has no bearing on current or future sales – they can’t keep up – they can make US buyers wait because it has been on sale here the longest – some international markets, like the RHD countries, have been waiting nearly two years longer than the first US buyers.

    2. CherylG says:

      In addition to the large drop in Tesla’s US sales volumes, the average transaction prices on the Model S have also dropped.

  11. Ryan says:

    Sure I’ve lost a billion dollars shorting Tesla so far but I have to be right eventually… Right?.. Said no smart person ever

  12. Bonaire says:

    Musk quoted 60,000 in 2015 and I think that is higher than they can reach.

    So, your graph breaks down as soon as next year.