Tesla Model 3 Sales Starting To Track Original S-Curve… and LOL-Curve

SEP 6 2018 BY MARK KANE 100

Tesla Model 3 surges onto the S-curve.

There are two graphs showing Tesla Model 3 sales results in the U.S. – monthly sales and cumulative. The first one (below) seems to be the S-curve type, because after the initial slow growth, sales are now rapidly rising to the point of saturation in the future.

According to Rodney Tanner via Twitter, the progress of the Model 3 is close to mathematical S-curve.

The second, cumulative sales graph (bottom of post), is one of our personal favorites and we call it the LOL-curve, as it’s ridiculous how quickly Model 3 sales are skyrocketing compared to other models.

The Tesla Model 3 already is at Ford Fusion Energi levels (57,654 Model 3 and 58,179 Fusion Energi) and within two months it will overtake the Toyota Prius Plug-In.

We can’t yet guarantee that the Model 3 will be 1st by the end of this year, but it would be real show to the automotive industry as a whole, especially since the old stance was that consumers don’t want electric cars. Seems far from the truth now, doesn’t it?

U.S. Plug-In Car Sales – August 2018

Categories: Sales, Tesla

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100 Comments on "Tesla Model 3 Sales Starting To Track Original S-Curve… and LOL-Curve"

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William

Beautiful and Curvaceous Model 3 production ramp up, with exponential growth out of early Tesla “Production Hell”.

Model 3 should surpass the Prius Prime/PHEV possibly this month and definitely next, setting it sights on beezing by the Leaf at least, before year end.

REXisKing

Don’t forget, leasing is still not available too, that’s an additional 100% increase in demand. Tesla still supply constrained.

Wow. And no one else has an S-Curve.

will

They can set some 1000 model 3s for leases each month. They need there financial side business and return leases. plus they get double the down payment and double the interest

Cypress

If people buy, Tesla gets all the money up front, vs lease payments over time.

antrik

AIUI, leases are mostly backed by special bank loans; so in terms of cache balance, it shouldn’t be much different from sales — although profits are delayed in accounting…

Boncho Genchev

The graphs simply show that the TM3 is the only car that hits the sweet spot – it is appealing, it is “affordable”, it can substitute the ICE alternative. Once Tesla is able to produce the “cheapo” version, the other producers will have to significantly discount the prices to keep selling volumes, or will see even flatter sales

Nick

It’s not really that affordable for the segment it is in, it just happens to be a very compelling package.

Counterpoint

Exactly. Every Model 3 currently being made has a starting price of $49,000. That’s a far cry from “affordable” for most people. But it’s a sufficiently compelling product that people are buying them in droves anyway. One wonders how the Chevy Bolt might be selling if GM didn’t get out of European sales and promoted it more.

William L

Agree, can you imagine when the $35k more affordable M3 hit the market? The demand will be even greater.

Speculawyer

Exactly. A $35K base model 3 will break the ICE market. Tesla will need to build new factories if they can actually build and sell a profitable $35K base model 3.

will

How about a $30k base model 3 but cheaper with steel roof, basic interior, manual seats , non tesla network( self driving and car sharing) and no prepaid supercharging. 3 color choices, and to pay for nav and radio service and wifi

antrik

Most of that will already be the case for the base Model 3.

Darell Dickey

Yeah, basic interior, manual seats and no (3’s have) “prepaid” Supercharging is pretty much the base 3. It has to be “networked to Tesla though. And I agree on the limited color choices… with the easy paint! Seems to be a big hang-up right now.

Ziv

But can Tesla profitably sell more than a handful of $35k Model 3s? That price point at this time may be a bridge too far. A $40k base Model 3 isn’t a deal killer for most buyers.

antrik

Why do people keep questioning this? They confirmed, repeatedly, that they can, once production is streamlined in the not too distant future. It’s not like they didn’t do the maths…

Pushmi-Pullyu

I don’t get it either. I “get it” when serial Tesla bashers question that — they’re not writing what they honestly believe — but I don’t get it when sensible people like Ziv do.

You’d think, from all too many comments, that half or 2/3 of the Model 3 reservation holders are waiting for the absolute bottom-of-the-line, no options $35k Model 3. In reality, as we’ve seen with pretty much all models of cars over the decades and now centuries, very few people will chose the absolute no-options version of a car.

Prsnep

We’ll have to wait and see. The rebate is going to be dropped to 50% starting January.

Mark.ca

You don’t have to imagine anything, just do the math.
Current price $49K includes PUP and LR….-$7500 fed = $41500
SR Base + PUP is $40K, no fed credit = > ONLY $1500 difference for 90 miles of extra range.
I suspect many of the SR buyers are jumping to LR. The base version may not be as popular in US as many think.

CEJT

That’s why I cancelled my M3 order since I was expecting $35000-$7500 fed=$27500 . Tesla never had the intention to manufacture larger numbers f the SR base, period.

Duff

Dude, it is a TAX CREDIT, not a federal rebate. Huge difference. The car was never going to be “purchased” at $27500, even if you were getting a check for $7500, your purhcase price and the loan taken out (which means your monthly payments) would still be based on the SELLING price.

Pushmi-Pullyu

“Tesla never had the intention to manufacture larger numbers f the SR base, period.”

I think a couple of years from now, or even 18 months from now, that assertion is going to look pretty silly.

ABLE LAWRENCE

Tesla will start making 35000 car only when the production goes above 90,000 a quarter or 1000 a day at steady clip. At that scale, they will get 20% margin even at an average sale price of 45000 (They can maintain the margin at ASP of 40K if the production rises above 105,000. Alternatively, they can bring that level down by reducing production costs by increasing efficiency

Speculawyer

Yeah…that’s why he used the scare quotes “affordable” and then discussed a later “cheapo” version.

windbourne

And yet, buyers obviously differ with you about it being affordable.

will

Not afforable, not yet

Paul Smith

For a ‘not affordable’, it still has a waiting list.

Prsnep

Not affordable to the masses.

Pushmi-Pullyu

What is or isn’t “affordable” is highly variable, depending on the individual. Very obviously a large number of people find the Model 3 to be “affordable” enough, altho I agree it has never been proper to call a MSRP $35,000 car an “affordable” one. The Model 3 has always been “semi-affordable” at best.

Billy G

in other news that no one is talking about: Ford recalls two million trucks to address seat-belt fire concerns – from reuters

William

Ford is being careful, as well as cautious, in recalling those 2 million trucks with potentially sparking seat belt pretensioners.

3 Ford Trucks already up in smoke after their accidents, is enough of a precedent, to bring them all back to the dealer for a OEM retrofit.

Some Guy

That’s a good one, haven’t heard that one before. Way to go, Ford. I think this is equal to or beat’s VW recent recall of 700 k ICE SUVs that can catch fire when exposed to light rain while driving or being parked outdoors.

Chacama

Those 700k were not a recall but part of VW’s plan on cleaning up the Dieselgate vehicles.

rey

If you’re thinking that GMs Bolt is also in the same predicament, Sandy Munro said in the teardown of the Bolt GM loses aprox. $7,000 so even if cost have come down ,how much of a loss is GM willing to take? the Bolt is simply not competitive to a basic Mod 3,and with Lev 3 autonomy built in Mod 3 leases will have a feature Tesla can pull for CPO customers

Doggydogworld

The UBS/Munro report clearly shows loss on Bolt is entirely due to low volume.

Pushmi-Pullyu

“Sandy Munro said in the teardown of the Bolt GM loses aprox. $7,000…”

I’d almost bet money he doesn’t mean GM’s marginal cost for making a unit of the Bolt EV is $7000 more than the average selling price. I’d guess that he’s including sunk costs for R&D and tooling-up in that supposed “losing $7000 on every car.” Which means that in the second year of production, by that same brain-dead, kindergarten-level method of accounting, the Bolt EV will “magically” start making money, since sunk costs were all charged against just one year of manufacturing.

Or, you know, people who talk about how much it costs to make one unit of a car could talk about sunk costs vs. marginal costs as separate expenses… which they are.

It continues to amaze me that people so knowledgeable about the automotive industry use this kindergarten level of financial analysis. 🙁

antrik

Yes, the UBS analysis based on Munro’s teardown *does* estimate a positive contribution margin. However, the $7,000 per car loss (before ZEV credits) is *not* calculated only over the first year of production. Why would anyone do that?

So, would Bolt profit from increasing production? Hard to tell. While it would help offsetting R&D costs, significantly ramping production would also require additional CapEx — which might very well turn the total balance more negative, if demand doesn’t hold up over the long term…

Chris O

Spot on, MSRP would cover Bolt production cost+ dealer margin, any incentives will mean losing money so those are mainly in CARB states. GM is also chasing markets where the incentive system is rigged in favor of asking the higher MSRP Bolt really needs being a low volume/high production cost product.

Bolt was not designed for high volumes, its mission was to beat Model 3 to the market, compliance, being prepared for energy transition but never to add to short term profits because that would require an entirely different scale of production GM wasn’t ready for at the time.

antrik

I very much doubt the Bolt had a “mission” to beat the Model 3 to market. It must have been in development long before talk of Model 3 started in earnest. (I.e. beyond the original mention in the “master plan”.)

Pushmi-Pullyu

“…the $7,000 per car loss (before ZEV credits) is *not* calculated only over the first year of production. Why would anyone do that?”

Why?

1. Because nobody could know how many years the model will be made

2. Because nobody could know in advance how many units will be made in years after the first year, and with increasing production comes lower unit cost (economy of scale)

But I’m certainly willing to learn, if I’m wrong on that point. If there is a standard method of amortizing costs in advance, spreading costs over the years, what is that method?

“So, would Bolt profit from increasing production? Hard to tell.”

GM seems to think so, since they have planned for a modest increase in production for the 2nd year.

antrik

The small increase they announced probably doesn’t need much CapEx. (Indeed AIUI it’s mostly just shifting more existing Sonic production capacity?…) A larger increase, requiring more substantial new investment, would probably be much harder to justify.

I don’t know the exact method UBS uses to make the estimates: but given that the typical life span of a car model is fairly well known, as well as the typical sales curve over the entire production run, I’m sure they have a standard model for that. Indeed GM must be using a similar standard model for their internal profitability estimations…

ModernMarvelFan

I imagine the curve for Model Y would be even steeper…

REXisKing

And then there’s the pickup.

Adoreizi

I’m finally now starting to see just how massive Tesla will be. There’s no denying it anymore.

Viking79

It took me a while to see that as well, but the writing has been on the wall presuming they followed through with Musk’s plan. There are still many that don’t see it, but they will in time.

Chacama

And the Semi

Chacama

And the Roadster

Prsnep

Batteries have to get cheaper before electric pickups become compelling.

Mark.ca

2020….that’s when all the unicorns come out and play.

Chris O

I suspect Tesla has 200KWh in mind for its electric pickup, so yes it probably will need that $100/KWh it’s projecting for that but I think a $60-70K truck could absorb $20K battery cost.

BillT

There certainly is a market for pickup trucks with prices north of $60K. The big question for me is if the buyers will accept a somewhat aerodynamic vehicle. I think commercial buyers will but consumers are a different market.

Derek

The model Y is supposedly going to be shown off in March, I’m really hoping it’s another 2-fer.

Mikael

Assuming that it actually looks good and is SUV-ish and is not just gonna be a bloated egg-shaped Model 3.

Speculawyer

ow dare they use great engineering skills to design a very aerodynamic vehicle that maximizes range and minimizes battery costs! They should make it horribly inefficient so it looks like what you are comfortable with.

Maybe they should add a big fake grille, wood paneling, fins, and lots of chrome for you. 😉

Pushmi-Pullyu

Anyone who thinks the Model Y is going to look less egg-shaped or less “like a pregnant whale” than the Model X, is in for a disappointment. The Model Y is going to have the same overall shape as the Model X, for exactly the same reason. Cars shaped in a wind tunnel to minimize aero drag are going to look rather similar.

If you want a CUV or SUV that’s much more boxy, with considerably higher drag, then other auto makers offer a wide variety of choices.

Speculawyer

Exactly. Optimal designs tend to converge on a few designs. The traditional vehicle shapes are just not near optimal at all so a well-designed car will not look like a traditional design.

ICE cars can deal with range issues by simply using a bigger steel container…the gas tank. You can’t do that with EVs. For every additional mile of EV range, you need to add more battery cells. And since batteries are expensive, the only sensible thing is to optimize like crazy on aerodynamics.

Seems obvious but Tesla is the only one to have figured this out. The traditional automakers have improved aerodynamics on their EVs but they just can’t seem to realize that is not good enough. You have to optimized like crazy to build an AFFORDABLE EV that will have decent range.

So if you insist on boxy…you will have to pay a huge amount, deal with a really short range…or stick with ICE.

Pushmi-Pullyu

Well said, thanks! 🙂

Derek

I don’t get the Model Y, the Model X is a pretty small SUV, if you want a smaller vehicle then that, why wouldn’t you get an model S? IS it because it’s supposed to be the “poor” mans Model X?

Cypress

I wouldn’t call a $45k vehicle a poor mans vehicle. But yes, the Y is supposed to be a more affordable crossover.

Pushmi-Pullyu

1. It’s less expensive.

2. Some people prefer the Model 3/Y series to the Model S/X series because they don’t want such a large car. The Models S and X are unusually wide, and are too large to fit in some garages.

antrik

Model X is pretty small? That’s not what I’ve been hearing…

Pushmi-Pullyu

Yeah, it seats 7 in its standard configuration, so calling the Model X “small” is rather odd. If you want a small car that’s labeled an “SUV”, look at the Jaguar I-Pace. (I’d call that 5-seater a hatchback rather than an SUV, but maybe that’s just me.)

Derek

I think the i-pace and Model X look roughly the same size…

Speculawyer

Tesla found a winning EV design. Sleek modern aerodynamic long-range fast-charging semi-affordable EVs sell.

If they manage to hit the $35K base model price target then all hell is gonna break loose.

(I’m a bit skeptical of them hitting that $35K target with the Model 3 though…it might take another generation of refinements & optimizations.)

Gator Rican

Does “generation” = 5-8 months?

Speculawyer

I wish I knew! Maybe. Maybe a 1 year. Or 2.

Vexar

No, I think they will hit it within the next couple of factory refits. I don’t know how often that is happening, but if they poke at it every 6 weeks to 2 months, one GA at a time, and get to 10,000 a week, that’s the break point where the $35k one will be built. And then, yes, it will be like the scene in Ghostbusters. Speculawyer can’t mean next-gen Model III.

Speculawyer

I don’t think they can build 10,000 Model 3 cars plus another 2K to 4K Model S & X cars at the Fremont factory. They are gonna need to start building another factory.

Viking79

They already are ready to in Shanghai, they break ground very soon. That factory will produce 500,000 a year in about 5 years. It will start production in about 2 or 3 years.

I think Fremont will be fine for 500,000 Model 3 and 100,000 S/X when they get all their lines finished. The improvements cost money though so they need to get the revenue flowing first, which they have done, and show some profit before spending more again. I would expect the Model 3 Standard when Musk suggested it will come.

Derek

The Fremont is capable of at least 700k per year, but for the Model Y, Semi, & Roadster all coming in the next year or 2, they are going to have issues. They need to either begin a massive expansion at Fremont, or perhaps at the gigafactory, and finally putting the cars & the batteries side by side like Elon has said all other gigafactories will be from now on.

antrik

I’m pretty sure they can build 10,000 Model 3 per week in Fremont. Originally they were planning to add a second complete production line for the second 5,000; now they are saying they only need to add extra capacity at a few specific points. (And can achieve 8,000 with few additions at all, according to the recent independent analysis.)

AIUI, logistics are the major limitation for further capacity expansion at Fremont…

CPO

There is supposed to be a new generation of Tesla car battery coming out in early 2019. That is part of the optimization you are talking about. It will probably be cheaper to make as well.

Mark Garnett

I would like to see the graph redrawn where the horizontal scale is quarters-since-lanuch, so all the lines start at the same day zero. That will really show the difference between the different cars. Additionally if an extra line was drawn showing cumulative all non-Tesla sales we would see the model 3 (alone) was soon to eclipse all others combined at 4 and 1/2 quarters. And cumulative all-tesla sales since launch already eclipse all others combined at that time point (4.5Q)

Grafham
Tesla is having many orders in hand but it’s been pointed out many times that most of these are for the entry level vehicle starting at $35k plus which is yet to go into production. It’s very clear Tesla is achieving substantial new orders for models S, X and 3 for long range, dual motor and performance models, evidenced by the opening up for new orders for these models, and can be clearly seen in the continued drop of sales for other luxury vehicles such as BMW and Mercedes (shown in their own sales data if one one makes the effort to see). I am not specifically only a Tesla support I liked the fact that Jaguar was an early entrant to EV’s others are coming late to the party! But if one thing is for sure and that is that Tesla has already been successful in changing the dynamics of the motoring industry witch it set it self as being one of the main aims, now the others have been forced to enter with their own sales being cannibalised by Tesla and other new entrants. It’s a very interesting space with clearly a much clear and brighter future for… Read more »
Marcus Mullen

I agree with most of that. A little-mentioned fact is that the US has only comprised about 17-20% of the world-wide plug-in sales for a number of quarters running. Since the Model 3 has only been sold in N. America so far, the worldwide demand is huge, about 5-6X as much. It’s tough to say what percent of the worldwide demand will wait for the less expensive Short Range Model 3 (vs. AWD and Performance) but it’s a safe bet that it roughly approximates US demand

John-EU

Desperately waiting for the M3 to finally come to Europe, but the last two weeks of twittet VINs is not convincing me it will happen soon.

ffbj

There are some going to Europe soon. A couple months.

dg

Gah don’t call it an M3, there’s already a car with that name.

John-EU

Not for much longer! 🙂

antrik

Context. We all know which one he is talking about.

Priusmaniac

Do you mean that old BMW gasmobile which nobody really cares about anymore?

will

wow chevy volt is the top ev in the us but gm dont care anymore

rey

I want a car that I can stick my middle finger at BIG OIL and BIG AUTO is what this sales chart are saying and the Current Price of the Tesla Mod 3 is high right now when the Basic ones come out LOOK OUT!

Roy_H

What is a LOL curve, mathematically speaking? An S-curve or Log curve (exponential) is a real thing, but is LOL Laugh Out Loud a curve now?

Priusmaniac

As I understand it, when you look at the slow sales progress of all the other cars and then compare that to the exponential rise of the Model 3, you usually start to laugh out loud, hence the name LOL curve.

By the way, It worked for me after seeing it.

Madan R

So Model-3 has passed Chevy Bolt, BMW i3, Ford C-Max, Tesla Model-X in sales.
This is very interesting chart. Please post this chart every month as Model-3 registers significant sales increase.

antrik

They are posting this chart regularly.

Derek

The biggest shocker to me in this chart isn’t the Model 3, great cars sell well…not surprising.
It’s the Nissan Leaf, they launched the 2nd gen Leaf, with nearly double the range of the original, better looks, and has good tech like pro-pilot…and yet sales slowed down!?!? I’m stumped by this, is it truly because every potential Leaf buyer out there is waiting for the even longer range 2019 Leaf with the battery TMS?
TMS is a good upgrade…but damn, I am shocked sales slowed down.

Cypress

I think the Leaf is doing better outside the US.

Pushmi-Pullyu

With “rapidgate”, I think Nissan’s poor choice of battery chemistry compounded by lack of active battery pack thermal management is finally catching up to them.

Nissan’s strategy of aiming for the bottom end of the BEV market was only going to last as long as there were not better choices out there. Well, now there are a growing number of better choices.

Thank goodness Nissan is finally going to start putting an active TMS (Thermal Management System) into the Leaf next year, altho only for the larger battery pack version. Hopefully that will stop the hemorrhaging of Leaf sales?

https://insideevs.com/nissan-leaf-buyers-misled-false-advertising/

antrik

I still think most potential Leaf buyers probably don’t care about “Rapidgate”, since they weren’t planning on doing long trips in it anyway.

Pushmi-Pullyu

Perhaps, but you seem to assume most Leaf buyers really understand the issues like we regular readers of IEVs do. Given the surveys done of potential car buyers, I don’t think the average car buyer understands the issues at all. Heck, they don’t even understand that a PHEV can run on either electricity or gasoline!

Perhaps all the average would-be Leaf buyer understands is that Nissan is guilty of some false advertising regarding the Leaf.

antrik

Others frequently point out that previous Leaf versions have seen large discounts, while the newest version isn’t thus far.

Robert Weekley

Well, the 60 kWh Leaf had a chance to arrive before Model 3, but Nissan was slow to see the Model 3 coming at them!

darth

They are losing to the model 3. At least for me anyway. I have a 1st Gen Leaf but our 2nd family electric car is a model 3. 2nd car needs to be able to make road trips, only Teslas can do that. Delivery date is next week, so we don’t have to wait for the long range 2019 Leaf either.

Derek

Your in a different ballpark…
The Leaf is 20 grand cheaper then the Model 3…to MANY people, that’s apples to oranges.

Bob

Wouldn’t the Model 3 be the top selling car by $dollar volume in August18? Would somebody check me on this please?

Speculawyer

Very good point. I suspect that would be correct. Someone should run the numbers. It could be the #1 passenger car in sales revenue since the cars above it generally cost much less.

windbourne

interesting.
By end of year, it will be either #1 or 2. And regardless, within several more months, they will be #1.

Hauer

Even when the SR will be available I expect them to mostly sell for 40k.
Just make a batch of the naked version every few months.
So customers choice is either a 35k version in 3 or 6 months. Or the 40k premium version in a few weeks.
I would fall for it.

Robert Weekley

It would keep Producton Simpler, increase Margins (most likely), and get time for reports on the base range version to get out there, for remainder of Base Model Buyers wanting the $35,000 version, to determine if it’s enough! And if the $5,000 savings in purchase costs overide the benefits of the Premium Upgrade!