Post-January sales update

So it has been quite awhile since my last update.  Unfortunately I had some personal matters that came up and I was not able to post a year-end summary.

At any rate, 2017 went out with a bang.  Total US sales across all manufacturers totaled 26,107 which broke the record of 24,785 set last December.  I’m sure the threat of losing the EV tax credit didn’t hurt, although buyers who want an “instant return” on their EV tax credit would normally buy in December anyway.  The end of year is also traditionally a time for sales pushes as well.

Of note, the Chevy BoltEV sold 3227 copies, and the Model S and X had great a great month with 4,975 and 3,300 estimated sales respectively.

On the Model 3 ramp, the news could have been better.  Remember that Elon Musk initially predicted 5,000 Model 3s per week by year end.  Well, the reality turned out to be significantly less than that (which I don’t think surprised anyone).

Tesla did try their best to spin the disappointing news with marketing statements (that seemed like they had the desired effect, as many took the bait) such as their manufacturing lines reached a rate that extrapolated to over 1,000 units per week during the last few days of 2017.  The reality is that the actual production during the last week of 2017 was 793 units, not the 1,000 that most people quickly reading the statement assumed.

At the end of the month, however, only 1060 Model 3s were sold, with 860 “in transit”.  Considering there were also probably a few “in transit” at the beginning of the month, we can estimate that there were probably only 1600 or so Model 3s actually produced in December.  If 793 of those were produced in the last 7 days alone (and that was probably an all out push to generate good news), it doesn’t speak so much for the volume during the rest of the month.

Nonetheless, the news is at least positive that they were able to improve the production rate so dramatically.

This puts the total US sales for Tesla at the end of 2017 at about 161,571.

So how did the January numbers turn out?  As is the case every January, the big push at the end of the year, combined with lousy weather that is typical in January and post-Christmas bills, sales were down.  Way down.  Across the board.

Sales of the Chevy BoltEV plummeted to 1,177, just over a third of what they were the month prior.

Tesla Model S and X sales were estimated to be 800 and 700 respectively, slightly below what they were last January.  Model 3 deliveries were estimated to be 1,875.  Better than December for sure, but still nowhere near the milestone of 1,000 per week.  Rumors are that the factory was shut down for the first week in January, partly to give workers some well deserved R&R after the big December push, but also to perform routine maintenance on the assembly line machinery.  But still, even if you assume 3 weeks in January, and assume the same level of vehicles “in transit”, you’re still only talking an average of 625 vehicles per week.  Still a long way to go.

I actually feel that the number of vehicles “in transit” might be higher.  The reason is that Tesla is having to build out its delivery infrastructure as well.  The first Model 3s were delivered to relatively big delivery centers in California.  Now that vehicles are being distributed across the country, not only does the transit time itself increase, but you have to ship cars to many smaller stores and delivery centers that may not have the throughput that the ones in Fremont and LA have.  However, that excuse only works once.  Now that the pipe is full, we should expect to see more consistent deliveries.

So that puts us at around 165,000 vehicles from Tesla with only 8 weeks left in the quarter.  Even if Tesla were able to produce 4,375 vehicles per week today, they wouldn’t hit 200,000 before the end of the quarter.  I think we can safely put to rest any fear that they will hit 200K this quarter.

But do we need to consider the possibility of Tesla delaying all the way until July 1 to cross that barrier?

I don’t think so.  Assuming a ramp that gets them to 2.5K/week at the end of 1Q18 and 5K/week at the end of 2Q18, I predict they will hit #200,000 around April 25.  This is far too early in the quarter to talk about deferring until 3Q.  So I put the likelihood that they will hit it in 2Q extremely high.

As for other manufacturers, I think we really need to see where sales wind up after looking at February and March.  January’s sales were just too depressed to make any meaningful predictions at this time.  In particular, will Bolt sales end up picking up where they left off?  And what about the Nissan LEAF 2.0?  How well will that sell in the US market?

Stay tuned!

Leave a Reply

Your email address will not be published. Required fields are marked *

Post Navigation