Tesla Sales Soaring, Competition Failing

Tesla demand is so high they had to build another assembly line quickly – in a tent

Tesla reached No. 4 best selling passenger car in the US and should pass Toyota Camry in Q4 to become the No. 1 selling passenger car in the US.

Tesla has ~90% of the US EV market space.

Tesla deliveries in Q3 are double the deliveries in Q2.

Tesla sales are projected to grow from $4B last quarter to $6.78B this quarter. Net profit in Q3 is likely.

Legacy auto companies may suffer an unexpectedly rapid collapse in sales. This collapse may already be underway.

Bob Lutz purports that Tesla is headed to the graveyard and that ICE sales profits will fund future EV development and money losing initial EV sales. I suspect the truth is that the legacy auto and big oil industries are running scared and blowing smoke. They are doing their best to slow the introduction of EVs in general and Tesla in particular.

The fact is, ICE vehicle sales already are plummeting (see red entries in the table below).

Legacy auto makers today are like a wolf caught by the leg in a trap. To survive, they'll need to chew off their own leg. In other words, they'll need to throw away their industry advantage in the form of hundreds of billions in assets devoted to building ICE engines that, going forward, are worthless.

The simplicity of the problem is staggering, as is the pain required to avoid demise.

Start-up EV companies, in contrast, suffer from lack of experience and a lack of funds. They need to build new car production lines and don't know how. But at least all of their efforts and all of their assets are focused on the future of big auto, namely, EVs.

Who will win? Probably the start-up companies unless some legacy auto companies actually begin to take the EV disruption seriously.

Now, let's explore some Tesla sales metrics so that it becomes clear that EVs are on their way to taking over the entire auto market.

Tesla Owns the US Luxury Car Market Space

The Tesla Model 3 is by far outselling all other luxury cars in the US market space. We can expect this to repeat in foreign markets as soon as Tesla can increase production of the Model 3. We also can expect this to repeat with the Model Y and Tesla pickup when they are introduced.

The Model 3 is selling nearly five times more cars than the nearest luxury competition. And none of those competitors are EVs. This is a clear signal that car buyers prefer EVs over ICE.

(Source: CleanTechnica chart from Automakers data)

As a brand, Tesla worldwide sales have now passed Porsche and Jaguar.

Model 3 is crushing the US passenger car market

When it comes to performance growth, Tesla has become a rocket.

The Model 3 is now the No. 4 best selling passenger car sold in the US. This means it has passed over 100 models of ICE vehicles and has just three more to go to become No. 1.

One can expect the Model 3 will pass the Toyota Camry and take the No. 1 passenger car position before the end of 2018.

The May 2018 AAA survey found that 20% of their customers expected their next car to be an EV. AAA estimated 50 million Americans are waiting for the right EV to meet their particular needs. I use different numbers and estimated there are around 25 million Americans waiting for the right EV. This means there are between 25 and 50 million people in the US delaying their new car purchase until the right EV, for them, becomes available.

From the 2017 survey to the 2018 survey, about 5% or 5 million Americans were added to the EV future buyers list. This again matches my above estimate that 8 million per year are now switching to EVs as their next new car choice.

When AAA repeats the survey next May, I expect they'll find 30% of Americans are waiting for the right EV. This will pull another ~10 million Americans out of the new ICE vehicle market space. Read full article at SeekingAlpha