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Title : How high will the Tesla Model 3 sales can go?
link : How high will the Tesla Model 3 sales can go?

How high will the Tesla Model 3 sales can go?

There has been a lot of talk about the upcoming Tesla Model 3, namely the impact it will have on the ICE mainstream car market.

Some have been saying that the Model 3 will be so disruptive, it will even outsell the current ICE best sellers.

While i agree that it could happen in some markets, from a global perspective, the Model 3 is a disruptive model, but only in the Premium class.

Last year the BMW 3-Series sold 411.000 units worldwide, the Mercedes C-Class some 425.000 and the Audi A4 did 337.000, so if the Tesla Model 3 does get to 500.000 units in 2019 (Possible, but not a given), it will be the leader in the Premium Midsize class, but it will be far from the ICE Best Sellers.

Putting things into context, the global Best Selling models in 2016 were:

#1 - Toyota Corolla (1.316.000)
#2 - Ford F-Series (994.000)
#3 - Volkswagen Golf (991.000)
#4 - Hyundai Elantra (788.000)
#5 - Honda CR-V (752.000)
....
#10 - Toyota Camry (661.000)

So while it might have a shot at being the 2019 Global Midsize Best Seller and joining the Top 10, the odds are against it, and let's not forget the Elephant in the Room that Tesla will have by then, sucking the Model 3 sales: The Tesla Model Y.

As we are now witnessing with BYD, regular cars are being dumped in droves by private buyers, to the benefit of their SUV counterparts, so by the time Tesla starts to deliver their Midsize SUV (Sales target: 700.000/year), the Model 3 will become out of fashion, with 2020 sales suffering from internal competition, something that it doesn't have now, unlike their direct ICE competitors.

This will mean that 2019 will be the peak year of the Model 3, not only because of the Model Y, but also because in 2020 the EV Scene will be filled with new models from legacy OEMs (2020 Nissan Leaf, VW ID, BMW 3-Series BEV, Mercedes EQ...), that directly or indirectly, will compete for the same customers that Tesla does, and let's not forget that mainstream buyers are less prone to change than the innovators niche that Tesla has been doing so far...

"But isn't the car market going to shrink because of Autonomous Vehicles (AVs) and the shared ecosystem that comes along with it?" - Some might ask.

Maybe, but according to someone i know that works in the AV department of a Big OEM: "Level 5 AVs are at least five years away, not only because of the AI learning curve, and Tesla is ahead of everyone in that, but also because of the level of hardware, software and connectivity needed for it to work flawlessly".

"Flawlessly" is the key word here. Not only AVs will have the same (Or higher) level of resistance that Uber and the like have now in certain sectors of society, but the implications of a human fatality derived from an AV flaw (Software malfunction, system hacking, etc...) will be tremendous, possibly even leading to some sort of ban in some places.

So, unless WWIII breaks out, do not expect a significant shrinking of the Global Auto Market at least until 2022.

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