Despite intense media scrutiny around Tesla’s Model 3 “production hell” ramp, and Elon Musk’s take-Tesla-private drama, Tesla now has the #1 best selling car in the US. You may think that was a typo, but read on.
Tesla has finally executed on its vision of bringing a truly mass market car to the US, with solid results in July and August pointing to a record third quarter. In August, Tesla’s Model 3 became a top 5 best selling car in the US by units, behind popular cars from Toyota and Honda that start at less than $25,000, compared to Tesla’s current starting price of $49,000. (Note: The car category does not include SUVs and trucks.)
Although Tesla did not exceed other gasoline cars in terms of unit sales, it was by far the best selling electric vehicle, taking nearly 50% market share of all electric vehicles, according to InsideEVs estimates, and the Model S and X took another 15%.
Because of Tesla’s high starting price and compelling options, which are also expensive, Tesla’s average selling price for the Model 3 surged past $55,759 according to Twitter user Troy Teslike, who polls people who order Model 3s and publishes a variety of resulting statistics.
The high average selling price of the Model 3 and the record deliveries have resulted in Tesla’s Model 3 being the #1 best-selling car in the US by revenue in both July and August.
In addition to becoming the best-selling car by overall revenue, the Tesla Model 3 outsold entire luxury brands by car units (excluding vans and SUVs), such as Mercedes-Benz, BMW, and Audi. Tesla plans to further increase demand by offering cheaper variants of the car all the way down to $35,000, as well as offering leases and expanding test drive opportunities. Moreover, as with Model S and Model X, enthusiastic owners will show their cars to family members and friends, in turn generating more orders.
Sales data from August makes clear that Tesla’s vehicles remain dominant as they offer a truly compelling, no-compromises vehicle that buyers are willing to pay for. Actually, the Model 3, in a sense, is in a class of its own. It is extremely sporty, fuel efficient, high-tech, luxurious, and practical. There is essentially no other car on the market that offers so many stars on the complete package.
It remains to be seen whether Tesla can hit their targets of 50,000-55,000 Model 3s produced and slightly more delivered for the third quarter. In the most recent company update, Elon Musk claims Q3 production and deliveries are on track to double Q2’s delivery total of 40,740 vehicles. We will know the quarterly numbers in the first few days of October, but if July results, August results, and Musk’s statements are any indication, then Tesla will likely hit its targets for the Model 3 and have the best-selling car in the US by revenue for the third quarter. Industry watchers beware: the Tesla Model 3 is the car that will bring electric vehicles into the mainstream.