Our coverage of Tesla has sometimes been criticized as being too bullish, as believing Tesla’s forecasts too much without criticism, as being optimistically unrealistic. The people throwing around such critiques have often presumed that Tesla vehicle demand would drop, that Tesla would run out of money in a burning flame of cash bonfires, and that the company could (or would) go bankrupt by 2020. I think Tesla’s latest quarterly sales update shows that CleanTechnica has been quite realistic over the years.
Comparing Tesla’s Q4 2012 sales (deliveries, not orders) to Tesla’s Q4 2019 sales, we can see that Tesla vehicle sales grew 47× in 7 years. Anyone going along with Elon Musk’s forecast of such growth back in 2012 or subsequent years (even up through 2018 and a large portion of 2019) was frequently seen as unrealistically optimistic or “biased.” Anyone who agreed that such growth was possible, or even probable, was stuck into a corner of the room for Tesla fanboys and fangirls. However, we can see now that such bias was a bias toward reality, a bias toward a realistic future that has now come true.
(Note that the interactive charts above may not work on all devices. If they do not work on your phone, I recommend taking a look on a larger computer.)
To be fair to actual skeptics, this level of growth in an industry as complex and difficult as the auto industry is a stunning accomplishment, perhaps a once-in-a-century feat. This was not simply a software company (though, it is also a software company) that could grow so fast with relatively little capital investment. It is a high-capex industry and a single vehicle model takes years of planning and often years of sales before it recoups its R&D costs.
However, while covering this tremendous sales increase since 2012, I think it’s important to recall why Tesla sales have grown so much and why this Q4 2019 result was not a surprise to many of us.
In short, the Tesla Model 3 is the quickest, safest, most high tech car anywhere in its price range. Its total cost of ownership could be better than that of the Toyota Camry, Honda Accord, Nissan Maxima, or even Toyota Corolla or Honda Civic for many buyers despite the fact that it’s a much higher performance, safer, and high tech car. One problem with much of the mainstream media coverage of the Model 3 and Tesla as a business is they have not taken this into account. They have not made these comparisons and have not understood why a premium-class car can see so many sales, consistently putting it in the top 10 of US car sales in terms of unit sales and #1 in terms of sales revenue. (Note: that last line does not include SUV & other “light duty truck” sales.) They have not considered, it seems, that the Tesla Model 3 is a “10” despite being the cost of a “5” (using an age-old 1–10 ranking comparison). When you have a “10” that has the cost of a “5,” very many consumers find out and decide to buy one.
There are two or three major remaining barriers to Model 3 sales, in my opinion. The first is simply lack of awareness about the Model 3, including poor understanding or even dramatic misunderstanding of the car and the company. Many people still don’t know about the benefits of a Model 3, don’t even know about the car, or have dramatically false impressions of the car in their minds. Relatively few consumers know about the Model 3’s safety scores, autonomous-driving tech, expected low cost of ownership (including high long-term value retention), and even the fact that the base Model 3 has a price under $40,000 (many consumers still think that all Tesla models are much more expensive than that, including the Model 3).
Despite the expected low cost of ownership, another factor that limits sales is that the upfront price of the Model 3 is indeed too high for many consumers — you have to either have that much cash or be able to get a loan to cover the cost, and most Americans are unable to stretch enough for that.
The third potential reason that even more consumers don’t buy the Model 3 is that many people prefer a crossover design (which is what the Tesla Model Y will have).
Oh, also, we should recognize that Tesla basically sells every vehicle it can produce. Net orders routinely surpassed quarterly production in 2019. We haven’t heard yet if that was the case in the 4th quarter, but various clues indicate that it was. Furthermore, Tesla is on the verge of beginning production of the crossover version of the Model 3, the Model Y. This car is widely expected to have greater consumer demand than the Model 3. Elon Musk thinks the vehicle could see more annual sales than the Model 3, Model S, and Model X combined. And not a single one has been sold to a consumer so far. That implies that Tesla vehicle demand and delivery growth will not slow anytime soon. And we haven’t even mentioned the Tesla Cybertruck or robotaxis yet.
I continue to be bullish on Tesla. Many of our writers continue to be bullish on Tesla. If you think that makes us a suspect source of information, I think that’s unfortunate, because so far, those of us who have been bullish on Tesla have proven much more accurate when it comes to our conclusions regarding the tech, the company, and the future.
If being ambivalent on Tesla or providing “both points of view” on it in an equal manner means being unbiased, it also means being wrong. Having opinions on technologies or companies is natural if you investigate them deeply. Failing to provide those opinions doesn’t mean you are being unbiased — it means you’re concealing information. And if you investigate a company and determine the most important things to note (write or talk about) are “burning of cash,” short-sighted financial extrapolations, and unsubstantiated claims of demand cliffs, then don’t expect for people to see you as the best reporters on the company when it turns out cash wasn’t burnt (it was used for growth), simple financial extrapolations are not wise when they include absurd assumptions (anyone who embedded the right assumptions didn’t predict that Tesla would go bankrupt), and years-long warnings about demand cliffs are humorous at this point if not boring or suspect.
What kind of growth can we expect for Tesla from 2020 to 2030? We don’t know, but suffice to say, the future looks bright.
2019 sales were 16.4× 2013 sales …
11.6× 2014 sales
7.3× 2015 sales
4.8× 2016 sales
3.6× 2017 sales
1.5× 2018 sales.
(All figures here are for FY, not Q4.)
What will 2020 Tesla sales be?
— CleanTechnica (@cleantechnica) January 4, 2020
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