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Friday, January 13, 2017

2017 EV Sales Projection - Tesla Model 3 is the Wildcard

One year ago, I made my 2016 - 2019 plug-in vehicle projection for the US market. You can find it here. The simple trend line I used projected that 2016 would see 157,000 new plug-in cars on US roads when the ball dropped in Times Square.

This projection turned out to be surprisingly accurate. I am happy to report that, according to the EDTA, there are now 157,112 more plug-in cars on the road. InsideEVs reports a slightly larger number of 159,139 sales. Either number represents successful growth of the US plug-in car market.

These sales put a total of ~560,000 plug-in cars on US roads. This is on track to hit the 1 million mark near the time that we ring in 2019, as we predicted in the same article one year ago.

Here is that simple chart with the most recent sales data added:

Since the chart worked out well for 2016, I see no need to update it. At some point in time, the logistic function will take a steep upward turn and this linear trend will be woefully low. Based on current battery price trends, this is likely to occur between 2020 and 2025, so sticking with this simple trend line should continue to be an adequate estimate for the next couple years.

Looking forward, this simple trend line predicts that we'll see ~180,000 new plug-in cars on US roads in 2017. During this year we should see the Chevy Bolt start selling in all 50 states. We should see 25,000 or more of them in the hands of new drivers. 2017 will also be the first full year of Prius Prime sales. This could put another 10,000 plug-in cars on the road or more (assuming dealerships will carry them). These two cars alone could account for the expected market growth over and above 2016.

Several new EVs will make their premiere in 2017, but there's one in particular that we must discuss. The big wildcard of 2017 is the Tesla Model 3. Tesla has hundreds of thousands of worldwide pre-orders for the car, with about two hundred thousand of those in the US. This year, they could deliver just a few like the Model X did in its debut year of 2015, or they could deliver tens of thousands. Tesla has a track record of making sure that they're making their vehicles with as high of quality as they can before they start deliveries. They don't hold to previously announced product release dates if the vehicle is not ready. Their philosophy is that it's best for the company's reputation and long-term growth to deliver high-quality vehicles, rather than rush things to market. How this philosophy will affect the Model 3 is yet to be seen. But we do know that this vehicle will have a profound impact on the 2017 delivery results.

2017 should bring about 180,000 new plug-in cars to US roadways. The big wildcard is the Tesla Model 3. High volume deliveries could push that number over 200,000.

Tesla represented about one-third of the plug-in sales volume of 2016. That is a lot from just one company. If they deliver the Model 3 in quantity, it will rock the market. It would be very exciting if this estimate turns out to be too conservative and plug-in sales cross the 200,000 mark! Fingers crossed.

How many Model 3 do you think Tesla will deliver in 2017?