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Sunday, October 8, 2017

When Will Tesla Hit 200,000 Sales in the U.S.? [Q3 2017 Update]

We've been tracking Tesla's sales for some time now. Specifically, the sale of the 200,000th vehicle in the US is an important milestone since it will trigger the US Federal incentive to begin its phase out 3 to 6 months later.

There are hundreds of thousands of people with Model 3 reservations, the timing of the incentive phase-out could impact many buyers, so it's an important question.

Earlier this month, Tesla released their Q3'17 sales numbers. This was Tesla's best quarter for vehicle deliveries, representing a 4.5% increase over Q3 last year. They added over 26,000 cars to the roads worldwide and 15,000 of those in the US. This moves Tesla another step closer to the trigger-point with their current total at just over 145,000.

Model 3 production was less than Tesla's forecast and they attribute this to "production bottlenecks". As they said, they are in production hell. As we've projected problems are to be expected and these early ramp-up pains will be resolved and are not consequential to the eventual volume forecast we've made.

Given the new sales data, here are the up-to-date US sales data and our forecast.

For the past six months, our prediction has had the 200,000 trigger-point occurring would occur in the second quarter of 2018. News outlets and other blogs have been predicting the more optimistic Q1'18 or even Q4'17. Well, after adding the latest sales data, the trend move out even further to late in Q2.

However, it is unlikely that Tesla will cross the threshold near the end of a quarter. If that were the case, they would be more likely to withhold shipments (to the US at least) to allow for the maximum delay of the period before the phase-out begins. This could result in the trigger-point occurring in July. However, I am going to assume that we'll see a step up in Model 3 deliveries later this year that will pull the 200,000 mark solidly back into Q2. If so, for now, we'll keep our 200,000th US sale forecast in Q2 of 2018. If this turns out to be true, here's how the US Federal incentive will phase out.

By the end of the year, we'll know if Tesla can break the Model 3 production bottleneck. Production hiccups on Model 3 at this stage don't have a big impact on the overall delivery data, as Model 3 production ramps, this will change significantly as it will dominate Tesla's sales volume.

Assuming that the above forecast is correct, the incentive would remain in full effect until the end of September of 2018. This would afford Tesla more than one year of Model 3 deliveries with the full US tax incentive. This should include delivery of the dual motor all-wheel-drive and performance versions of the cars that are expected to start delivery in early 2018. So if you placed your reservation before Independence Day of this year, there's a good chance that you could have your car in time to qualify for the $7500 federal tax credit.


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