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Top Global EV Automaker? Telsa Electrical Vehicle Production Surges During Early 2018

The Tesla bears have all sorts of reasons to cry today.

Not only did Tesla manage to produce four times the number of revolutionary Model 3 vehicles it made during the fourth quarter of 2017, it also hit multiple additional milestones even as CEO Elon Musk derided unfounded rumors that the company was in need of an immediate cash infusion.

Model 3 Surge

Tesla bet its future on the Model 3. And after a nine month period of production chaos and uncertainty, it appears that the bet is starting to pay off.

Late in December of 2017, after struggling through a hellish maze of bottle-necks, Model 3 production rates briefly hit above 1,000 vehicles per week. At year start, this rate slackened somewhat only to reassert by early February. During late February, the Model 3 line was shut down briefly for improvements. Meanwhile, the battery-mass-producing Gigafactory in Nevada (at 11 GWh per year and growing) had opened up a second line for Model 3 batteries after new equipment was shipped in from another Tesla factory in Germany.

With a number of bottle-necks addressed, by mid-March Model 3 production was again surging — hitting around 1,400 per week. A final big late push by the end of the month resulted in weekly production in the range of 2020.

This impressive effort by Tesla generated nearly 10,000 Model 3s for Q1 of 2018. Of this number, about 8,200 are thought to have been sold.

Record First Quarter

With Model 3 selling at nearly as high a rate as Model S and Model X, Tesla appears to have rounded out the first quarter of 2018 with a record 29,980 vehicles delivered. A number that is likely to top 30,000 once all sales are counted. Tesla produced far more — hitting 40 percent growth and 34,494 all-electric vehicles made.

The clean energy company also announced that Model S and X orders were at an all time record high. A slight lag in S and X production during Q4 of 2017, therefore, was the likely cause of slightly lower S/X sales during Q1 of 2018. However, it appears that Tesla is rapidly catching up as it reports that 4060 of these cars were in transit to customers at the start of Q2 even as another 2040 Model 3s were also en route.

Top Selling EV Automaker Globally

Given approximately 30,000 cars sold and 34,500 produced in Q1 of 2018, it appears that Tesla is again in the running for the best-selling maker of electrical vehicles the world over. For it looks like other top contenders — BYD (China) and BMW (Germany) — will sell in the mid 20,000s during the first three months of this year. At the very least, current tracking indicates that Tesla will likely be in the top 3 with BAIC and Nissan trailing behind.

(Top global EV sellers list for January and February from InsideEVs puts Tesla at 5th globally. But a surge in sales during March likely pushed Tesla into the top spot for Q1. Image source: InsideEVs.)

Tesla Model 3 is also likely to hit within the top 6 EVs sold the world over for Q1. Nissan Leaf and the BAIC EC series will likely claim the top two spots. However, the story going into Q 2 is likely to be considerably changed as Tesla tests new limits.

Model 3 Production Likely to Hit 17,000 to 27,000 During Q2

In the U.S., the Model 3 is the uncontested top selling EV already. And its lead is likely to continue to widen.

Tesla notes that it will continue 2,000 Model 3 per week production during the first week of April. If past trends are any reliable indicator, this rate is likely to slacken somewhat as Tesla pauses for breath by mid-April. It doesn’t look like the 3’s production will drop significantly lower than the 1,200 per week mark going forward into April and May, however.

And as the quarter continues, Tesla will also likely attempt another period of surge production aimed at hitting the 5,000 vehicle per week mark. Such a surge will likely occur in June. But we might be treated to a mini surge or two by early to mid May as Tesla tests the 2,000 to 2,500 vehicle per week (or higher) mark again within the next five to six weeks. We expect weekly production during Q2 to average between slightly more than 1,400 per week to 2,250 per week with the number of Model 3s produced approximately doubling to tripling when compared to Q1.

The result is that Tesla appears to be on track to sell between 39,000 and 49,000 EVs (including Model S and Model X) during the second quarter. A surge in sales that will almost certainly propel it to the world’s top EV manufacturer even as Model 3 begins to hit breakout production velocity.

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14 Comments

  1. Jeremy in Wales

     /  April 3, 2018

    https://www.theguardian.com/business/2018/apr/03/struggling-tesla-speeds-up-production-of-model-3-vehicles

    Guardian pick up on this as well, financial dirty tricks by credit rating agencies that could not spot a banking crisis.

    However, rest of motor industry (but apparently not Ford) seem to be building up a lot of new models as seen in the Geneva Motor Show and motor racing is one of the sources of innovation and build up of expertise.

    Fully Charged two parter.

    Liked by 1 person

    Reply
    • There’s a lot of talk-talk by the auto industry. GM, for example, is supposedly planning 20 EV models with two more coming out this year. But at the same time, as mentioned in the previous article, they fight CAFE standards. It’s hard to tell what’s greenwash, what’s an actual serious effort, what’s a compliance vehicle, and what’s aimed at slowing down Tesla.

      I pay attention to action more than words. And the actions so far have been somewhat non-inspiring. Good vehicles like Volt and Bolt are produced but sometimes sand bagged by management. On the other hand we have serious sales contenders like Leaf, Renault, and those from the Chinese automakers.

      IMO, big auto had better get their act together. The slower Model 3 ramp has given them a little time. But this appears to have been squandered on attack campaigns and attempts at perception shaping RE Tesla.

      As for the ratings agencies, yeah, I don’t put much stock in them RE Tesla. And they can tend to royally mess up when it matters most.

      Liked by 1 person

      Reply
      • Jim

         /  April 4, 2018

        I’ve also been trying to figure out what Big Auto is planning. Fighting CAFE standards, while certainly attractive to short-term focused auto executives, risk positioning their companies as technology laggards as advanced forms of hybrids and EV begin to appear.

        According to KPMG’s 2018 Global Automotive Executive Survey, auto executives are now back to thinking fuel cell vehicles will be the next big thing, at least through 2025. It’s tagged as a “Better use of resources”. Really? In the midst of the biggest seismic shift in auto propulsion technology in a century, auto executives are planning on spreading resources across FC, ICE, EV, hybrid, and diesel technologies? I really don’t think they understand there’s a Kodak moment approaching.

        Li-Ion battery prices are at $209 per kWh and have been dropping at 26% per year. Most auto industry analysts believe that near $100 per kWh, it becomes cheaper to produce an EV than and ICE auto, but lifetime operational cost crossover happens much sooner.

        With massive investments in battery manufacturing coming on line through 2022 there’s a strong potential that the Li-Ion cost declination rate could increase, with some of it offset by higher metal prices. This means that within the span of 36-60 months – the average length of a new car loan – EV’s have the strong potential to be cheaper to purchase than ICE vehicles and dual propulsion hybrids. Cleaner, more fun to drive, cheaper to “fuel”, cheaper to maintain electric vehicles.

        Page 10 offers a clue as to automakers strategies:

        “Differences in market maturity, economic wealth and national interest lead to different regional distributions of ICEs, Hybrids, BEVs and FCEVs, driven by CO2 and NOX emission agendas.”

        I have my own interpretation of what this corporate-speak means, but I’d like to hear what others think.

        https://assets.kpmg.com/content/dam/kpmg/nl/pdf/2018/sector/automotive/global-automotive-executive-survey-2018.pdf

        Liked by 1 person

        Reply
        • Excellent discussion here, Jim.

          It’s worth pointing out that, in total, approximately 100 HFCVs sold in the U.S. last month. This compares to roughly 24,000 electrical vehicles. Auto executives claiming that HFCVs are going to out compete EVs in a race where EVs are already miles ahead on price, capability, reduced carbon emissions, infrastructure, synergy with renewable energy infrastructure and utilities, and production capacity may as well be smoking their tea leaves.

          We’ve heard this narrative before in the early 2000s as part of a larger attack on EVs. The hydrogen mythology (and it’s mostly myth and vaporware at this time) is just a retread of an old delaying tactic.

          The reason? Well, think about this. With each doubling of manufacturing capability, the price of a material object tends to fall by 10-15 percent. This is what we call economies of scale or the learning curve. Historically, renewable energy economies of scale have exceeded this base 10-15 percent and the battery learning curve appears to be in the range of 20 to 30 percent. Over the next five years, battery production is likely to double and then double again.

          In addition, Lithium battery industry averages at 209 dollars per KWh do not take into account leaders like Tesla that are already below $150 dollars per KWh. Tesla battery production is now at 11 GWh per year and is likely to hit above 100 GWh per year by the early 2020s.

          This is why big auto is freaking out. They don’t own the battery factories and they can’t produce the same economies of scaling as Tesla and China presently without major investments. They have money right now which they could invest to compete at scale. But they are instead investing in delaying tactics for the most part.

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        • One other point that I’d like to add about the hydrogen economy myth:

          It is not so largely based on a manufacturing process and so it will never benefit from the same kind of learning curve that materials based energy industries like wind, solar and batteries are able to develop. Mass adoption would produce some learning curve for things like vehicles based on hydrogen and for the system itself. But it lacks the capacity to learn anywhere near as fast.

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      • Abel Adamski

         /  April 4, 2018

        Another point re the shorters and financial Guru’s, the shorters have lost I read $5Billion over the last year shorting Tesla before the last episode, the big Knockers and short promoters don’t seem to be hurt, so I guess it is their pyramid scheme scam, stoke up a short run then buy the shares cheap and make a killing leaving their true believers to take the hit, that $5Billion goes somewhere.
        A whiff of market manipulation or fraud maybe

        Liked by 1 person

        Reply
  2. wili

     /  April 4, 2018

    “It’s time to think seriously about cutting off the supply of fossil fuels
    A new paper makes the case for supply-side climate policy.

    There is a bias in climate policy shared by analysts, politicians, and pundits across the political spectrum so common it is rarely remarked upon. To put it bluntly: Nobody, at least nobody in power, wants to restrict the supply of fossil fuels.

    Policies that choke off fossil fuels at their origin — shutting down mines and wells; banning new ones; opting against new pipelines, refineries, and export terminals — have been embraced by climate activists, picking up steam with the Keystone pipeline protests and the recent direct action of the Valve Turners.

    But they are looked upon with some disdain by the climate intelligentsia, who are united in their belief that such strategies are economically suboptimal and politically counterproductive.

    Now a pair of economists has offered a cogent argument that the activists are onto something — that restrictive supply-side (RSS) climate policies have unique economic and political benefits and deserve a place alongside carbon prices and renewable energy supports in the climate policy toolkit.

    “In our experience,” the authors write, “the climate policy community has for too long been excessively narrow in its preference for certain kinds of policy instruments (carbon taxes, cap-and trade), largely ignoring the characteristics of such instruments that affect their political feasibility and feedback effects.” I have written the same thing many times, so I think a climate policy argument that takes politics seriously deserves a close look.

    To understand it, it helps to have a framework for classifying climate policies.

    The four quadrants of climate policy
    Climate policies can apply to the supply side (production of fossil fuels) or the demand side (consumption of FF), and they can be restrictive or supportive. That creates a grid with four quadrants:

    1. Restrictive supply side: policies that cut off FF supply, including declining quotas, supply taxes, and subsidy reductions
    2. Restrictive demand side: policies that restrict demand for FF, including carbon prices and declining emission caps
    3. Supportive supply side: policies that support the supply of FF alternatives, like renewable energy subsidies and mandates
    4. Supportive demand side: policies that support demand for FF alternatives, like subsidies for purchase of energy-efficiency appliances or favorable government procurement policies…”

    https://www.vox.com/energy-and-environment/2018/4/3/17187606/fossil-fuel-supply

    (Thanks to sig at asif for this)

    Liked by 1 person

    Reply
  3. Dramatically incorrect statement here, Abel. Elon Musk did not support Trump during the 2016 campaign. In fact, he came out publicly against Trump.

    Elon has been critical of China’s restrictive trade policies with regards to electrical vehicles coming from overseas automakers. But it’s a far cry from saying that this criticism is support of the Trump campaign or even of Trump himself.

    https://www.wired.com/story/musk-trump-twitter-tariff-tiff/

    Like

    Reply
  1. Tesla Model 3 Production Keeps Ramping Higher — Hitting Near 2,400 Per Week in Early April | robertscribbler
  2. Tesla Model 3 Production Keeps Ramping — Hitting Near 2,400 Per Week in Early April | RClimate

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