Tesla's electric vehicle deliveries have peaked in the United States and for the past two months have shown back to back declines across the entire model lineup. The Model 3, Model S, and Model X are all well off their high monthly sales rate and have also declined when compared year over year.
One note before we begin our detailed look at Tesla's U.S. market delivery plateau. These Tesla declines are occurring during the very best period of auto sales in the United States -ever. August is shaping up to be the top sales month in the U.S. auto industry ever recorded. Also of note, some green cars, like the Toyota Prius and Prius Prime, were up in August. However, battery-electric vehicle sales have dropped significantly across the board.
Tesla Sales Numbers By Model
The best evidence that Tesla vehicles have reached a tipping point in sales is Tesla's oldest model in the lineup, the Model S luxury/performance sedan. The Model S has been on sales since June of 2012, so it is now entering into its seventh year of sales. The Model S was a game-changer. It was the first "successful" luxury EV and it was a top-seller in the luxury sedan segment for quite a stretch. At its peak, the Model S was selling at a rate of just under 6,000 units per month (December 2016). This year, Tesla is having difficulty maintaining a delivery rate of 1,000 units per month of the Model S. In July Tesla delivered just 975 and in August, Tesla delivered 1,050. Both months were lower than the same month in 2018 and both months are well below Tesla's top month this calendar year of 2,275 units delivered in one month. Without question, the Model S has reached its saturation point in the U.S. marketplace.
In an effort to boost Model S sales, Tesla recently ran a sales promotion offering free Supercharging for life. If this sounds familiar, it is because Tesla originally offered that on all Model S cars, but later canceled that perq.
The Tesla Model X luxury/performance minivan-crossover has always had limited expectations. It is not a rough and tumble luxury off-roader, nor is it an affordable people carrier. Rather, it exists in a small segment of expensive AWD family vehicles that has limited marketability. Without the ability to carry outdoors equipment like kayaks on the roof, and with a price tag well into the mid $100Ks, the Model X is a niche vehicle. Given that reality, it sells very, very well.
However, like the Model S, most buyers who were dying to get one, got one, and many folks followed. The Model X was introduced in September of 2015 and had a disastrous launch. Deliveries didn't pass 1,000 units in a month until the following May due to Tesla factory problems. Once the factory did catch up with demand, sales of the Model X peaked at 4,100 units (December of 2018). This year, Tesla is averaging a very respectable 1,500 units per month, well above the Model S' delivery rate. However, it is clear that the Model X demand has been sated and that the current run rate is its peak of sales for the near future. With a less expensive crossover, the Model Y on the horizon, we expect it will decline in sales to below 1,000 units per month in the near term.
In July Tesla delivered 1,225 Model X vehicles and in August 1,825. Both months were below the same months of 2018 and both are well off the 4,100 delivery rate from just last year.
The Tesla Model 3 premium/performance sedan is still selling very well. It simply crushes the competition in the United States. What used to be called the BMW 3 Series segment is now righty called the "Tesla Model 3 segment." Among Tesla's three models, the Model 3 is clearly the biggest success.
However, Tesla has seen softening of the U.S. market for the Model 3. In a strategic move, Tesla opted to ship a portion of its Model 3 capacity from the U.S across the hemisphere to markets in Europe and Asia (using fossil-fuel-burning, carbon-spewing cargo ships). This has made the demand picture for the Model 3 in the U.S. fuzzy. Perhaps intentionally.
In March of this year, Tesla began discounting new, never-driven Model 3 cars to move them before quarter-end. Heck, every manufacturer does this, but Tesla's CEO had vowed (to CNN) never to discount a new vehicle. Apparently, Elon Musk values quarterly sales figures more than he does his word.
The Model 3 was introduced to owners in July of 2017. After yet another disappointing rollout, the car eventually was produced at full capacity in mid-2018. For six months, Tesla maintained an average of nearly 20,000 Model 3 deliveries per month with a peak month of 25,250 in December of 2018. This year, the monthly average has dropped to about 12,000 units per month, a run rate drop of 40%. In July, Tesla delivered 13,450 and in August 13,150. Both months are lower than the same months in 2018, and both are only about half the top month Tesla has had for the model.
Tesla Demand Picture
Tesla's U.S. sales are not the only indicator of the company's success or its health. The majority of Tesla owners love their cars with a passion unrivaled in the auto industry. Consumer Reports surveys of owners show that they are among the most satisfied vehicle owners in America. Tesla has also been hard at work adding more global capacity in order to serve its customers in overseas markets with the locally-built product. We offer here a glimpse of Tesla's factual sales data for the U.S. market, its largest by far. Without question, deliveries here have declined and all of the evidence we see points to a saturation point for the Model S, a plateau for the Model X, and what may be a temporary (or perhaps not) dip in Model 3 deliveries.
Taking a glimpse at the ridiculously low - and getting lower affordable battery electric vehicle sales in the U.S from other manufacturers gives some credence to the claim that battery-electric vehicles are not succeeding in the affordable segments. The formula may not be viable. Will that also become true for high-priced segments long term? This author thinks not. Luxury segments will continue to electrify at a meaningful growth rate. With Tesla leading the way.
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Do you see a turnaround coming for Tesla sales in the U.S.? If so, tell us when you think it will occur and why.
In addition to covering green vehicle topics, John Goreham covers safety, technology, and new vehicle news at Torque News. You can follow John on Twitter at @johngoreham.
Source Note: Torque News uses Inside EVs for its monthly sales data for Tesla. You can read about how that EV-advocacy publication derives its numbers at the company's site. Its data have proved spot-on for years and are corrected when Tesla files SEC reports quarterly.