Will Tesla Model 3 be 2018 World’s best selling EV?

Tesla has finally revealed production numbers for Q1 2018 on its website (they can be found here). The much awaited news got analysts and media crunching numbers to obtain guidance on the company’s near term progress and longer term expectations. Among the most important news is the confirmation that – despite difficulties – Model 3 production is finally ramping up quickly with almost 10,000 cars produced this quarter, 2,000 of which just last week.

The big news here is double. First, it is confirmed that a substantial number of Model 3s have been produced, finally becoming a major contribution to Tesla’s numbers. With over 34,000 cars built in total, this quarter represents the company’s most productive ever and a 40% increase over Q4 2017. Second, the weekly pace of Model 3 production is increasing almost exponentially, as early bottlenecks are resolved and production is streamlined. While Model S and X show lower numbers than last quarter and the Model 3 ramp-up is itself short of early predictions, this start of year still represents a striking result and allows us to speculate on what 2018 final production numbers may be for Tesla and Model 3 in particular.

Elon Musk’s company remains bullish on Model 3, with an unchanged target of 5,000 units per week by mid-year. As the present pace of 2,000 weekly units is still unproven as a sustainable production rate, we have a long way to go before confirming this is at all possible. We can however use these figures to attempt a forecast of worst and best case scenarios for Model 3 by year end.

Should Tesla manage to ramp up production of its newest model at its target rate, we could estimate an increase to around 4,000 units per week by June, with the 5,000 units weekly target reached in July and kept steadily for the rest of the year. This would be an astonishing feat and would result in numbers between 170-180,000 units for the year. I find these figures very unlikely but nonetheless meaningful, as this is Tesla’s aspiration.

What’s more interesting though is to forecast a minimum production scenario based on current levels and a very slow increase over time. Should Model 3 production only reach 2,500 weekly units in Summer with no further improvements, overall cumulative production by end of 2018 would still reach the 100,000 mark, a goal that is still impressive and attainable. Real numbers may eventually fall somewhere in between scenarios.

A range of 100-180,000 units would place the Model 3 as a very strong candidate for world’s best selling electric car this year, but the top rank is not a given. Main contenders? While GM shows no signs of increasing its Bolt offering worldwide, the 2018 Nissan Leaf is sure to be one. The Leaf 2.0 may reach anywhere between 80 and 150,000 units as – despite the underwhelming specs of the new model – Nissan factories are now in full swing with worldwide availability. But let’s not forget that China, with its own burgeoning EV market, already claimed last year’s crown with the little known BAIC EC-Series, at over 78,000 sales (limited to the Chinese market). Will Model 3 come out on top against 2018 Leaf and little-known Chinese models?

Whichever way you look at it, this is shaping up to be Tesla’s breakthrough year. Even if Model S/X production stays flat, Model 3 could easily allow the car maker to double up on 2017′ success. And while the company’s profitability for 2018 will largely depend on which scenario eventually pans out, Model 3 has now firmly joined its competitors in the global EV market as the car to beat.