Tesla’s price cuts in markets like the US and China saw its Model Y become the world’s best-selling car in the three months to March, according to research from a UK automotive data analytics company.
That’s not just the best-selling electric vehicle (EV) or sports utility vehicle (SUV) but the world’s best-selling vehicle, overtaking the usual Number 1, Toyota’s Corolla.
Data from by London-based JATO Dynamics this week surprised with the news that Tesla’s Model Y’s Q1 sales reached 267,200 in the first quarter of this year, out selling Toyota Corolla’s 256,400 sales (which include petrol-powered vehicles and hybrids).
That was also ahead of other top contenders like Toyota’s Hilux, RAV4, and Camry (whose sales in the Australian market have slumped this year because of a shortage of electronics for hybrid models).
Model Y sales were well over half Tesla’s first quarter global deliveries of 422,875 units, up 36% from the 310,048 delivered in the same quarter of 2022.
And based on the analysis, there’s every chance the Model Y will end 2023 in top spot – after just four years on the road.
And that success has helped drive the EV revolution and revitalise the Australian lithium and renewables mining and processing sectors.
According JATO, it is the first time that an EV has claimed this title, helped by Tesla’s aggressive price cuts in the US and China at the start of 2023.
The two countries are Elon Musk’s company’s two biggest markets and China is home to the EV maker’s biggest global plant in Shanghai with an output close to one million units a year.
Corolla sales appear to be slowing with the release of hybrids and crossover models (designed to boost sales) have been hit by manufacturing and component shortages.
The Model Y’s move to the top of the global tree is particularly impressive considering the it was launched in 2019, a year after the current iteration of the Corolla appeared.
JATO said the Model Y’s March quarter sales leapt 41% from last year’s 189,000.
And at this growth rate, Model Y could end 2023 with over a million sales. A feat previously only achieved by Toyota Corolla, which sold 1.12 million units in 2022.
The oddity here is that the Model Y sells for more than $US40,000 in many markets – more than $A69,000 here – and it outsold the Corolla whose price starts around $US22,000 in the US (it starts at just over $A28,000 in Australia).
This sales performance is based on two countries – the US and China, Tesla’s top and second placed markets. While sales are rising quickly elsewhere in Australia, and Europe (up 825% in the March quarter), it’s the big two that is lifting sales of the Model Y and Model 3.
China is Tesla’s second-largest market after the US, and its Shanghai plant also produces the Model 3 sedan as well as the Model Y crossover version.
For all of 2022, the Chinese market contributed $1US8.1 billion in revenue to Tesla, or 22% of its $US81.5 billion in total revenue, according to the company’s annual filing with the US SEC in late January.
(Which helps explain the sudden visit to China this week by Musk and the enthusiastic welcome he received from senior members of the government.)
He visited the Shanghai plant (its former boss is now Tesla’s global head of manufacturing). The Shanghai plant has started shipping vehicles to Canada (the first time Chinese-made Tesla’s have been moved to North America). It also exports to countries like Australia and NZ.
The US market contributed $US40.6 billion in revenue, or 49.8%, to Tesla’s revenue line in 2022.
For the full year 2022, Tesla delivered 1,313,851 vehicles worldwide, up 40.4% from 935,950 in 2021.
China’s BYD was well ahead with more than 1.85 million EVs and plug-ins. Tesla just makes EVs and remains the world’s Number 1.
The EV maker delivered 439,770 vehicles in China in 2022, 33% of the total annual global deliveries in 2022.
Tesla’s Shanghai plant produced 727,000 units in 2022, up 49.7% percent from a year earlier.
And JATO’s report revealed that Tesla sold more Model Y vehicles in China than in any other market, including the US, company’s biggest market.
Tesla doesn’t provide a breakdown of regional sales but JATO said that 94,469 were sold in China, more than 83,664 in the United States and 71,114 in Europe.
Reuters reported that while in China this week, Musk checked out the revamped Model 3 which is about to go on preview in that country and on sale in the near future.
Believe it or not but there are still quite a few analysts, investors and commentators who reckon it will be a hard slog to get EVs to the position where they replace ICE powered vehicles (internal combustion engine). They cite a lack of charging stations, a lack of repair facilities and concerns about range and price.
And yet the differing strategies of Tesla and BYD show the way – Tesla has a couple of models with variants and they are costly, compared with rival vehicles.
BYD has a multitude of models and ranges – BYD sells more (including plug-ins which sell well in colder areas of China and in big cities like Shanghai and Beijing).
And, while both are succeeding, the deal Tesla did with Ford last week on the charging connector from 2024, could change the entire industry if others follow.
From next year, Fords will get access to Tesla’s Supercharger 12,000 station network via an adapter sent to all owners, and later, new Fords will be sold with the Tesla connector installed, allowing use without an adapter.
This could mean the death of the “standard” Combined Charging System (CCS) connector used by non-Tesla cars, and there is a strong case that it should.
Tesla recently declared its connector to be entirely open, and people can use it without the company’s permission. It renamed it the “NACS” or North American Charging Standard. That decision could turn out to be the most important one in the evolution of the EV.
