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Is Tesla Missing Out on the Auto Industry Boom?

March 17, 2017

Is Tesla Missing Out on the Auto Industry Boom?

In keeping up with their own trend, Tesla sold almost 80,000 vehicles in 2016. Each year, this automotive company sells more cars than it did the previous year. While it may make sense to some that CEO Elon Musk has confidence that his company will deliver 500,000 vehicles in 2018 alone with a million in the year 2020, others see this as overly ambitious.

The upward sales trend for Tesla began when it launched its Model S sedan in 2012. In 2015, the Model X SUV came to the market while the company continued to improve upon their Model S each year. Since 2012, Tesla has gone from selling 30,000 vehicles per year in the United States to 100,000 each year. 

Overall, vehicle sales are on the rise with a record 17.55 million vehicles sold in the United States in 2016. So far, 2017 appears that it may well be another record-breaking year for auto manufacturers. Tesla has 373,000 potential vehicles already sold for 2017 with their preorders of the Model 3. This vehicle will be released later this year and sold for approximately $35,000. However, this is a hefty goal for a company that only produced 80,000 vehicles last year. 

Unfortunately, the auto industry sales boom won’t last forever. Eventually, auto industry experts predict that total vehicle sales will decrease by 15 to 16 million per year. Tesla is also selling vehicles in Europe and China, however, the United States holds the most promise. While Tesla has had some impressive numbers over the past five years, when compared to other companies, this company isn’t pulling its own weight. In comparison, in the United States, Tesla sells in its best year what major carmakers are selling each month.

It’s quite possible, predict industry experts, that Tesla will miss out on much of the auto industry boom due to the fact that it hasn’t had its Model 3 on the market already. Tesla is a company that only moves in defined stages. In some ways, this is a good strategy as they learn to build reliable vehicles and make sure that the money is there to develop new cars. In other ways, Tesla isn’t using its available resources wisely. They could have reached out to contract manufacturers such as Magna, in order to get the Model 3 on the market much sooner. In fact, Tesla always seems to be a few steps behind what is in demand. For instance, it was about three years late to the smaller SUV boom with its Model X. 

With increased inventories, potential rising gas prices, uncertainty in the economy, and more incentives to buy, 2018 may see a downturn in vehicle sales. By then, Tesla may have missed the boat. Demand waits for no one, not even Tesla.

Tags: Tesla