Tesla Model 3 Is Expanding Into New Markets

After struggling to ramp production of the Model 3 in the first half of 2018 and other setbacks like the US Securities and Exchange Commission lawsuit against Elon Musk in September of 2018, Tesla had a busy first few months of 2019. The company began deliveries of Model 3 vehicles in Europe in February 2019, introduced new price drops and battery pack options to the Model S and X, announced a charger capacity boost on the Supercharger network to 250 kW, and hosted a launch event for the much anticipated Model Y. The chaos of early 2019 has been a spectacle of sorts leading up to the 1Q sales tally, which resulted in a higher sales volume than 1Q 2018, but 30% fewer sales than 1Q 2019.

Europe Increases Market Share

Deliveries are finally underway in Europe and China 18 months after US customers received Model 3 orders. Data for Chinese Tesla deliveries is limited, but there are signs that Tesla has delivered a large number of Model 3 vehicles in the country, like long wait lines at delivery centers and a large number of Teslas queued-up for department of motor vehicles inspections.

In Europe, Tesla received regulatory approval to commence European deliveries in mid-January 2019 and delivered its first vehicle in early February 2019. The only version of the Model 3 being delivered on the continent is the long-range variant, but Musk announced that the standard and standard-plus versions of the electric sedan are estimated to begin European delivery around September 2019.

In the US, Tesla’s reduced federal tax credit availability led to a reduction in vehicle purchase prices for all models. The price reduction makes the company’s expansion into Europe and China critical to Tesla’s bottom line—it needs to recover costs.

Automakers Hope to Dethrone Tesla with New Battery EV Models

Tesla’s 1Q 2019 sales were strong despite the large number of changes the company made in the first part of 2019. Model 3 expansion into geographies outside of North America will be key, however, for the company’s future growth. Strong sales combined with the announcement that the Model Y will come into production in fall 2020 means Tesla will continue to widen the gap between itself and other OEMs. As of January 2019, around 14,000 Model 3s were preordered across Europe (even before the announcement of the regulatory approval). Due to this enthusiasm for the Model 3, Tesla’s market share should increase considerably in Europe in 2019.

The company aims for the Zeebrugge port in Belgium to be able to handle 3,000 Model 3 vehicles per week, which is a tall order, but shows promising market share trends for the company. Other automakers hope to limit Tesla’s influence by ramping-up production on new long-range battery EVs—Audi e-tron, Porsche Taycan, Mercedes-Benz EQC, and Jaguar Land Rover I-PACE. Regardless of its numerous changes, Tesla’s marketing position is strong going into 2Q and the rest of 2019.