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Tesla anticipates demand for the Model Y to land between 500,000 to 1 million units per year

tesla model Y unofficial

Yesterday, Tesla shared their results from the second quarter which investors and Teslavangelists have been eagerly awaiting. While most key bullet points can be found in our summary here, there was some additional information and insight about the Model Y given in their live webcast.

As some might be aware, Tesla has confirmed their next vehicle, based on the third generation platform, after the Model 3: the Model Y. This is a vehicle that is supposedly going to incorporate Falcon Wing doors and, of course, complete the S-3-X-Y lineup that Musk and company are aiming for.

Accelerate to today, towards the end of the shareholder meeting (around the 57:30 minute mark), Musk states that…

To be clear, the priority vehicle development after the Model 3 would be the Model Y, the compact SUV, because that’s also a car that we expect to see demand in the 500k to 1 million unit per year level.

Musk made this statement without hesitation or his usual warnings of guesstimates, which would seem to imply how confident he is about the demand for the vehicle once it goes into production. To put this into perspective, we can take a look at Audi’s Q series worldwide sales numbers in 2015 as well as how the, most likely, similarly sized Audi Q3 or Q5 did in the U.S. last year – the Model Y has been described as a “compact SUV”.

In 2015, Audi achieved a record year of 1.8 million deliveries from all of their vehicles everywhere they are sold. Further, and more specifically, the whole Q series sold a little over 500k globally. In comparison, Musk is anticipating demand to be between 500k to 1 million units from just this one SUV model worldwide per year. To continue, Audi in the U.S. sold 13,229 Q3 vehicles and 52,006 Q5 units last year for a grand total of 65,235. Analyzing these numbers really makes one understand the intensity and vision that Musk is trying to accomplish in the next few years.

Despite the fact that this seems like a lofty goal, we have already seen Tesla come out on top in some areas of the luxury market. For instance, the very popular Mercedes S class sold 21,934 units in 2015 in the US, while the Model S sold 25,202. This was the first time that Tesla had outpaced Mercedes and was a monumental point for the company because it showed the disruptive capabilities of the company.

The Model 3 and Y would have to achieve a similar impact as the Model S in order to even come close to Musk’s expectations for the vehicle programs.

As the Model X production ramps up, the vehicle will be Tesla’s next test. If it can’t replicate the disruptive success of the Model S in its own segment, it would give a lot more credibility to Musk’s goals. During the conference call, he hinted at the Model X’ early sales and production numbers being in line with the Model S. Due to production problems during the first half of 2016, 2017 will be the Model X’s first full year of production.

Thoughts or comments? Let us know down below!

Featured Image: Tesla Model Y fan rendering by Remco Meulendijk

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