Tesla Motors says reservations for its new Model 3 electric vehicle have jumped to 325,000 at the end of the first week of the product launch, making it the biggest ever such launch with $US14 billion ($A18.5 billion) in implied sales.
“A week ago, we started taking reservations for Model 3, and the excitement has been incredible,” the company announced in a blog on Thursday (US time) titled “The Week that Electric Vehicles Went Mainstream.”
“We’ve now received more than 325,000 reservations, which corresponds to about $14 billion in implied future sales, making this the single biggest one-week launch of any product ever.
Tesla CEO Elon Musk said in a tweet only five per cent of sales had come from people ordering two vehicles. The company noted the interest had spread “completely organically”, with no advertising or paid endorsements. Given the power of its brand, it hasn’t had to.
“Instead, this has been a true grassroots effort driven by the passion of the Tesla team that’s worked so hard to get to this point and our current and future customers who believe so strongly in what we are trying to achieve,” the company said.
“Most importantly, we are all taking a huge step towards a better future by accelerating the transition to sustainable transportation.”
Musk responded to one tweeted question about the “sustainability” of the battery storage that Tesla vehicles use. He replied that there were no rare earths, and the main ingredient was nickel.
Tesla’s reference to EVs going mainstream is the first admission by the company of the scale of what it has achieved. Analysts have written that the response to the Model S, which won’t even enter production for another 18 months, “has changed the game” and signalled the demise of the petrol car. Some say this could come as early as 2025.
Michael Liebrich, the former head of Bloomberg New Energy Finance, and now the chair of its advisory board, doesn’t think it will happen that quickly, but put the launch into some context at a presentation at the BNEF conference in New York this week.
Liebrich noted that – even with earlier figures – the launch of the Model 3 had outstripped the iPhone 6, and the first weekend box office of Star Force Awakens.
Liebrich believes the “cost parity crossover” point for electric vehicles will occur in the early 2020s, based on a continued fall in battery pack price, which will have fallen by 77 per cent from 2010 to widespread Model 3 availability in 2018, and will continue to fall.
Most analysts agree. The different forecasts in uptake depend on what extent people will continue to buy petrol cars, even if there is no economic reason to do so. Tony Seba, for instance, suggests they won’t and believes there will be few if any new petrol car sales beyond 2025.
Liebrich notes that OPEC, representing the big oil exporters, still believes that electric vehicles will only account for one per cent of total car sales in 2040. Yet even on BNEF’s more modest forecasts, the oil industry faces losing 13 million barrels of oil a day in demand, mostly from China and the US.
In the meantime, Tesla says it is focusing on ramping up production rates to meet the huge demand. Already, France has offered Tesla the use of a nuclear generation site that is about to be closed.
On Thursday, we suggested that Malcolm Turnbull, himself an avid fan of the Tesla Model S, and an admirer of Tesla’s ability to replace “industrial relics” with new technologies, offer Tesla the use of one of Australia’s growing industrial relics as a stamp of his true commitment to innovation and the new economy.
Giles Parkinson is a journalist of 30 years experience, a former Business Editor and Deputy Editor of the Financial Review, a columnist for The Bulletin magazine and The Australian, and the former editor of Climate Spectator.