Tesla Model 3 Breaks into Top 10 U.S. Passenger Car Sales in July

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【Summary】Last month, Tesla’s electric vehicle for the masses, Model 3 managed to become the number one leader in its segment.

Manish Kharinta    Aug 11, 2018 5:00 PM PT
Tesla Model 3 Breaks into Top 10 U.S. Passenger Car Sales in July

Last month, Tesla's first electric vehicle for the masses, the Model 3, managed to become the number one leader in its segment. In addition to ranking at the top of its segment, the affordable electric sedan also managed to outsell the combined sales of every other midsize premium sedan. Sales of Tesla Model 3 accounted for 52 percent of all sales in the mid-size premium sedan segment. 

Initial reports hailed the Tesla Model 3 as a promising offering, while also mentioning that it comes with some minor glitches, which were also found in the car's touchscreen user interface. However, the popularity of the electric sedan seems to be unhampered by these technical concerns.

Not only is the Model 3's market share greater than that of mid-size premium sedans, the Model 3 boasts of a growing total addressable market share, which is drawing customers from other segments like hatchbacks and non-premium sedans. 

Tesla is focusing all of its efforts on growing the production output of its mass-market electric vehicle. The company has been producing 5,000 units of Model 3's every week along with 2,000 units of Model X and Model S. The company has stated that it plans on increasing the production of Model 3 to 6,000 units every week by the end of this month.

Eventually, Tesla hopes to manufacture up to 10,000 units of Model 3 every week. The company plans on resolving 'production bottlenecks' to boost its productivity. Tesla has substantiated its decision by explaining that resolving bottlenecks is a much more capital efficient approach to increasing productivity, rather than creating additional assembly lines. 

The company expects that once its suppliers meet Tesla's requirements by increasing capacity in targeted areas, it will be able to achieve the 10,000 Model 3 units per week milestone by the end of this year.

The price of Model 3 is a major contributing factor to its popularity. Prices for the Model 3 start from $49,000 for the standard rear-wheel drive variant. However, this number does not include the incentive deductions available for the car, which include a $7,500 federal tax credit and a $2,500 incentive to car buyers in California. 

This brings the car's on-road price down to $39,000. Tesla projects total gas savings over the course of five years will amount to $3,600, further reducing the cost of the Model 3 to $36,600. The Tesla Model 3 options include a dual-motor all-wheel-drive variant, which is priced at $54,000 and a performance variant which comes with a price tag of $64,000.

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