Tesla Motors Inc Model X Sales a Huge Hit – Compared to The Honda Accord PHEV

Elon Musk Tesla Motors Inc (TSLA) and SolarCity Corp (SCTY)

Tesla Motors Inc is not anywhere near mass production on the Model X, the EV SUV that it showed off for the first time in 2012. To date, as far as we know, Tesla Motors has delivered somewhere around 13 units of the car, and it’s not clear how quickly production is going to ramp up. It turns out, however, that a lot of car makers are doing an even worse job than Tesla.

Elon Musk Tesla Motors Inc (TSLA)

EV Obsession published the latest electric car sales numbers on Friday, and quite a few car makers are having a hard time selling their EVs. Tesla Motors sold just 5 Model X EVs during November, but Mitsubishi only sold 4 units of its “i”, while Honda only got rid of a single Accord PHEV, and didn’t manage to sell a single unit of its Fit EV during the period.

Tesla Motors sales start rising

Overall November was quite a bad months for EVs, but Tesla Motors managed to increase its sales month-on-month. That increase was due to a jump in production of the Model S as Tesla Motors added a second line to its Fremont car plant.

Tesla Motors Inc says it will sell 50,000 or so EVs for the full year, but there’s some debate about whether the firm will be able to hit that milestone. It’s clear now that there will only be a handful of Model X deliveries before the end of the year, and that may hurt Tesla’s chances of hitting that target.

In order to get to its full year number Tesla will have to sell 17,000 cars during the quarter. In the month of November, according to the EV Obsession report, Tesla managed to move just 3133 units of the Model S. That’s up from 1600 sales in October, a very impressive 95 percent increase in sales month on month. These figures only account for sales inside the US, so Tesla Motors may be able to fill in the gaps in global sales. During the third quarter the firm sold 11,603 EVs, and about 5,700 of those were in the US.

Assuming the ratio of 50 percent US to international holds, a fairly unrigorous thing to do, Tesla Motors may have sold more than 9,000 cars across the globe through November. That means the firm will need to ship 8,000 cars in December, a whopping rise that may be hard to achieve.

Dan Galves of Credit Suisse thinks that Tesla won’t have too many problems hitting its targets for the fourth quarter, and he reckons that there’s massive upside to the stock as a result. In a report published on November 25 Mr. Galves said that a couple of one off demand spikes, including a tax related jump in Denmark, will help Tesla get over the 50,000 line in the fourth quarter.

For November, at least, Tesla Motors was the number one EV seller in the US, selling more than the second and third placed entries combined. The market, however, isn’t looking all that strong.

EV Sales get depressed

The racing performance of Tesla Motors during November was mollified by a slow down in sales across other EVs. Month-on-month sales in November increased 1.4 percent to 10,175, but that rise concealed a slow down in the sales of pure EVs in favor of plug in hybrids. Pure EV sales stood at 6018 for the month, down from 6422 in October.

Plug in hybrids cars, on the other hand, recorded massive sales growth during the period. Sales of the Ford Fusion Energi PHEV jumped 25.5 percent to 944, while sales of the BMW X5 xDrive40e hit 167 in its first month on sale.

Other big winners in the pure EV market during November included Volkswagen and Chevy. Sales of the German firm’s e-Golf entry-level EV hit 472 for the month, up from 119 in October. Sales of the Chevy Volt hit 1,980 during the month, up from 1336, while 166 Chevy Sparks were sold, up from 61 in October.

The reasons for the sales slow down could be simply down to monthly volatility, or demand being pushed forward as buyers wait for the next generation of EVs. Tesla Motors is going to show off its Model 3 some time in the first quarter of 2016, while both Nissan and Chevy are promising new 200-mile range EVs at mid-market prices in the next year or two.

Most of the cars that sold more poorly than the Tesla Motors Model X during the month aren’t really being focused on by the firms making them. The Mitsubishi i has a range of 60 miles or so, and it costs around $30,000. There’s a lot of problems for ICE makers in selling EVs, and that’s likely the reason that Tesla Motors is so far ahead.

Model X sales stay slow

A burning question for investors is when Tesla Motors Inc will be able to ramp up sales of the Model X. Given the lack of shipments so far, it’s unlikely that the firm will be able to get the 1,200 Signature Model X bookings shipped during the fourth quarter, and it’s not clear at all when the firm will be able to get wait times down to a reasonable level.

Tesla opened up its online design studio for those with non-Signature bookings of the Model X during November, but the firm hasn’t been clear with those shelling out for the car about how long they’ll have to wait to get their hands on it. The problems with building the car, as evidenced by Elon Musk’s comments, appear to be huge, and Tesla hasn’t come to grips with them just yet.

The big issue appears to be the second row of seats in the Model X. Mr. Musk says that they’re a “sculptural work of art,” but the firm has had a lot of trouble getting a third party to put them together. In order to solve that problem Tesla Motors had to bring production of the seats in-house, but it’s still slow in getting them into cars and to buyers’ doors.

 Wall Street research houses, in general at least, seem to think that Tesla Motors Inc will solve these problems and that they’re not worth worrying about for the time being. It’s clear from movements in the stock, however, that traders are indeed worried about the lack of Model X shipments, and the firm’s future.

For now those who love Tesla Motors can, at least, be comforted by the notion that the Model X wasn’t the worst performer in November, and that the firm will, eventually, work out the problems and prepare the Model X for the mass market. Until that happens, however, there’s likely to be a lot more volatility in the firm’s stock, and a lot of rumors about the firm’s future.

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