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A common assumption about Tesla is that demand for their vehicles is high, and that the company is basically limited by their manufacturing capacity. The past few months have reportedly been particularly busy, as a $7500 U.S. tax credit for electric vehicles ended at the start of 2019. But a recent report by Electrik claims that Tesla had over 3,000 unsold Model 3s close to the end of the year, and "sources familiar with the matter" don't think there was a way for Tesla to sell them all yesterday.
When put into perspective, it's really not that bad since it's just about half a week of Model 3 production for Tesla. That said, there was this impression that demand would significantly outpace production in the US this quarter due to the start of the tax credit phase-out. It looks like it wasn't entirely the case. Tesla might be seeing peak demand for the current Model 3 configurations in the US. To be clear, I'm not worried about demand for the Model 3. With European and Asian markets still untapped, Tesla is going to be able to sell many more of those Model 3's. But in the US, I think most potential buyers are now waiting for the cheaper version of the Model 3. Even with the $3,750 difference in the tax credit, the Mid-Range Model 3 is still about $5,000 more expensive than what many reservation holders expected to pay for the vehicle.
When put into perspective, it's really not that bad since it's just about half a week of Model 3 production for Tesla. That said, there was this impression that demand would significantly outpace production in the US this quarter due to the start of the tax credit phase-out. It looks like it wasn't entirely the case. Tesla might be seeing peak demand for the current Model 3 configurations in the US. To be clear, I'm not worried about demand for the Model 3. With European and Asian markets still untapped, Tesla is going to be able to sell many more of those Model 3's. But in the US, I think most potential buyers are now waiting for the cheaper version of the Model 3. Even with the $3,750 difference in the tax credit, the Mid-Range Model 3 is still about $5,000 more expensive than what many reservation holders expected to pay for the vehicle.