Is Elon Musk onto something, after all?
Let’s face it, he was not having a good year.
The tech entrepreneur was sued for libel after a Twitter rant, had a very public breakup with a B-list celebrity and several Tesla vehicles were involved in suspicious crashes involving its Autopilot system.
But with the new year upon us, the cofounder of SpaceX and Tesla finally got some good news: Tesla is now America’s top premium automotive company, according to the Robb Report, Fortune and Forbes.
On Wednesday, the company announced that the electric car company upstart from Silicon Valley delivered more than 90,000 vehicles in the last quarter of 2018, which was an 8% increase from the third quarter, and greater than German auto giant Mercedez-Benz.
The Model 3, an all-electric coupe that can go from zero to 60 mph in 1.9 seconds, was Tesla’s best-selling vehicle with 63,150 vehicles sold. It was followed by 13,500 sales of the Model S and 14,050 Model X cars.
According to updated sales figures, Tesla outsold Mercedes-Benz (66,542), Audi (59,478), Acura (41,830) and Infiniti (33,079) in America with close to 70,000 vehicles sold, and … it is on track to surpass Lexus (78,622) and BMW (71,679) in the final quarter of this year — a remarkable milestone, for a 15 year old company with just 3 models and no dealer network.
On top of that, the backlog of orders has left some die-hard customers waiting years. Vehicles have piled up in lots around California awaiting transport, and Musk said last month that Tesla had moved from “production hell to delivery logistics hell.”
“Although we only sell Model 3, Model S and Model X, our total US deliveries in Q3 were on par with total vehicle deliveries made by our long-established premium competitors, each of which has multiple models and a vast network of dealerships,” Musk said during the carmaker’s third-quarter earnings call.
Before Tesla’s “historic” quarter — Q3 2018, where it posted its first profits in two years — Tesla had been losing money for almost the duration of its existence.
The company has been shedding “sometimes $100 million a week,” Musk said in an interview with Lesley Stahl on 60 Minutes. The company was banking on the Model 3 to turn things around, but first it had to find a way to up its production.
Somehow, he managed to turn things around when he created an ad hoc assembly line in a tent in Tesla’s parking lot in just three weeks. That entrepreneurial “think on your feet” approach helped Tesla and its founder avert disaster.
“When they were just producing the model S and X, they were a niche automaker that really didn’t strike fear into the hearts of automakers,” Jeremy Acevedo, manager of industry analysis for website Edmunds.com, told USA Today. “But now with the Model 3 hitting its production stride they are eating some of these manufacturers’ lunch.”
But Tesla’s ascension is not surprising, said Akshay Anand, executive analyst for Kelley Blue Book.
“Tesla has done a wonderful job building its brand and creating buzz, so much so that it almost seems to transcend automotive at times and enter the ‘lifestyle’ brand fray along with the Googles and Apples of the world.”
Meanwhile, Tesla’s yet to be completed Gigafactory 3 in China escaped serious damage after the facility braved the rains and winds of Typhoon Lekima.
Shanghai city government official Chen Mingbo told Reuters in March that Tesla’s new car assembly factory would be completed by May, with a view to starting production by the end of 2019.