With just four weeks left in the fourth quarter, Bloomberg Model 3 tracker estimates Tesla has built 38,037 Model 3s in Q4.  If Tesla keeps up the current pace the company will get closer to 55k units for the quarter, slightly better than the 53,239 Model 3s the company produced in the third quarter of 2018.

Bloomberg Model 3 Production Estimate December 3 2018
Bloomberg Model 3 Production Estimate December 3 2018

For Tesla, a slightly better production performance will not be a great way to finish its fiscal year. After delivering about twice as many Model 3s in the third quarter as the company did in all previous quarters combined, Tesla will try to finish the fourth quarter on a high, not with a couple of percentage point improvement.

According to recent media reports, Tesla is targeting a production rate of 1000 Model 3s per day. If achieved and sustained it will allow Tesla to build more than 25,000 Model 3s in December and take the company’s fourth-quarter Model 3 production past 60,000 units.

In the third quarter, Tesla registered nearly 61.5K Model 3 VINs which was a bit more than 53.239k units the company built during the period. Tesla has already registered around 68.23k VINs in the fourth quarter. With four more weeks left in the quarter, Tesla is possibly targeting a +60k production and delivery for the quarter.

  • The highest VIN registered as of today is: 186,146

  • Total Model 3s delivered till Q3 2018: 84,230 Units

  • October Sales Estimate: 18,552 Units

For a company that took an entire week to build 793 Model 3s in December last year, it will be a massive achievement to finish 2018 with a max production capacity of 1000 Model 3 units per day.

For Tesla customers, the more the company builds this month the better it is. The first phase of Tesla’s federal tax credit expires on December 31, 2018. Customers who get their car delivered after December 31, 2018, will only be eligible for a tax credit of $3,750 instead of $7,500.

Tesla is still taking in orders for all variants of Model 3 with an expected delivery timeline of late December or January. It will be a close call for customers who are placing their orders now, but as the design studio screenshot below confirms, Tesla still believes that its possible for them to deliver the car in late December.

 

Why Tesla needs a chart-topping December?

Apart from helping US customers avail the full benefit of the federal tax credit, Tesla has plenty of reasons to increase production further. The electric car maker is planning to export Model 3 to Europe and Asia in the first quarter of 2019.

The premium sedan market in Europe is much bigger than the North American market.

Mercedes-C Class, the number one premium luxury sedan in Europe recorded sales of 176,915 units last year. That’s more than 3,400 units per month. Tesla can easily dethrone Mercedes Benz from the number one position in the European market, but the company needs to get its production capacity to meet the demands of three large markets, United States, China, and Europe.

The on-going trade war between the United States and China has made things difficult for US automakers exporting cars to the world’s number one auto market.

With the status of Chinese market remaining fluid for US automakers, Tesla needs to wrest control of the European market. BMW, Mercedes-Benz, and Audi are slowly transitioning towards Electric Vehicles, but scaling production will take at least another few years giving Tesla Model 3 a decent amount of time to capture the market.

The earlier Tesla reaches the top spot, the harder it will become for the competition to challenge them. That’s why Tesla needs to keep improving its production capacity until it maxes out Gigafactory’s planned capacity of 500,000 units per year.