Tesla’s Model 3 captured 25 percent of EV sales in Europe, becoming an ultra dominant force in the region's electric car market. The American automaker might be able to reach its sales goal for Europe, which may lead to a profit-positive Q4 earnings call.
Tesla dominated EV sales in Europe—by 25 percent. It aimed to deliver 75,000 to 100,000 Model 3 sedansby the end of the year in the region. The all-electric car maker seems close to its goal in Europe, since it already delivered 65,000 vehicles after the third quarter, reported Car Sales Base.
In fact, there are strong speculations that the Tesla Model 3 might already be sold out for 2019 in Europe. As of December, any new reservations made had an estimated delivery time for 2020, meaning 2019 deliveries could already be fully booked. These speculations bode well for Tesla’s Q4 2019 earnings, which is expected to take place sometime in January 2020.
Demand for EV vehicles is on the rise in the region, thanks to Europe's CO2-based laws. This promises a bright future for Tesla’s all-electric vehicles in Europe. Elon Musk’s Gigafactory 4 announcement may have come just in time to set the company’s future spot in Europe’s EV market.
Credit: Megan Gale Adams/Twitter
EV and PHEV sales rose by 38 percent this year, with the former outselling the latter in the first three quarters of 2019. EV sales doubled this year at +93 percent, while PHEV sales dropped -13 percent.
PHEV’s decrease in popularity may be due to the new WLTP method used to calculate a vehicle's CO2 emissions. In Europe, the WLTP method is being used to determine which vehicles qualify for government subsidies or violate CO2 regulations. For example, first-generation PHEVs must meet the 50g/km CO2 standard set by the government.
The CO2-based laws have hit the PHEV market hard. However, the EU super credit system may be more severe. Under the super credit system, automakers will be rewarded extra credits for each car they sell that emits less than 50g/km. The same system has set fines for carmakers whose vehicles emit more than a set limit.
New vehicle tax laws in Austria for new cars registered from October 1. 2020:— Raffael (@raffaeru) December 2, 2019
The tax will now be based on the emissions and no longer on the horsepower.
For EVs as usual 0€/year. pic.twitter.com/yDedy1td3h
The EU super credit system is expected to start in 2020. As such, many automakers—specifically those that sold PHEVs—have already begun making arrangements, probably to avoid the EU super credit system's fines.
Tesla’s vehicles are well within the bounds of CO2 laws in Europe, which is probably why the Model 3 is so popular. Tesla may need to prepare for even more demand when Model Y deliveries begin.
Gigafactory 4 in Berlin may help the company meet demand and make deliveries on time in Europe. Tesla has already started laying the groundwork for its European headquarters. Recently, Tesla set up a European stock corporation, which will be placed in Brandenburg.
Gigafactory 4 is scheduled to start with Model Y, instead of Model 3. With this decision, Tesla seems to be thinking ahead to prevent any setbacks.
2020 may be the year Tesla lays the foundation for its global expansion in China and Berlin. The success of Gigafactory 3 and Gigafactory 4 could determine Tesla’s place in the global auto industry next year.
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