At the end of April 2021, Elon Musk made a prediction that startled investors and financial analysts.
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"We think Model Y will be the best selling car or vehicle of any kind in the world," Tesla's Chief Executive Officer said, on Apr. 26, 2021 during the company's first quarter earnings' call, referring to the popular SUV that had launched two years earlier and had became popular quite quickly. "Probably next year. I'm not 100 percent certain next year, but I think it's quite likely.. more likely than not, that 2022 Model Y is best selling car or truck... in the world."
The prediction stunned investors. Some saw it as yet another promise from the Techno King which would probably not be kept. Others said that Musk had to set an ambitious goal because of the very good quarterly results announced that day. The company, which at the time was still based in Fremont, Calif., had recorded sales totaling $10.4 billion, almost double compared to the first quarter of 2020, marked by the temporary closure of its factory in Shanghai due to the first cases of the coronavirus. Tesla also posted a net profit of $438 million that quarter, which was the seventh consecutive quarter of profits.
But for Musk, the prediction was real. Tesla (TSLA) - Get Free Report was building two factories, one near Berlin, Germany and another in Austin, Texas. These two factories would produce the Model Y, which was likely to boost sales of this SUV.
The year 2022 has passed and the prediction has not come true. The Model Y became only the third best-selling car in the world, finishing behind two Toyota models -- the Toyota RAV4 and the Toyota Corolla -- according to data from 152 markets collected by Jato Dynamics. About 747,500 units of the Model Y, a 91 percent increase from 2021, were sold last year. This did not prevent Musk from reiterating his prediction to shareholders last August. This time, the billionaire saw the Model Y dethrone the Toyota models in 2023.
The main problem with this prediction is the price. The base price for the Model Year 2023 Model Y is $47,490, compared to $21,550 for the Model Year 2023 Toyota Corolla and $27,575 for the Model Year 2023 RAV4, which limits the impact of geopolitical tensions on sales. The Model Y is not present in emerging markets and developing countries and its sales are exposed to the relations between the United States and China, which are its two main markets.
But Tesla seems to have overcome all these obstacles since, according to data from Jato Dynamics published by Motor1, the Model Y became the best-selling car in the world in the first quarter of 2023. Around 267,200 units of the Model Y were sold worldwide in the first three months of the year, compared to 256,400 Corolla units and 214,700 RAV4 units. Model Y sales are up nearly 69% compared to the first quarter of 2022. This is a huge setback for the Toyota Corolla, whose falling sales in China and the United States cost it a crown it had held for several years.
The list of the Top 5 is completed by two other Toyota models: the Camry sedan and the Hilux pickup truck sold in emerging and developing countries. Several factors worked in favor of the Model Y against the Corolla. Tesla has significantly lowered prices this year in all its markets, which has boosted sales in China and the United States. American consumers buying the vehicle can benefit, since January, from a federal tax credit of $7,500, adopted within the framework of the Inflation Reduction Act (IRA).
Tesla, which does not give detailed sales figures model by model, was delighted with the enormous achievement of the Model Y.
"Thank you to Tesla owners for making Model Y the world's bestselling car in Q1 this year!" the carmaker posted on its Twitter account on May 26.
The message was retweeted by Musk.
Even if it does not end the year in first place, the achievement of the Model Y is enormous because it is the first time that an electric vehicle has outclassed a gasoline car in terms of sales throughout the world. Tesla announced in April that it had delivered 422,875 vehicles in the first quarter, including 412,180 Model Y and Model 3.
The automaker is however currently far behind Toyota (TYIDY) in terms of total sales volumes. The Japanese automaker and its German rival Volkswagen (VWAGY) - Get Free Report continue to compete for the world's top spot. General Motors (GM) - Get Free Report, Ford (F) - Get Free Report and Stellantis (STLA) - Get Free Report also sell far more cars than Tesla.