Tesla Model S U.S. Sales: Peak Or No Peak

| About: Tesla Motors (TSLA)

Summary

There has been talk for the last two years that Model S US Sales may have peaked in 2013.

Model S sales grew significantly in the US in 2015 and was the only car in its class to do so.

I look at Model S sales compared to other cars in the segment and Model S regional sales over time.

In 2015, the Tesla (NASDAQ:TSLA) Model S was the only car that showed growth in sales in the US and also is sold more than any other car in its class:

Source: GoodCarBadCar, InsideEVs

I expect the Model S to keep the top spot in 2016 in the US as the glory of the Mercedes S class model refresh fades. The BMW 7 series may show some growth in 2016 from its refresh but I do not expect it to out-do the Model S.

In general as a large luxury car model gets older, sales drop. The Model S has not succumbed to that yet and sales are growing. Without updating the exterior looks of the car, Tesla has managed several refreshes during the three years that it has sold the car by introducing larger batteries, all wheel drive and arguably the best in class driver assistance package called "Autopilot."

This has kept the sales of their flagship and until recently only available car growing.

Here are what the quarterly global sales of the Model S look like:

Source: TeslaMotorsClub Forum

It is easy to see how Q2 2013 looks like a peak for North American sales. Looking back, it is now easy to see that the reality points more toward Tesla starving North American sales to satisfy European growth. The same pattern repeats in Q1 2014 in Europe.

I have looked at Model S global sales compared to other large sedans before and it was only behind the Mercedes S Class globally. Unless Mercedes can somehow stem the natural decline of the S Class sales in the next two years, the Model S is on track to outsell the S Class globally.

It is very likely that with the Model X, Tesla will eat into the sales of expensive SUVs like the Mercedes GLE, BMW X6 and Cadillac Escalade. It will take a couple of years to see the pattern as Tesla is expected to spend most of this year just satisfying the current order backlog for the Model X.

Thursday (1/14) morning, Tesla reached a low of $195/share and the shares still remain depressed as I write this in the low $200s. In one year Tesla has shown massive growth with Model S deliveries growing nearly 60%, the first phase of their Gigafactory nearing completion and already producing batteries for energy storage, Model X deliveries ramping up and the Model 3 unveil in March. With Panasonic commiting $1.6 billion to the Gigafactory another bear argument about funding the factory bites the dust.

So with everything lining up in the Tesla story and the stock back at the same levels as a year ago - all I can say is it points to this being a screaming buy thanks to the current global macro situation.

Disclosure: I am/we are long TSLA.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.