Elon Musk Predicts Tesla Will Sell 500,000 Cars in 2018

Michael Walker
Tesla Model 3

Unexpectedly strong demand for the Model 3, scheduled for 2017, is behind the company's aggressive production target.

Tesla CEO Elon Musk surprised analysts in an earnings call by predicting Tesla would sell 500,000 cars in 2018, two years ahead of Musk's earlier prediction.

Extremely strong demand for Tesla's Model 3 — a $35,000 sedan unveiled in March and meant to be Tesla's first mainstream car that has booked more than 400,000 pre-orders — is partly behind the production ramp up. 

The Model 3 is scheduled to enter production in mid 2017, but Tesla's history of production delays with its Model X — deliveries of the gull wing-doored SUV finally started late last year amid quality control issues and low volume because of the car's complexity — make some analysts skeptical that Tesla can hit such an aggressive production target.

Tesla sold 50,000 vehicles last year and has taken more than three years to sell 100,000 of its Model S sedan, its breakthrough vehicle, introduced in 2012. The company said it would deliver 80,000 to 90,000 vehicles this year.

Tesla shrewdly targeted Hollywood with its Model S and today can claim everyone from Steven Spielberg to Jon Favreau, a close friend of Musk's, among its devotees.

The Model 3 already claimed an unsolicited celebrity endorsement when Ellen DeGeneres name-checked the brand on her talk show during a monologue against Mississippi's law that allows businesses to refuse to serve gay couples.

"We need to remember that we are more similar than we are different, and we all want the same things," DeGeneres said. "Love, acceptance, kindness — and I want one of those new Teslas."