Estimate the number of Tesla Model3s in California.

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Estimate the number of Tesla Model3s in California.

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thestork · Answer 1 · 2021-07-05T00:31:14+0000

Clarifications

* Assuming we are talking about actively in use / driveable Model 3s, that are owned by customers. This would exclude Model 3s that are in production, sitting on a lot, and other locations prior to purchase by a customer

* Assuming this also means how many Model 3s owned by someone who resides in CA, vs. the number of Model 3s in CA at a given time by in state or out of state residents

"Facts"

* ~40M residents of CA (rounded)

* ~300M people in the USA. 40M / 300M = 10% (rounded) of US residents live in CA (rounded)

* ~100M households in the USA - 10M located in CA (using that same rounded %)

* Tesla (recently, July 2021) hit a milestone of shipping 200k cars in a month (don't remember if this was total, domestic, etc.)

* 80% of residents are of driving age

** 65% are 19->64 years

** 15% are >65 years

Quick Guesses on Numbers

* Price of Tesla Model 3 - $80k

* Tesla Model 3s have been out for 5 years

* 4 different models of Tesla sedans / SUVs

Calculation

# of Model 3(s) in CA = Total Number of Potential CA Customers * Percentage of Market Penetration (cumulative)

Assumptions

* Customers who own Tesla Model 3s have a minimum annual income of $150k (single) or $200k (married)

* 40% of total possible customers in CA make at minimum those thresholds. That would be about 16M total possible Tesla customers (40% x 400M)

* 70% of those are potential, driving age customers for Tesla (ages 19-65 (65%) + 5% (of the 65%)). That would leave about 10M total possible customers.

* Going to assume that small variances in price is a non issue between a product line of a sedan or SUV type model

* With two models to pick from, I'm going to keep the calculation simple and split the total market into 2.

** 5M customers in CA for Tesla sedans

** 5M customers in CA for Tesla SUVs

* Going to assume the following percentages of market pentration over the 5 years the Model 3 has been available:

** 2016 - 5%

** 2017 - 15%

** 2018 - 30%

** 2019 - 45%

** 2020 - 65%

** 2021 - 80% (To date, mid year 2021)

Do the Math

# of Model 3(s) in CA = Total Number of Potential CA Customers * Percentage of Market Penetration (cumulative)

# of Model 3(s) in CA = 5M * 80%

Answer = 4M

Sanity Check

10M households in CA

We didn't even look at whether a household may have 2, possibly 3 Telsa(s), and whether a household may have more than one Model 3 in their possession at once.

We also didn't consider whether some folks might 'collect' Teslas, and have a garage of them. This would seem to be a small percentage of overall possible volume.

Let's do some modeled math to estimate where we might fall in orders of magnitude in terms of vehicles.

80% of driving age people in CA = 32M. Each of those people own a car.

We know that isn't the case, when you consider public transportation and commuters within large metropolitan areas.

I would guess that 1/2 of that total 32M actually own cars.

That leaves us with 16M

I would also subtract a portion of the 15% (65 years+) from that total to account for folks who are no longer able to drive. Let's go conservative and say 7.5%.

That leaves us with a total possible of 15M.

Tesla has 4M out of 15M possible vehicles on the road? Or around 25%?

That number may be on the high side, but probably isn't too far off.

Another way to do a guy check might be against their production volume.

200k as of July 2020. They ramped up to that number.

Let's say they started at 10,000 / month when vehicle production started. Over 6 years, they worked up to 200k. That would be about an increase of 30k / year.

If we took the average per month over a linear ramp period i.e. 2016 was 10k / month -> 40K month, that would average to about 25k month.

We'd have the annual breakdown per year:

2016 - (30K peak, 20k / month) 240k year

2017 - (60k peak, 50k / month) 600k year

2018 - (90k peak, 70k / month) 1,200k year

2019 - (120k peak, 100k / month) 1,200k year

2020 - (150k peak, 130k / month) 1,600k year

2021 - (200k, peak, 170k / month) 2,100k year

There are some simplifications here, we aren't projecting forward for possible volume for 2021 of course / only counting half the year.

If you total up that production volume, that would be about 7M across (what we're assuming) is all Tesla volumes.

If that is evenly divided across 5 models (assumption from earlier), then we might be looking at an order of magnitude of:

Tesla Model 3s - 700k - 2M

PM Team · Answer 2 · 2020-02-03T18:24:48+0000

I'd make a handful of assumptions before answering this Google PM interview estimation question. Consider these:

Couple assumptions:

40M population in CA
On avg 3 per person per household = ~13M households
On avg 2 cars per household = ~25M cars total in CA
Avg life of car (before replaced with a new car) is ~10 years = so 2.5M cars every year are bought
Out of 2.5M cars sold - assuming 5% is electric = 125K cars each year sold are electric
Assuming 80% market share for Tesla = 100k Teslas
Asssuming 60% of Tesla's sold are model3 = 60k Teslas
Assuming Tesla 3 has been in market for ~2 years = total 120k model 3's
Assuming 1/2 year worth of supply is in car dealrs, transport, factories (located in CA) = +30k
120k (on road for 2 yrs) + 30k (in stock) = 150k total model 3's

PM_NG · Answer 3 · 2021-10-31T20:47:21+0000

Total california population: 40 million

Number of people per family: 2.5

Number of cars/family: 2

20% of family are in city

Number of families: 40/2.5 = 16 million families

20% of the population stays in cities and do not have car: 3 million

Number of family with cars: 13 million

Earning power:

20% high earning family who can afford a car> 50,000 dollars = 2.6 million

assuming 20% of these families have one electric car: 500,000

assuming 10% of electric car is tesla: 50,000 cars/ year

Assuming equal distribution between all Tesla : 15,000 cars

Assuming

Number of years since tesla was released: 3

Total number of tesla: 45K

productmanager1644 · Answer 4 · 2021-01-22T03:10:14+0000

Would appreciate any feedback re. if I made too many assumptions!

CLARIFY:
1. Are we discussing CA in the present day? Assume yes.
2. Do we want to isolate to a specific region of CA or the whole state? Whole state.
3. Do we want to include partially constructured Tesla Model 3s (Tesla factory is in CA) or can we consider only complete cars? Complete cars.
4. Do we want to consider cars sitting in the Tesla factory? Your choice. (Will exclude.)
CREATE EQUATION: I will try to figure out the number of Tesla Model 3s by the demand.
1. Number of people who purchase Tesla Model 3 in 2020 (full year) + purchase of Tesla Model 3 in previous years until mid 2017 (when product began) + purchase of Tesla Model 3 in 2021
BREAKDOWN UNKNOWNS:
1. Number of People who Purchased Tesla Model 3 in 2020: We can find this answer by narrowing the total population of CA with various factors.
  1. Eligible Population Buying a Car:
    1. Total Population of CA: ~ 40M
    2. Average Life Span: 0-80 years old (~ 5M in each 10 year age group)
    3. Age of People Who Would Likely Purchase Car: 20-65 years old (most likely to purchase a new car)
    4. Total Population of People Who Would Likely Purchase Car: 5M people / age group * 4.5 age groups = 22.5M
    5. Total Population of People Who Would Buy New Car This Year:
      1. Assume 1/25 people are buying a new car this year.
      2. 22.5M * .04 = 900K purchasing a car each year (200K / age group)
  2. Population Purchasing Tesla Model 3:
    1. Population Purchasing Electric: Tesla 3 is electric. Assume that younger people are more likely to purchase electric than older. Split group 20-39 and 40-65
      1. 20-39: Assume 25% likely to buy electric. With 2 age groups (20s and 30s), there are 200K * 2 = 400K people.
        400K * .25 = 100K people
      2. 40-65: Assume 10% likely to buy electric. With 2.5 age groups (40s, 50s and 60-65), there are 200K * 2.5 = 500K people.
        500K * .1 = 50K people
    2. Population Purchasing Electric / Tesla: Of the people purchasing electric cars, a portion will be Tesla. Tesla has good brand recognition but there are many electric cars.
      1. 20-39: Assume 10% of cars are Tesla, which seems like it has appeal to younger demographic.
        100K * .1 = 10,000
      2. 40-65: Assume that older people purchasing electric cars are less likely to buy Tesla v. younger group. Only 5% likely to purchase Tesla.
        50K * .05 = 2500
    3. Population Purchasing Model 3 from Tesla: Tesla has a few models. Model 3 is cheaper one / more budget friendly. Assume that younger people are more likely to purchase the Model 3 v. older people will purchase the more expensive model.
      1. 20-39: Assume 60% will be Model 3 purchases.
        10,000 * .6 = 6000
      2. 40-65: Assume 40% will be Model 3 purchases
        2500 * .4 = 1000
      3. Total Model 3 Purchases in CA in 2020: 6000 + 1000 = 7000
2. Previous CA Model 3 Purchases (Mid 2017 - 2019): Let's assume demand for Tesla Model 3 has increased ~10% each year.
  1. 2020: 7000
  2. 2019: 7000 / 1.1 = ~6363
  3. 2018: 6363 / 1.1 = ~ 5785
  4. Mid 2017: (5785 / 1.1) * .5 (for the half year) = 2629
3. 2021 Purchase of CA Model 3: Assuming the 10% increase in demand in CA, the total projected purchases of Tesla Model 3 in CA would be 7700 (7000 *1.1 = 7700). Assuming an even distribution of purchases each month, 7700 / 12 = ~641 cars each month purchased. January is ~2/3 complete, so 641 * .66 = ~423 cars purchased.
TOTAL TESLA 3 IN CA:
1. Year Total Purchased
  Mid 2017 2629
  2018 5785
  2019 6363
  2020 7000
  January 2021 (2/3 of month) 423
2. Total: 22,200 Tesla Model 3 in CA.
ASSUMPTIONS / CONSIDERATIONS:
1. Assumes that none of these Tesla Model 3's have left the state. Although some of the cars may leave the state, there are also people moving into CA, which would help offset the loss though likely not totally evenly.
2. Assumes that each person is only buying one Tesla Model 3. (Rare to have multiple purchases most likely.)

hjc · Answer 5 · 2020-09-01T05:09:59+0000

Clarify

Is the question asking the # of Tesla3 owned in California? [Yes]
I know Model 3 started production in 2017, can I get the total production volume in the US by 2020? [500K]

Approach

I will first estimate the average # of Tesla Model 3 per capita.

Then I can probably adjust the number for California as California has more tesla users due to better climate and better awareness of greener technology.

Assumptions

40 Million population in CA
350 Million population in the US
CA per capita # of Tesla Model 3 doubles the US average.

Calculation

US avg per capita = 500K/350 Million

# CA owned Tesla Model 3 = 500K/350M * 40M * 2 = 120K

P · Answer 6 · 2020-07-16T18:38:01+0000

First, I want to make sure we're aligned on what we're trying to estimate. By "in California", I assume we're talking about Model 3s from any year existing today in California. Not Model 3s sold in CA in a specific year.

Ok, let's start with numbers I'd like to know:

Number of residents in California: 40M
# of vehicles per resident: 0.6?
% of people with sedans in CA
% of people with EVs in CA
Tesla Model 3 market share of EVs in CA

I assume EV ownership is highly correlated with income level, tech savvyness, and also age. In order to simplify our approach, let's assume income is the biggest predictor of EV choice, and of Tesla Model 3 choice in CA.

Estimated number of Tesla Model 3s in CA = Number of residents in California * # of vehicles per resident * % of people with sedans in CA * % of people with EVs in CA * Tesla Model 3 market share of EVs in CA

Income Group	% of people with sedans in CA	% of people with EVs in CA	Tesla Model 3 market share of EVs in CA	Total
Top 20%	95%	10%	90%	8.6%
Middle 60%	90%	5%	80%	3.6%
Bottom 20%	80%	5%	30%	1.2%
				3.4% + 4.2% +.2% = 4.1%

Estimated number of Tesla Model 3s in CA = 40M * 0.6 * 4.1% = 984 K

This number seems to high. My guess is that I overestimated the % of people with EVs, so I would try to get a more reliable estimate on that specific assumption. Also, Model 3s only have been around for three years, and the replacement rate of vehicles is of about 8 years. So I would adjust it down to 3/8 of 984k = 369K.

H P · Answer 7 · 2020-02-05T12:06:43+0000

# of Model 3 = # of people owning Tesla Model3 + Cars in dealerships

Let's calcuclate # of people owning Tesla

Population of CA = 40 MM

If we assume that the population is distributed equally, and max life of 8 years, we can split

0 -10 years = 5MM

11-20 years = 5MM

21-30 years = 5MM

31-40 years = 5MM

41-50 years = 5MM

51-60 years = 5MM

61-70 years = 5MM

71-80 years = 5MM

Assuming people from 21-70 can drive, so we have potential customer base of 30 MM.

Let's assume that car ownership rate is 80%, so that 24 MM people own a car

Model 3 was launched 2 years back and typically people would own a car for 5 years on an average.

Assuming that those 24 MM owners acquired cars gradually i.e. 20% every year, we have 20% of the people buying new cars

So the car demand is 4.8MM annually

Now, assuming that only 20% of the user base can afford cars greater than $40k, we arrive at 960k

Of the 960k users, assuming that 20% buy electric cars, we arrive at 192k electric cars ~200k for ease of calculation

Assuming that 20% of that user base buys Model 3, we arrive at 40k Model 3 buyers in a year

It's been 2.5 years since the launch, so we can anticipate 100k Model 3S in California

Assuming dealership would have stock for a month, that would be 40/12 = 3.3k

Ignored the edge cases wherein there are rental car companies using model 3

Validation:

I recall Tesla was targeting 200k cars per annum when it was launched.

Assuming that, that's the average for the last 2.5 years they have been making it, they would have produced 500K cars

~20% of those are in California and I believe that seems reasonable considering the Tech crowd and the prosperous state that it is.

Year	Total Purchased
Mid 2017	2629
2018	5785
2019	6363
2020	7000
January 2021 (2/3 of month)	423