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Ok, let's take a look at this;
This will depend on the water heater, if it is a 20 Amp hookup you will be fine, but if it is a 30 amp hookup you need to use 10 gauge wire.
Here is a commonly used table to go by
Suggested Gauge vs. Breaker Amp For Copper branch circuits and feeders.
And a Common used Table for Appliances
Common Usage - Breaker / Fuse size:
Stove / Oven
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Hi and Welcome Back to Just Answer,
You defiantly don't want to exceed the 4500 watts on a 20 amp breaker, this should be fine, the problem though is if the manufacture has guidelines to the proper wiring for the unit, if a problem does happen it may void the warranty.
If you do see that you need to go to the 10 gauge as suggested to place this on a 30 amp breaker, you will need to do that, don't place a 30 amp breaker on the 12 gauge wire. This could become a fire hazard.