Be careful
Despite a record number of deliveries in the third quarter, it is not all roses and moons for Tesla. Never before has the brand produced so many more cars than it delivered, leading to growing and expensive inventories. In addition, the price of its products is rising sharply in the United States, which worries CEO Elon Musk.
Tesla has been working hard in recent years to scale up production capacity, including by opening the so-called Gigafactories in China and Germany. That works well, as a result of which CEO Elon Musk recently expressed the ambition to produce more than 2 million cars per year from 2023. And that despite the chip shortages, which Tesla seems to suffer less than some other brands. Tesla currently has a production capacity of more than 1.5 million cars per year with four of those giga factories.
Good news, you might think. And in a sense it is, were it not for the fact that demand for Teslas is lagging a little bit behind production. Last quarter, the brand produced roughly 22,000 more cars than it sold, writes Automotive News. That’s not an earth-shattering number, but Tesla was nowhere near such a value before. Only at the beginning of the pandemic, when the whole world was plunged into uncertainty, did the brand experience that there was more production than demand for the product. Then it was about a smaller difference between the two.
bad sign
An analysis of the same Automotive News reflects that building up stock is generally a bad sign for automakers. Still, insiders in the market think that demand for Tesla will not be much lower than production for the time being. There is another fact that is worrying: the average price of a new Tesla in the United States has increased by 31 percent in the past year and a half. Prices for other car brands rose on average by 18 percent. Demand for Teslas is expected to continue to lag production if this trend continues. In any case, Elon Musk himself is aware: in July he already expressed his dissatisfaction with the sharply rising prices of his products, which would significantly reduce demand. However, despite the looming recession, he seems to be sticking to the ambition for an annual production of more than 2 million cars from 2023.
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– Thanks for information from Autoweek.nl