Featured Despite price cuts, Tesla is making more cars than it can sell

https://electrek.co/2022/10/11/tesla-slips-owns-two-thirds-us-ev-market/

So .... over ½ dozen or so other major automotive companies now finally try to compete with Tesla .... so that Tesla now "drops" to "only" having a ⅔ market share - & it is a bad or worrysome thing. Seems if the other manufacturers were really competing & beating Tesla - it would mean Tesla should now only have a ⅛ market share or less.
I'm sure there must be some rational that Tesla detractors can justify for this hard to reconcile fun fact. Too bad there's no such haters on this forum from which to enquire

You make more cars so you can sell more cars at an affordable price which means more buyers get to enjoy the affordability. The opposite is true as well. Example; If you don't have enough batteries for building a RAV4 prime despite its emense popularity - then dealerships can sell it for more & more...... & suddenly a dealership is making an extra 5 or $10,000 even if the manufacturer is just barely breaking even - if that.
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How does this compare to the rest of the industry?

Tesla didn't sell or deliver 4.1% of the cars they produced last quarter; 4.4% for 2022. The last two quarters was at 7.5% for Toyota, and a higher percentage if Daihatsu and Hino are included. So is this really a big deal for Tesla, or just Tesla clickbait?

Sales, Production, and Export Results for the First Half (April-September) of FY2023 | Sales, Production, and Export Results | Profile | Company | Toyota Motor Corporation Official Global Website

 

clickbait

 

Are the unsold cars just in the pipeline from factory to delivery to ultimate customer point? When you ship M3 cars all the way from Chine to other continents or the S/X from California to Europe there is bound to be a big time gap.

What was the pipeline count in previous quarters? Is there an increase in the percentage of built but not delivered cars to built cars?

 

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There might be a trend with that gap between production and delivered increasing, or it's a temporary thing as Tesla ramped up production to take advantage of the available full tax credit.

 

Yes the percentage increased, but is now decreasing. What happened? Tesla brought more capacity on line and raised prices from too much demand decreased. Tesla went from long wait times to short wait times, which meant they just couldn't sell vehicles in the closest or most profitable locations. This is actually a good thing for tesla and BEV buying public.

Tesla Shorters since 2012 - demand has peaked because cars are too expensive, ignoring that it takes time to build factories and bring costs down. Demand has peaked because rivals will enter and tesla will lose market share.

Charted: Tesla's Unrivaled Profit Margins

Tesla needed to drop prices because with the crazy high profit margins they couldn't sell enough vehicles to keep the new factories pumping out vehicles. So they dropped prices, which had the shorters again claiming was because of no demand.

Last quarter with the lower prices Tesla still has very high profit margins and costs should continue to go down. Still last year they "only" grew at 40% in sales volume, losing market share as the plug in market increased more than that. They are in a good position to grow at 50% this year. I expect profit per car in 2023 will be lower than 2022, but tesla will continue to grow.

The funniest thing in the article is that they pointed out that tesla stock fell 6%. It doesn't mention that the stock was up 60% in Q1 because all the anti tesla hype. Hey I bought tesla stock December and sold in February. I think the stock is riding too high again, but that doesn't mean tesla is doing badly. How much would toyota like to be up 80% in stock price year to date. The lower prices certainly in the short term did not hurt tesla's stock price.

 

Not surprising with the cost of everything going up 15-20% over the past year and, now, massive layoffs starting to come.

And who can afford $43-120K for a new car? Only the rich and powerful and, from I've seen, folks in those brackets are smart with their money and more inclined to buy a Lexus or BMW than a Tesla.

 

Tesla has 2/3 market share (in the US), which is dropping slowly, but still pretty impressive. It's nowhere near that in China or in Europe. But it has the market cap equal to 7 largest auto manufacturers worldwide combined.

When talking stock value, its not just about how the company is doing. It's about how they're doing in relation to growth expectations. You can deny it all you want, having a growing inventory after the massive price cuts should be worrying for Tesla.

 

In the US and China Tesla outsells Lexus, BMW, Mercedes and Audi.

Tesla grew 40% last year and is likely to grow 50% this year.

Tesla is laying off 3.5% of its workforce after greatly expanding it. There is no massive layoff, but higher paid workers will be getting cut by 10% with lower paid workers increasing.

To fuel the massive growth tesla is dipping into their profit margin, a tesla costs less in the US and China than it did last year. This makes Lexus and BMW less not more competitive. Lexus sold 625K vehicles worldwide last year, while Tesla sold 1.3 Million. In 2023 it is likely tesla sells 3x more vehicles that Lexus. BMW sold 2.1 Million world wide last year, and likely will still lead tesla this year, but the gap is falling.

 

Of course that it not true else the inflation rate would be much greater than about 6.5% as it has been reported.

The average new car buyer pays about $49K according to KBB.
So lots of people can afford it.
And I don't think it has anything to do with being powerful...just rich enough to afford it via their monthly payments or money saved during the lockdowns that was put away for a future expense

Mike

 

IIRC Tesla inventory went from about 13 days of production to 16 days, as they increased total production more than any larger car company. Most companies have 50-70 days of inventory. So why is this an issue?

Mike

 

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NOOOO!!!! I CAN'T SEE THE DATA!!!

I hit a paywall.
And I see now that it was deleted before I hit reply. Turning my little attempt at humor into a moment of awkwardness. Such is life.

Tesla has limited number of models that are all sold in the high end market. While growing, they are also aren't at the level of production volume of a car companies that have been around for nearly a century. I like comparison would be of them to Lexus.

The US car market is down. Fewer cars were sold in 2022 than in 2021, which was lower than in 2018. 2023 is better than 2022 so far, but still below 2021.
Total Vehicle Sales (TOTALSA) | FRED | St. Louis Fed
USA - Flash report, Automotive sales volume, 2023 - MarkLines Automotive Industry Portal

While the general car market is down, the EV segment is growing. More competition has shrunk Telsa's share of the segment a bit, but their sales have been increasing over time.
US Car Market Shrunk In 2022 But EV Sales Went Up By Two Thirds
PHEV Sales Drop to 20% of Total EV US Sales Through Q3 2022 – EVStatistics

 

And this is good for me as a customer because...?

If a company can't keep up with demand, that is a reason to not buy from that company.

If my car were totaled tomorrow, would I wait a year to replace it with another Toyota? I think not!

 

It's funny to see the same 10 people finding some non issue to complain about when ever there is a Toyota announcement.

It's a problem for the people who have been insisting that Tesla is selling every car that they can make despite a 4 month to 1 year delay for the buyers of the most popular models. It' seems hard to defend shoddy quality control and high prices as "good enough" when that wait list dwindles to nothing and turns into a surplus.

How does one of those people defend the assertion that "You need to wait for more than a year to buy a Toyota" when the local dealer has around a dozen used Teslas on it's lot today? Obviously someone traded in during an upgrade to a Toyota.'

I could have bought a new 2022 Prius today, or my choice of several new 2023 Rav4 hybrids from the local dealer. There were hybrid Camrys, a nice looking red Supra and 8 Marai FCEVs huddling together in one corner of the sales lot. The salesman was taken aback when I told him that I was not interested in looking at their cars. I'd just left the eye doctor and my eyes were so dilated that I could not see the cars.

What's the math for determining the delta in sales per year when you drop from having 1 year's worth of purchase commitments before the cars are even built to having a surplus for cars that no one has asked for?

 

Personally, I'm hoping to sell my 5 year old Prime for around $28,000, which is a lot more than I paid for it. Then I could pick up a nice new 2023 Prime for only a little more than the equity in my current car.

 

Very glad SOME one said this !!
In a strip mall parking lot - the better ½ while parked & inside shopping - came out to find her PHEV minivan (20K miles on it) smashed in the rear / with back window blown to pieces just 2 weeks ago ......
Body Shop says repairs cannot be started for over 3 months until the replacement parts (new back door & glass) ever comes in.
If you can't even get a car door replaced that been the same production for7 years - how much longer is it going to take for many of the manufacturers to rebuild entire supply chains. Some car builders are really getting sucky.
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