![]() Tesla’s average vehicle transaction price jumped 31 percent to $69,831 in August, compared with $53,132 at the start of 2021, according to the Kelley Blue Book. Tesla chief Musk has acknowledged that ‘demand falls off a cliff’ when prices shoot up Prices at ’embarrassing levels’ “It would be unreasonable to assume that there is: (a) a limit to how much Tesla can continue to increase prices without demand suffering and (b) that the company was not exposed to decelerating macroeconomic growth,” he said in a research note. Morgan Stanley analyst Adam Jonas said he believed Tesla did not face an immediate demand problem, but added a caution on pricing and Tesla’s ability to buck the economic cycle. If Tesla needs to hold more inventory in coming quarters to smooth deliveries and avoid the end-of-quarter rush that has been its norm, that would add to the $1.2bn in undelivered cars it held at the end of the second quarter.Īnalysts believe Tesla still has more demand than it can supply, the bedrock assumption behind its aggressive expansion plan over the next year as it ramps up production at factories in Shanghai, Berlin and Austin, Texas. Tesla blamed transport issues for a delivery total that fell short of Wall Street expectations. While Tesla’s numbers remain low, building inventory has historically been a down-cycle indicator for automakers, forcing markdowns in past recessions of the kind Tesla has not yet faced. The one notable exception was in early 2020, when the COVID-19 pandemic disrupted deliveries. That is the first time it has had to finance that many cars in inventory.įor most of the past three years, Tesla has been selling more EVs in a quarter than it can produce. The most immediate concern: Tesla made more than 22,000 more electric vehicles (EVs) than it delivered to customers in the third quarter, data released this week showed. Tesla has navigated supply-chain challenges better than most of its rivals and analysts expect it to post strong growth through next year as it expands output, but there are also indications it is being forced to respond to a tougher market. As recently as July, Tesla Chief Executive Elon Musk said the electric-car maker did not have a problem with customer demand, simply a problem making and shipping all the Model Ys and Model 3s consumers were ready to buy.Īnalysts see early signs of caution for the world’s most valuable car maker, including for its increasingly premium pricing, at a time when the global economy is slowing and expectations for global auto sales are being dialed back.
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