Photo: Tesla
With the third quarter sales drop already behind, Tesla focuses on increasing deliveries for the end-of-year push. As part of this effort, the EV maker announced that it would allow the transfer of free unlimited Supercharging to new orders of Model S, Model X, and Model Y by the end of the year.
Although Tesla continued to grow its production and deliveries at the usual double-digit pace, perception changed. Indeed, Tesla confirmed during the third quarter earnings call that it's on track to deliver 1.8 million EVs in 2023, representing a 38% increase over the 1.3 million vehicles delivered in 2022. And yet, everyone sees Tesla's price cuts as a clear indication that demand is not what it used to be.
The price cuts might help expand the total addressable market (TAM), but they come at the expense of shrinking margins. This was obvious during the third-quarter earnings call, as Tesla missed Wall Street estimates on revenue and earnings. The operating margins dropped to 7.6% from 23.2% in Q3 2022, a disappointing result for many analysts and investors. This tanked the stock, as Tesla shares lost almost 14% in the past two days.
Tesla desperately needs to get those 1.8 million deliveries it promised this year. We'll probably see more price cuts but also more creative ways to persuade customers to buy a Tesla by the end of the year. We've already seen Tesla budging on its policies and allowing people to transfer the FSD license to a new car by the end of September. This tactic proved successful because Tesla is trying to do the same for the free unlimited Supercharging clause.
On October 20, Tesla announced that people who buy a Model S, Model X, or Model Y will be able to transfer the free unlimited Supercharging to the new car if they had it on their previous EV. The offer is limited to vehicles delivered by December 31, making it clear that Tesla wants to boost car sales in the quarter. The last three months of the year are traditionally the best for car sales, but a little help doesn't hurt.
Tesla offered free Supercharging when it started selling the Model S and Model X, which was guaranteed for the entire vehicle's life. For those who covered large distances, this offer was good enough to cling to their old cars for as long as possible. The offer was a boon for those using their Tesla Model S or Model X as a taxi or for ride-hailing. Tesla ended it in 2018 when it said it was not sustainable in the long term.
The free unlimited Supercharging transfer is an interesting way to boost sales, especially as Tesla has tried to convince people to give up this perk. Earlier this year, Tesla offered an extra $5,000 discount to owners trading in a Model S or Model X with free unlimited Supercharging. I guess not a lot of them were convinced because Tesla threw in six years of free Supercharging on a new car.
Now, Tesla is going in the opposite direction as it tries to boost end-of-year sales. This means it needs to sell cars more than it wants people to give up free unlimited Supercharging. The only question that remains is, why not the Model 3? This is probably because Tesla doesn't expect to have many Model 3s to sell in the fourth quarter. If this is true, the refreshed Model 3 will not start US deliveries this year.
The price cuts might help expand the total addressable market (TAM), but they come at the expense of shrinking margins. This was obvious during the third-quarter earnings call, as Tesla missed Wall Street estimates on revenue and earnings. The operating margins dropped to 7.6% from 23.2% in Q3 2022, a disappointing result for many analysts and investors. This tanked the stock, as Tesla shares lost almost 14% in the past two days.
Tesla desperately needs to get those 1.8 million deliveries it promised this year. We'll probably see more price cuts but also more creative ways to persuade customers to buy a Tesla by the end of the year. We've already seen Tesla budging on its policies and allowing people to transfer the FSD license to a new car by the end of September. This tactic proved successful because Tesla is trying to do the same for the free unlimited Supercharging clause.
On October 20, Tesla announced that people who buy a Model S, Model X, or Model Y will be able to transfer the free unlimited Supercharging to the new car if they had it on their previous EV. The offer is limited to vehicles delivered by December 31, making it clear that Tesla wants to boost car sales in the quarter. The last three months of the year are traditionally the best for car sales, but a little help doesn't hurt.
Tesla offered free Supercharging when it started selling the Model S and Model X, which was guaranteed for the entire vehicle's life. For those who covered large distances, this offer was good enough to cling to their old cars for as long as possible. The offer was a boon for those using their Tesla Model S or Model X as a taxi or for ride-hailing. Tesla ended it in 2018 when it said it was not sustainable in the long term.
The free unlimited Supercharging transfer is an interesting way to boost sales, especially as Tesla has tried to convince people to give up this perk. Earlier this year, Tesla offered an extra $5,000 discount to owners trading in a Model S or Model X with free unlimited Supercharging. I guess not a lot of them were convinced because Tesla threw in six years of free Supercharging on a new car.
Now, Tesla is going in the opposite direction as it tries to boost end-of-year sales. This means it needs to sell cars more than it wants people to give up free unlimited Supercharging. The only question that remains is, why not the Model 3? This is probably because Tesla doesn't expect to have many Model 3s to sell in the fourth quarter. If this is true, the refreshed Model 3 will not start US deliveries this year.
Order Model S/X/Y for end-of-year delivery to transfer your free unlimited Supercharging → https://t.co/MvlrZN5GYJ
— Tesla North America (@tesla_na) October 20, 2023
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