Photo: Tesla
There's a heated debate in the Teslasphere about the need to advertise to accelerate sales. Despite repeated price cuts in the past months, Tesla vehicles don't sell as much as Elon Musk would want. The statistics show that inventories are building up on both sides of the Atlantic, as Musk still claims the demand for his cars is "infinite."
For the past half of the year, people have debated whether Tesla has a demand problem, with Elon Musk denying it and others pointing to sluggish sales. Tesla is used to double-digit growth year over year, but as the volumes increase, the growth is harder to accomplish. Even as the EV maker has operated massive price cuts in recent months, Musk insisted that demand for his cars is infinite, although people don't have money to spend on electric vehicles.
The problem is the price cuts don't seem to work as intended. Once hailed as a master strategist and businessman, Elon Musk appears overwhelmed by the situation, and his obsession with Twitter doesn't help. Even the recent price cuts appear chaotic, followed by price hikes that make no sense. No wonder they don't have the intended effect, and this is becoming obvious in Tesla's quarterly results and inventory trackers.
Earlier this month, Tesla reported a marked discrepancy between the number of Model S and Model X produced and the corresponding sales. Those who pointed to it, myself included, were crucified by Tesla fans that insisted that the difference is justified by the number of cars in transit to various markets. Well, it's not, and we see how the difference is inflating inventories. The biggest offender is the Model X, but the Model 3 numbers don't look that good either.
Troy Teslike, who tracks Tesla production, sales, and inventories, explains that these are not cars in transit to buyers. They don't have a buyer yet and are listed under "new inventory" on Tesla's website. Keep in mind that Tesla inventory doesn't track individual cars, but batches of similar configurations, so the numbers may appear smaller than they are in reality. To put things into perspective, the inventory is now even higher than in January, when Tesla operated its first massive price cuts.
The same picture is revealed by Tesla in its Q1 2023 shareholder deck, albeit it uses the "days of supply" metric. In this case, the Q1 2023 global inventory reached 15 days of supply, up from 13 in Q4 2022 and 8 days in Q3 2022. Many will point to Tesla's increased production to explain the burgeoning inventory. Still, the same shareholder deck shows that Tesla's production has remained flat in the first quarter compared to Q4 2022, at around 420K vehicles.
This shows how Tesla shuffled production even as it ramped up Giga Berlin and Giga Austin. Basically, it slowed production in Fremont to make room for Giga Texas. At the same time, Giga Shanghai reduced production to allow Giga Berlin room to breathe. It will likely continue to do so in the future and even more aggressively as the demand lags production. Perhaps it's time for Tesla to consider paying for advertising?
The problem is the price cuts don't seem to work as intended. Once hailed as a master strategist and businessman, Elon Musk appears overwhelmed by the situation, and his obsession with Twitter doesn't help. Even the recent price cuts appear chaotic, followed by price hikes that make no sense. No wonder they don't have the intended effect, and this is becoming obvious in Tesla's quarterly results and inventory trackers.
Earlier this month, Tesla reported a marked discrepancy between the number of Model S and Model X produced and the corresponding sales. Those who pointed to it, myself included, were crucified by Tesla fans that insisted that the difference is justified by the number of cars in transit to various markets. Well, it's not, and we see how the difference is inflating inventories. The biggest offender is the Model X, but the Model 3 numbers don't look that good either.
Troy Teslike, who tracks Tesla production, sales, and inventories, explains that these are not cars in transit to buyers. They don't have a buyer yet and are listed under "new inventory" on Tesla's website. Keep in mind that Tesla inventory doesn't track individual cars, but batches of similar configurations, so the numbers may appear smaller than they are in reality. To put things into perspective, the inventory is now even higher than in January, when Tesla operated its first massive price cuts.
The same picture is revealed by Tesla in its Q1 2023 shareholder deck, albeit it uses the "days of supply" metric. In this case, the Q1 2023 global inventory reached 15 days of supply, up from 13 in Q4 2022 and 8 days in Q3 2022. Many will point to Tesla's increased production to explain the burgeoning inventory. Still, the same shareholder deck shows that Tesla's production has remained flat in the first quarter compared to Q4 2022, at around 420K vehicles.
This shows how Tesla shuffled production even as it ramped up Giga Berlin and Giga Austin. Basically, it slowed production in Fremont to make room for Giga Texas. At the same time, Giga Shanghai reduced production to allow Giga Berlin room to breathe. It will likely continue to do so in the future and even more aggressively as the demand lags production. Perhaps it's time for Tesla to consider paying for advertising?
These are not cars in transit to buyers. These are cars that don't have a buyer yet. Therefore Tesla listed each car for sale on its website here https://t.co/U1FHPXmQX0 to try to find a buyer. They are called 'New Inventory'. Their total number is at an all-time high in the US.
— Troy Teslike (@TroyTeslike) April 26, 2023
We can look at inventory as days of supply. Here is what it looks like. It's from page 6 of the shareholder letter here: https://t.co/o5HxzjrapH pic.twitter.com/jrPMOGP9JN
— Troy Teslike (@TroyTeslike) April 26, 2023
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