Photo: Tesla
Tesla managed a successful turnaround in January following a massive price cut in most markets. Tesla sold 4,241 vehicles in Germany, representing a 912.2% increase over January 2022. It sounds impressive, but the figures don’t tell the whole story.
Tesla is a success story, no matter how hard some people try to present it otherwise. After being in the woods for years, struggling to make ends meet, Tesla has finally made its way out and became an established American carmaker. Critics might argue that Tesla is not perfect and the quality might not be in the luxury car territory, which is true. There is no ideal car manufacturer, and even luxury brands sometimes make mistakes. But Tesla has navigated the last couple of years better than most and is now better positioned to grow.
The Q4 2022 earnings call has shown that Tesla makes more money per vehicle than any other carmaker, which is short of a miracle. This allows the EV maker to juggle with pricing to mitigate any demand problem they might have. The teardown veteran Sandy Munro once said that Tesla could cut its margins in half and still make more money than anyone else in the industry. This continues to be true, even after the recent price adjustment.
The price cuts were somehow controversial, making the existing customers less happy. Not only because they paid more while others bought their Teslas for less but because their cars are now worth a lot less. Resale value matters and this could be a problem over the long term for Tesla. When deciding to buy one of its cars, people would consider how it holds its value over time. This dilutes Tesla cars’ value, although it doesn’t seem to influence the buyers now.
In Germany, especially, customers are flocking to buy Teslas, as sales increased 912% in January over the same period last year. Tesla sold 4,241 cars in the country, compared to only 419 in January 2022. This represents an impressive 2.4% of the German car market. Some might argue that beating the 419-unit result of January 2022 wasn’t hard. It’s true, but it’s also true that January is traditionally a very slow month for car sales. Tesla’s achievement looks more impressive when considering this.
Beating the February 2022 sales result of 5,944 units would be much harder, let alone at a 10x difference. But the analysts still expect sizeable growth, considering that registrations of Tesla vehicles in Germany are traditionally higher towards the end of the quarter. According to Reuters, which cites the German KBA authority, Tesla reported 3,185 units sold in October 2022. Sales then grew quickly to 10,678 in November and 16,948 in December 2022.
Tesla slashed prices in Germany by up to 17% on the Model 3 and Model Y in mid-January. This means that the impact of the massive price cuts is yet to be seen in the registration figures. Delivery times take anywhere between one to three months. Following the price cuts, delivery times in Germany were pushed back by around a month.
The Q4 2022 earnings call has shown that Tesla makes more money per vehicle than any other carmaker, which is short of a miracle. This allows the EV maker to juggle with pricing to mitigate any demand problem they might have. The teardown veteran Sandy Munro once said that Tesla could cut its margins in half and still make more money than anyone else in the industry. This continues to be true, even after the recent price adjustment.
The price cuts were somehow controversial, making the existing customers less happy. Not only because they paid more while others bought their Teslas for less but because their cars are now worth a lot less. Resale value matters and this could be a problem over the long term for Tesla. When deciding to buy one of its cars, people would consider how it holds its value over time. This dilutes Tesla cars’ value, although it doesn’t seem to influence the buyers now.
In Germany, especially, customers are flocking to buy Teslas, as sales increased 912% in January over the same period last year. Tesla sold 4,241 cars in the country, compared to only 419 in January 2022. This represents an impressive 2.4% of the German car market. Some might argue that beating the 419-unit result of January 2022 wasn’t hard. It’s true, but it’s also true that January is traditionally a very slow month for car sales. Tesla’s achievement looks more impressive when considering this.
Beating the February 2022 sales result of 5,944 units would be much harder, let alone at a 10x difference. But the analysts still expect sizeable growth, considering that registrations of Tesla vehicles in Germany are traditionally higher towards the end of the quarter. According to Reuters, which cites the German KBA authority, Tesla reported 3,185 units sold in October 2022. Sales then grew quickly to 10,678 in November and 16,948 in December 2022.
Tesla slashed prices in Germany by up to 17% on the Model 3 and Model Y in mid-January. This means that the impact of the massive price cuts is yet to be seen in the registration figures. Delivery times take anywhere between one to three months. Following the price cuts, delivery times in Germany were pushed back by around a month.
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