TESLA is expected to post its first quarterly sales increase this year after car buyers in China, the world’s largest electric vehicle (EV) market, seized on a sweetened government incentive.
The automaker likely delivered around 463,900 cars worldwide in the third quarter, roughly 7 per cent more than the same period last year, according to analysts surveyed by Bloomberg. China’s government recently doubled a subsidy encouraging drivers to trade in older cars for electric models, which helped boost demand the last several months.
“This China strength comes at a very opportune time for Tesla,” wrote analyst Dan Levy of Barclays, who estimates Tesla delivered 470,000 units globally in the third quarter. It’s “helping to offset ongoing weakness in the US and Europe”.
Nine months into a year in which Tesla has warned it may increase sales at a notably lower rate, the EV maker needs to pick up the pace to exceed the 1.8 million cars it delivered in 2023. The Elon Musk-led company has said it’s between two growth waves, with advances in autonomy and introductions of new products expected to follow up its initial success based on the Model 3 and Y vehicles.
The carmaker has teased plans to start producing cheaper models in the first half of 2025 to boost demand among everyday car buyers. Musk has spent much of this year prioritising the building of fully self-driving robotaxi prototypes, which he plans to reveal next week at an event in the Los Angeles area. He’s also promised to start making a humanoid robot, called Optimus, in limited volumes as early as next year.
Musk’s ambitions around autonomy and artificial intelligence (AI) have split investors. He’s come under pressure to build more affordable, conventional EVs to keep Tesla’s profits flowing. He also has a track record of failing to reach technical goals when he says he will. However, many investors think the company is on the right long-term path and the stock has gained as a result of the CEO’s lofty objectives for new products.
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After sliding as much as 43 per cent earlier in 2024, in part due to a surprise sales miss in the first quarter, Tesla’s stock is now slightly up for the year, aided by Musk’s hyping of the company’s AI and autonomy work.
In the US, consumers have a growing number of choices when it comes to EVs. At the same time, high interest rates, the lingering effects of inflation and worries about accessibility to charging networks have kept some potential buyers on the sidelines. Tesla slashed prices throughout 2023 to juice sales, and cutting further would only do more damage to its once-hefty margins.
Musk has said the cheaper vehicles the company intends to introduce by 2025 will provide a boost, but he’s offered few details beyond saying they will be produced on the same manufacturing lines as Tesla’s current lineup.
Sales of the last new product Tesla rolled out, the stainless steel-clad Cybertruck, have been increasing, though the company has never given specific delivery figures. Analyst Ben Kallo of Robert W Baird estimates Tesla sold 20,000 pickups last quarter. BLOOMBERG
