Tesla behaved as a regular car company – and it was a success

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• Tesla has just announced its second quarter production and delivery figures.
• Elon Musk’s auto company delivered over 466,000 vehicles.
• Tesla faces challenges in the future, however, as production continues to outpace deliveries.

Elon Musk’s Tesla seems to be able to get away with acting like an old-fashioned car company.

Electric vehicle market leader reported yet another record period of deliveries. Just over 466,000 EVs were delivered to customers during the second quarter.

The company, however, produced nearly 480,000 cars in the three-month period ending June 30, which is significantly higher than the number of vehicles it actually delivered.

This is a positive trend from the first quarter when Tesla delivered just over 423,000 vehicles.

The fact that we have yet another record-breaking quarter proves the success of our legacy auto strategy.

Tesla is increasingly behaving like the traditional carmakers that it has long struggled to avoid.

Tesla has a huge inventory compared to demand. Traditional automakers are familiar with this situation.

It's almost like Tesla switched strategies with its competitors. Many of them are currently sitting on a relatively low inventory (and basking in the glory).

Despite the fact that auto production has returned to normal levels following the pandemic, many dealers have historically low inventories of new vehicles on their lots. Interestingly, there is a growing backlog of new EVs, not just Tesla.

Some say that there are still reasons to worry about Musk's company.

Tesla has slashed prices in recent months, despite its bloated inventories and softening of demand. Its vehicles are now cheaper than ever – especially when you factor in the EV tax credit Teslas qualify. According to Bloomberg, the prices of Tesla's different models have dropped anywhere between 14% and 28%.

Musk sacrificed margins in order to increase volume, which may have been a crucial move for the company's global dominance. Tesla is a clear leader in the US electric vehicle market, but it faces increasing competition from China.

Tesla will produce 1.8 million vehicles this year, compared to 1.3 million in 2020. If the inventory continues to grow, Tesla will have to take more action.

In a research note published on June 26, Deutsche Bank analyst Emmanuel Rosner outlined the risks of further price reductions over the remainder of the year, and even into 2024.

Rosner stated that Tesla's long-term story is still intact, and in his opinion, the best of its class.

Source: Tesla

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By: astjohn@insider.com (Alexa St. John)
Title: Tesla acted like a normal car company — and it worked out
Sourced From: www.businessinsider.com/tesla-deliveries-production-acted-like-normal-car-company-it-worked-2023-7
Published Date: Sun, 02 Jul 2023 16:15:00 +0000

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