Tesla’s Q1 2023 Supply Numbers Are Not Nice Underneath The Floor


Each quarter, Tesla releases supply numbers. There was nice anticipation for the Q1 2023 numbers after Tesla launched huge value cuts. The numbers present progress quarter over quarter and 12 months over 12 months. Digging deeper, there may be some disturbing information.

CNBC, within the article “Tesla stories 422,875 deliveries for first quarter of 2023,” summarizes that 422,875 deliveries have been made in Q1, in comparison with 310,048 in Q1 2022 and 405,278 in This autumn 2022. That’s good for supply progress of 36% and 4% respectively.

Deliveries of the higher-margin S and X got here in at 10,695 for Q1. In Q1 22, Tesla delivered 14,724 of the identical. That’s unfavourable year-over-year progress: -27%. In This autumn 2022, Tesla delivered 17,147 S and X. That offers us -37% progress from the prior quarter.

Mannequin 3 and Y needed to decide up the tempo. 412,180 of these autos have been delivered in Q1 2023, in opposition to 295,324 in Q1 2022 and 388,131 in This autumn 2022. Progress is +39% YoY and +6% QoQ, which is great. The YoY steerage, nonetheless, is beneath Tesla’s goal of fifty% common progress over a few years.

Tesla’s beneficiant valuation is predicated on excessive progress and excessive margins without end, together with Full Self Driving Beta turning into useful. From Reuters:

“The U.S. value cuts on Tesla’s international top-sellers the Mannequin 3 sedan and Mannequin Y crossover SUV have been between 6% and 20%, Reuters calculations confirmed, with the essential Mannequin Y now costing $52,990, down from $65,990.” —Reuters (emphasis added)

Comparable-size value cuts have been introduced in different worldwide markets. Worth elasticity determines how a lot demand goes up when costs go down. Tesla went down in value between 6% and 20% within the US. Gross sales grew 4%.

Let’s take a look at some basic math for instance the change in income.

An instance of constructive value elasticity: value goes down 10%, gross sales enhance 15% ($100 for every unit × 1000 items is our base state of affairs).

Previous: $100 × 1000 = $100,000

New: $90 × 1150 = $103,500

Tesla skilled unfavourable value plasticity, the place gross sales didn’t go up sufficient to offset the drop in value. Let’s see what occurs when costs go down 10% and gross sales enhance 4%.

Previous: $100 × 1000 = $100,000

New: $90 × 1040 = $93,600

That reduces income, fastened bills can be comparable quarter to quarter, and Tesla higher have some magical rabbits to lower prices quicker than income to maintain its excessive margins.

What may need occurred in Q1?

  • US consumers face excessive rates of interest
  • Automobile costs are excessive
  • Affordability as a consequence of greater funds is decrease
  • Individuals are careworn over inflation
  • Tesla continues to develop manufacturing
  • Tesla needed to minimize costs to maneuver most of its manufacturing
  • Some demand bought pulled ahead into Q1 (like our new Mannequin 3 and a number of other others we all know) to reap the benefits of the tax credit score earlier than it expires.

How does Tesla examine to different EV firms?

Tesla’s progress charge 12 months over 12 months is nice. I recognize extra folks proudly owning an EV, which is healthier for all of us. Listed here are some Chinese language opponents and their year-over-year progress.

  • BYD: +80%
  • Li Auto : +66%
  • Tesla: +36%
  • Nio: +20.5%
  • XPeng: -47%

Q2 would possibly show difficult, as credit score situations tighten, banks cut back mortgage volumes, and central banks proceed mountaineering rates of interest. Extra value reductions could also be doable.

Sincerely yours,


Observe: We personal a number of shares of BYD and have a number of brief name choices on Tesla.

Initially printed on the smilingdad web site.


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