Tesla achieves record-breaking car deliveries following price reductions

Record car deliveries by Tesla during Q2 2023 after lowering prices in various Markets Including USA, UK and China

AUTOMOBILE INDUSTRY NEWS

Salman Chaudhary, Founder Pinkywheels.com

7/3/20232 min read

Tesla achieves record-breaking car deliveries following price reductions-Elon Musk

Tesla says it delivered a record number of vehicles during Q2 2023, after cutting prices to enhance sales. The prices were lowered in various markets including US, UK and China to compete with the competitors.

The majority of production and deliveries were the Model 3 sedan and Model Y crossover, with 460,211 produced and 446,915 delivered. The electric car maker produced 19,489 of the higher-priced Model X and Model S and delivered 19,225.

Earlier this year, Elon Musk, the CEO of Tesla, expressed his belief that prioritizing higher sales over higher profits was the best decision for the company.

On Sunday, Tesla reported delivering 466,140 vehicles in the second quarter, representing an increase of over 80% compared to the previous year.

During the same period, the company ramped up its vehicle production to nearly 480,000 units.

According to Bill Russo, the founder and CEO of advisory firm Automobility, Tesla strategically chose to focus on high-volume manufacturing. This decision was the main driver behind the sales growth, as their popular Model 3 and Model Y benefited from a price competition.

Dan Ives from investment firm Wedbush Securities noted that Tesla's price reductions in China were a clever move that yielded tremendous success.

China stands as Tesla's second largest market, following North America. In the world's second largest economy, Tesla faces competition from local electric car manufacturers and has responded by lowering prices.

Over the weekend, Li-Auto, headquartered in Beijing, announced record-high deliveries of 32,575 vehicles in June, marking their third consecutive month of sales records.

Meanwhile, Nio, based in Shanghai, and Xpeng, based in Guangzhou, experienced notable jumps in deliveries, reaching 10,707 and 8,620 respectively during the same month.

Tesla has also faced increased competition in other regions and the impact of higher borrowing costs for customers. In response, the company has implemented price reductions throughout the year.

In April, Tesla stated that it had no intention of stabilizing vehicle prices, despite the negative impact on profits caused by repeated price cuts and increased costs of raw materials and commodities.

On social media platform Twitter, Musk clarified that their aim was not to initiate a price war, but rather to lower prices in order to make their vehicles more affordable at a larger scale.

Although Tesla's overall revenue for the first quarter increased by almost a quarter compared to the previous year due to higher car sales, their profit dropped by 24% during the same period due to price reductions and increased costs.

Tesla is scheduled to release its financial results for the second quarter on July 19.

Source: BBC

Tesla 3
Tesla 3