It’s definitely possible.
Tesla has definitely kickstarted its end-of-the-quarter push to increase sales. According to reports, Tesla is now offering free Supercharging benefits and some discount opportunities on certain models. Then, Electrek got hold of a leaked email from Elon Musk saying, “We have a shot at achieving our first 100,000 vehicle delivery quarter, which is an incredibly exciting milestone for our company!”
- This article comes to us courtesy of EVANNEX (which also makes aftermarket Tesla accessories). Authored by Shankar Narayanan. The opinions expressed in these articles are not necessarily our own at InsideEVs.
Above: A fleet of Teslas (Photo: Casey Murphy, EVANNEX)
Could this vehicle delivery milestone really be achieved? It turns out Tesla delivered a record 95,200 vehicles during the second quarter of 2019. And it’s certainly likely the company will try to pull every possible demand lever to surpass Q2 sales figures and break the barrier of 100,000 units.
With 158,000 units delivered during the first half of 2019, delivering 100,000 units in the third quarter would represent a significant step forward for the Silicon Valley automaker. It will go a long way in helping Tesla achieve its delivery target of 360,000 to 400,000 units for 2019.
The higher Tesla’s Q3-19 sales numbers, the lower the pressure will be in Q4-19. Apart from proving a positive sales trend in Q3, strong deliveries has another desirable side effect: better margins. A steady ramp is always better than an up-down ramp that places enormous pressure on the company’s vendors in the supply chain.
Above: In 2017, Tesla only delivered 103,000 cars in the entire year. Less than two years later, the company could deliver close to 103,000 cars in a single quarter (Instagram: thespring.io)
Tesla has indicated its desire to balance sales over the duration of the quarter instead of peaking at the end of the quarter. Nevertheless, it could prove difficult for Tesla to achieve such a balance. Tesla’s signature end-of-quarter push has one huge benefit, and that’s margins.
By keeping discounts limited to the last few weeks of the quarter, Tesla can improve the ASP (average selling price) of its cars and adjust prices downward only when it feels the need to push demand higher. This could be why Tesla’s sales numbers tend to peak at the end of the quarter — and it’s likely that Q3-19 won’t be any different.
In the first two months of the third quarter of 2019 (July and August), Tesla had delivered 43,125 units in the United States, Canada, and Europe, compared to 37,558 units the company delivered in the first two months of the second quarter (April and May), an increase of 5,567 units. A repeat of Tesla’s performance in June will get Tesla over the 100k/quarter delivery barrier.
Above: Wall Street’s reaction to the likelihood of Tesla’s upcoming 100,000 vehicles delivered in Q3 (YouTube: Bloomberg Technology)
Tesla’s third-quarter prospects were further brightened by China’s decision to offer a purchase tax exemption to the electric car maker.
According to CNBC, the exemption has reduced Tesla’s prices by a massive $14,000. Such a large drop in price is certainly bound to increase sales.
“The lowest-priced standard-range version of that car, which sells for 364,000 yuan (around $51,000) is Tesla’s most popular in China. Orders spiked after Beijing gave dozens of electric vehicle makers there a healthy tax break earlier this month. The ‘purchase tax’ exemption lowers the cost of buying a Tesla in China [by] around 99,000 yuan (about $14,000).” – CNBC
Above: Tesla Model X charging (Photo: Casey Murphy, EVANNEX)
Thanks to the lucky break in China, Tesla looks like it’s ready to breach 100,000 deliveries in Q3-19.
And early indicators in the region appear to be upbeat, according to Barron’s. An analysis of insurance-registration data from investment bank Piper Jaffray suggests Tesla’s China deliveries were up 175% year over year in July and August.
Analyst Alexander Potter concedes, “Teslas are among the only electric vehicles (EVs) that consumers actually want to buy — even in a market like China, where EV models are commonplace.”
Author Bio: Shankar Narayanan is the editor of 1redDrop.com. Has an MBA from Kent State University and an engineering degree from Madurai Kamaraj University. He has been an active contributor to top financial sites like SeekingAlpha and GuruFocus, and has a penchant for talking business, finance, and technology.
- InsideEVs Editor’s Note: EVANNEX, which also sells aftermarket gear for Teslas, has kindly allowed us to share some of its content with our readers, free of charge. Our thanks go out to EVANNEX. Check out the site here.
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