Tesla is determined to continue stimulating demand for its cars as the global economy sends worrisome signals.
In the United States, where many economists predict a Depression This year, the automaker could benefit from the Inflation Reduction Act (IRA) extending a $7,500 federal tax credit to encourage local manufacturing and accelerate mass adoption. apply green vehicles.
IRA flips cards and allows automakers, like Tesla (TSLA) – Get a free report and General Motors (GM) – Get a free reportsold more than 200,000 clean cars — the maximum threshold at which the tax credit begins to drop before it disappears — to return to profitability.
However, price and other criteria may limit the benefits Elon Musk’s team can derive from the legislation.
Without waiting for the law to go into effect, Tesla rolled out major promotions in December. The company began by offering customers who bought a Model 3 and Model Y SUV in December the benefit of a price cut. 3,750 dollars that the group has doubled up to $7,500.
Stock has lost 65% in 2022
These decisions also come after a nightmare year for Tesla stock on the stock market. Tesla stock price is down 65% in 2022.
The United States is not the only market where Tesla is trying to stimulate demand. The company is doing the same thing in China, another major auto market.
And the corporation has no intention of stopping this discount as Tesla has just extended its special offer for Model 3 and Model Y buyers for two more months. They can benefit from discounts of up to 10,000 yuan or $1,450 if they receive the car before February 28, the automaker said on its website.
Specifically, Tesla is extending the subsidy of 6,000 yuan starting in December, while the remaining 4,000 yuan is linked to purchasing insurance through Tesla. This latest offer was introduced last November.
All of these Tesla promotions show that demand for cars from the world leader in electric vehicles is very low. In addition to the economy, the company is also facing increased competition in most markets.
In the United States, established automakers such as GM, Ford (F) – Get a free report and upstarts like Rivian and Lucid offer electric models. In China, Tesla faces competition from BYD and NIO (NIO) – Get a free report, Eg. In Europe, Porsche (POAHY) ,Volkswagen (VWAPY) Audi and BMW (BMWYY) offers attractive electric EVs.
The vehicle deliveries figures for 2022 released by the company on January 2 seem to confirm this trend as they came in below analysts’ expectations. Tesla delivers 1.31 million cars in 2022, up 40% from the same period last year. But this is lower than the 1.33 million average that analysts had expected.
Tesla makes more cars than it sells
The fourth quarter numbers were disappointing. The automaker delivered 405,000 vehicles in the last three months of 2022, far below the 427,000 expected by analysts.
The number of vehicles delivered is the most reliable barometer of vehicle sales for Tesla, which has produced more vehicles than it has delivered. In 2022, production will reach 1.37 million vehicles, including 439,701 units in the fourth quarter.
In the third quarter, the automaker warned that its production during that period exceeded deliveries by about 22,000 units. Chief Financial Officer Zachary Kirkhorn has said that the same is likely to happen in the fourth quarter.
“In terms of deliveries, we expect growth of just under 50% due to increased auto shipments at the end of the year, such as,” Kirkhorn told analysts during the third-quarter earnings call. noted, just above”. “This means that, again, you should expect a gap between production and delivery in Q4 and those in-transit vehicles to be delivered to their customers soon at their destination in Q1.”
