Tesla Inc. has set a new car delivery record for four consecutive quarters, but its winning streak may be in jeopardy as the company faced factory downtime and potential demand uncertainties in the third quarter. CEO Elon Musk had previously warned investors about the impact of factory upgrades on production, and the ongoing inflationary pressure has made it difficult for consumers to make significant purchases like electric vehicles.
Analysts surveyed by Bloomberg estimate that Tesla's third-quarter deliveries will be around 456,722 cars, lower than the 466,140 units delivered in the second quarter. This would be the first decline in deliveries since early 2022. Some analysts have recently revised their expectations, reflecting the uncertainty surrounding the company's performance.
To mitigate the effects of slowing production, Tesla has been lowering prices throughout the year to combat inflation and high-interest rates. For instance, the popular Model Y now starts at $50,490 in the US, a significant decrease from its starting price of $65,990 at the beginning of 2023. Furthermore, Tesla's Model 3 sedan and Model Y SUV qualify for a $7,500 federal tax credit, making them even more affordable for eligible buyers.
The announcement of Tesla's delivery figures coincides with a strike by the United Auto Workers union against major Detroit automakers such as General Motors, Ford, and Stellantis. This strike comes at a time when the industry is transitioning from internal combustion engines to electric vehicles. Tesla's delivery announcement is expected to contribute to the overall milestone attainment of 1 million electric car sales in the US for the first time.
The third quarter also saw the long-awaited refresh of Tesla's Model 3. The automaker introduced a significant facelift to the entry-level sedan, the first since its production began six years ago. While the refreshed Model 3 is yet to be available in the US, its deliveries to European customers are expected to begin in the fourth quarter.
The next eagerly anticipated Tesla model is the Cybertruck, which has drawn attention on social media platforms, including Elon Musk-owned platform X. Although images of the vehicle have been circulated, volume production is still a considerable distance away. While details are scarce, Musk has mentioned that the debut of the Cybertruck will occur in Austin, where the first customer will receive their car. However, specific timelines have not been disclosed.
Analysts are cautious about the Cybertruck's impact on Tesla's delivery numbers, as it is a complex vehicle to manufacture, and production is expected to ramp up gradually. However, once the factory upgrades are complete, Tesla is projected to increase its car production significantly. Analysts estimate that production could exceed 2 million units in 2024.
In conclusion, Tesla's impressive delivery records faced challenges in the third quarter due to planned factory downtime and potential demand uncertainties. Lowering prices has been one strategy to maintain sales amidst inflation and high interest rates. While the refreshed Model 3 and the highly anticipated Cybertruck are expected to contribute to future deliveries, analysts anticipate a steady ramp-up in output once factory upgrades are complete.