Tesla: Q1 2023 Deliveries
What to make of the 422,875 cars delivered? By Benjamin Tan
Tesla (TSLA 0.00) reported Q1 2023 production and delivery numbers on April 2, after a full quarter of unprecedented discounting across all models. Amid softer economic conditions and much higher interest rates, the pricing move was deemed necessary by Tesla to keep its Gigafactories (existing and new) running at full capacities without excess inventory accumulation.
Many other automakers responded in kind after the Tesla offensive. For example, Ford reduced prices on the Mustang Mach-E electric SUV, a competitor to Tesla’s Model Y; both Chevrolet and Hyundai also adjusted their pricing in recent months on their EV line-up.
Q1 2023 Numbers: Summary
Some highlights from the Tesla Q1 2023 production and delivery press release:
Production of 441k up 44% yoy
Deliveries of 423k up 4% qoq and 36% yoy
Vehicles delivered were roughly in line with Bloomberg consensus of around 420k
Model 3 and Model Y deliveries were 412k, up 6% qoq and 40% yoy
Pedal to the Metal: Full Charge towards Scale
For 2023, the company is aiming for a total production of 1.8-2.0 million vehicles, up from 1.37 million in 2022. With Giga Austin and Berlin both ramping up as planned this year, combined with Giga Shanghai expansion, production numbers appear on track for a massive scaling in 2023. This is key to Tesla sustaining healthy gross margins (defined as above 20%) and forging ahead to win more market share globally. No other automaker is producing fully-electric vehicles at the same scale that Tesla does, or generating gross margins anywhere close.
Eyes on Q1 2023 Results: April 19th and What to Look Out For
With the release of full Q1 2023 results coming on April 19th, key items to watch include:
Pricing strategy going forward - will there be more price cuts needed to push demand in line with aggressive production targets?
How will automotive gross margins move over the course of 2023? On one hand, inflationary pressures are easing and unit costs should fall in tandem with scale, but on the other hand, margins are pressured by price cuts
State of car financing market - any changes to lending practices that may impact Tesla in the wake of recent bank runs?
Latest take on production target (1.8-2.0 million) for FY 2023
Chinese market post-lockdown - update on demand
Cybertruck - still on track for end-2023 mass production?
Latest management commentary on 50% CAGR target in the coming years
(Author is long Tesla)
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