American EV giant Tesla is indeed receiving increasingly high demand for its products in January, as claimed by CEO Elon Musk at the company’s Q4 and FY 2022 earnings call.
Tesla has even increased the prices of selected models to maximize and manage the surge in demand. However, the move seems insufficient as Tesla decided to adjust the estimated delivery date for the Tesla Model Y Long Range based on its online configurator.
For context, Tesla delayed the delivery estimate from the initial plan of February-March 2023 to March-May 2023.
Is Tesla having a production issue?
The delay in the estimated delivery of the Tesla Model Y Long Range indicates that the automaker’s production is not keeping up with the demand. It could be a serious problem, given that Tesla currently has two production plants for the Model Y in the US, the Fremont factory and the Gigafactory Texas.
“Thus far in January, we’ve seen the strongest orders year-to-date than ever in our history. We currently are seeing orders at almost twice the rate of production… And we’ve actually raised the Model Y price a little bit in response to that… So basically, price really matters. I think there’s just a vast number of people that want to buy a Tesla car but can’t afford it. So, these price changes really make a difference for the average consumer.
CEO Tesla Elon Musk
It is worth noting that Fremont Factory is among the leading car factories in the US. In fact, it recorded a 550,000 Model 3 and Model Y annual capacity, per Tesla’s Q4 and FY 2022 Update Letter. Meanwhile, the Giga Texas had a 250,000 Model Y annual capacity.
Despite these significant recorded capacities, Tesla seems to be still struggling to keep up with the demand. Well, the surge in demand is not surprising, given Tesla’s major price cuts in major markets in January.
