You might know Tesla began 2023 with huge price drops, reportedly selling many cars in the initial quarter, which contradicts what the EV maker has done in the first quarter for many years.
However, if Tesla can produce cars early in the year and deliver them all, it may not need to push as hard later in the year, though it will almost certainly do so regardless.
Tesla has a limited number of shipments in Q1 compared to subsequent quarters nearly every year, which isn’t unusual among automakers.
This was especially true when people relied on the federal tax credit in the United States, and buying at the end of the year meant receiving their tax credit much sooner. However, there are better seasons for car sales after the holidays, in winter.
Tesla is fallen behind every quarter
Tesla has undoubtedly “fallen behind” every quarter, only to strive to make up for it at the end. The same is the case for every year taken.
Tesla may not meet assistance in some quarters for various reasons, but it will make every effort to increase production and deliveries before the year ends.
Elon Musk, CEO of Tesla, has stated several times recently that the company must move away from this absurd end-of-quarter and end-of-year shipping waves.
He explained that it should be fine if a car comes in a driveway in the last week of December or the first few days of January as long as the vehicle was manufactured and is about to be delivered.
If you follow the market, you know it matters, at least to investors and Wall Street. If Tesla fails to meet delivery targets, it doesn’t matter what the explanations are.
The car manufacturer should have planned and set more achievable goals or reduced its guidance following a challenging quarter.
In any case, Tesla appears to have its best Q1 ever, which may make the rest of the year a little less stressful. If Tesla can set significant records for Q1 2023 deliveries, a few hiccups in the future may matter less.
Furthermore, as the year progresses, its factories will remain to be upgraded, and its newest factories will ramp up production.
Tesla is accelerating price cuts
Tesla has provided more practical and achievable delivery guidelines for 2022. Rather than promising a 50% increase in sales from 2022 to 2023, the company is aiming for 1.8 million vehicles this year, though Musk isn’t ruling out 2 million. According to Teslarati, the CEO clarified on the call:
Well — OK. I mean, our internal production potential is actually closer to 2 million vehicles, but we were saying 1.8 million because, I don’t know, there just always seems to be some freaking force majeure thing that happens somewhere on earth
Elon Musk, CEO of Tesla stated on the company’s goal in 2023
Musk then joked that Tesla has no control over “earthquakes, tsunamis, wars, and pandemics.” He indicated that if 2023 goes smoothly and there are no primary supply chain constraints or significant disasters, Tesla may generate 2 million EVs this year.
In the near term, we are accelerating our cost reduction roadmap and driving towards higher production rates while staying focused on executing against the next phase of our roadmap
Tesla’s 2022 Investor Shareholder Deck stated by Teslarati about Tesla’s strategic plans
Tesla is speeding up sales by lowering prices, resulting in lower margins. At the same time, it’s cutting costs, and it’s already identified to have some of the most excellent margins in the business, and by a long shot compared to many competitors.
