Elon Musk promised 50% growth for Tesla in 2023, but it’s off to a bad start

Tesla is posting record deliveries for this first quarter of 2023. Behind these good figures, however, hide several questions about how Tesla will be able to ensure the 50% growth announced by Elon Musk for 2023.

Tesla reported on April 2 that it delivered 422,875 electric cars worldwide in the first quarter of 2023. Delivery volume is up 4% from last quarter, and even more than 36% from the previous quarter. the first quarter of 2022. Would this result have been as good without the significant price drop in January and the numerous end-of-quarter incentives? Certainly not.

Elon Musk may have been too ambitious for Tesla’s growth in 2023. If the Tesla Cybertruck will be able to boost sales results in 2024, there is not much planned in 2023 to boost the growth as much. brand growth. Tesla, however, seems to be planning between 1.8 and 2 million vehicles produced, based on four models, but in reality, essentially two.

Production already exceeding demand

The Berlin and Austin Gigafactories are starting to produce more and more vehicles each week. Berlin has exceeded 5,000 Model Ys per week, while Austin has just passed the milestone of 4,000 models per week. The other factories, notably Shanghai and Freemont, are running at full speed. 

In the first quarter, Tesla announces that it produced 440,808 vehicles, but delivered 422,875 cars. The numbers are broken down as follows:

Model S and X19,43710,695
Model 3 and Y421 371412 180
Total440 808422,875

Some of these vehicles are probably on their way to the customer’s destination countries. Particularly for Model S and X, which should not be produced without request. However, for Model 3 and Y, when we observe what happened at the end of the quarter all over Europe and in the world, we can wonder if Tesla really has customers for all of its production.

What will happen without new discounts or lower prices?

After results below expectations in the last quarter of 2022, Tesla has revised its prices to boost demand. This significant price reduction, between 10 and 15%, applied to all of the brand’s main markets. Demand then revived, but apparently not enough to announce good results. Thus, within a few days of the end of the term, Tesla used and abused the methods of the “old school” namely: open houses, discounts on vehicles in stock, and sponsorship. Everything has been done to make the results exceptional, but what would have been without this sprint in the last week of March?

The results are good compared to the economic context, but they are not exceptional either, according to the various observers. According to a financial analyst interviewed by Bloomberg: “Tesla deliveries were in line with consensus numbers, but they were disappointing compared to some whispered numbers,” said Gene Munster, managing partner of Deepwater Asset Management. “Shipments were up 36% year over year, but Musk’s comment on the last earnings conference call predicted a 50% growth in shipments. They will have to step up the pace of deliveries for the rest of the year.“  

The question is therefore open: what is left in Elon Musk’s sleeve to achieve his growth objectives with the 4 models he has at his disposal? Two axes seem possible:

  • Tesla could open up to new markets. The brand was launched at the beginning of the year in Thailand, it also aimed for a time to open in India. There are still probably new markets to conquer that can boost sales.
  • Another price cut to boost demand — as the announced next-generation Model 3 may not be enough to boost orders.

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