Signs Tesla Does Indeed Have Demand Challenges

Final Up to date on: twenty third Could 2025, 03:37 pm

Elon Musk mentioned this week that there aren’t any shopper demand considerations at Tesla*. Nevertheless, he additionally mentioned final yr that they’d have gross sales development in 2024, and it ended up that they had a gross sales decline. He additionally mentioned that Tesla would develop 50% a yr on common within the 2020s, and the corporate isn’t wherever near that. And let’s not get into the opposite issues he’s mentioned which have been absurdly incorrect.

So, what are the indicators that there could also be shopper demand challenges in the intervening time? Initially, Tesla at all times releases higher-trim, higher-profit variations of recent fashions first after which doesn’t provide the cheaper choices till demand for these preliminary variations is waning. The corporate simply launched the brand new Mannequin Y (“Model Y Juniper”) a number of months in the past, and it’s already providing the cheaper RWD model of the crossover. Based mostly on my 13 years protecting the corporate, I can say confidently that model of the Mannequin Y wouldn’t be obtainable but if there was surging shopper demand for the AWD Tesla Mannequin Y. That’s to not say Tesla is determined for gross sales, however it implies that there isn’t almost the gross sales surge that individuals (many critics in addition to bulls) anticipated for the upgraded Mannequin Y. And one wouldn’t count on a extreme gross sales problem for Tesla on this quarter it doesn’t matter what, however this trace doesn’t bode properly for Q3 and This fall.

Replace: I simply acquired the next electronic mail a number of hours in the past with the title “Low APR for Mannequin Y Ends Quickly.“

Tesla is pushing varied incentives over electronic mail currently, because it has executed for the previous yr plus because it has struggled to promote as many automobiles as it might probably produce — and failed in that regard if we’re being utterly trustworthy, as gross sales have been about 30% under manufacturing capability. Nevertheless, even a step additional, I acquired a textual content message from Tesla yesterday pushing me to come back in and check drive a automotive! I had solely acquired 4 advertising and marketing textual content messages from Tesla earlier than this. I’ve a tough time believing that Tesla has resorted to spamming folks with textual content messages, which it hasn’t executed since final July.

Additionally, reportedly, wait time from ordering to supply is sort of brief now in varied key markets, and we’ve seen no indicators of a robust gross sales rebound in Europe — moderately, gross sales appear to nonetheless be cratering in key markets there.

I don’t count on an enormous year-over-year Tesla gross sales drop in Q2. Nevertheless, the indicators famous above inform me that Tesla is certainly having some demand challenges, and if these don’t change quickly, I count on Q3 could possibly be an particularly upsetting quarter for Tesla gross sales. Let’s see what occurs. And inform me if in case you have seen every other clues — professional or con — concerning Tesla shopper demand and gross sales.

(Oh, and we haven’t even gotten to the likelihood that Congress and Donald Trump will kill the $7,500 tax credit score that helps folks purchase Tesla automobiles….)

*“We’ve lost some sales perhaps on the left, but we’ve gained them on the right. The sales numbers at this point are strong and we see no problem with demand,” Musk mentioned this week on the Qatar Financial Discussion board. “The stock wouldn’t be trading near all-time highs if things weren’t in good shape, they’re fine, don’t worry about it.”