Tesla Expected to Report Strong Q1 Sales Amid Price War
Tesla is expected to report record sales for the first quarter of 2023, with the help of cheaper sticker prices and U.S. subsidies. The price cuts, initiated by Elon Musk and company in January, have led to a heated price war, particularly in China, where it is aimed at beating competition and keeping the company ahead of its rivals.
Tesla may have delivered around 430,000 vehicles in Q1, up 6% from the previous quarter and 39% year-over-year (YoY), according to analysts’ estimates, reports Reuters.
According to Refinitiv data, Tesla’s Model 3 sedan and Model Y SUV which are eligible for the U.S. subsidy of $7,500 per car, has resulted in a temporary boost in demand. Levy believes the U.S. subsidy helped pull forward demand.
“The cliff on US federal tax credits for Tesla’s EVs has also had an impact on sales, with many Tesla customers rushing to buy in 2023 to take advantage of the remaining subsidies,” said Levy.
Tesla has also benefited from the ramp-up in production at new factories in Texas and Berlin and the recovery in production in China from COVID-19 lockdowns. The company has forecast a 37% rise in production volume for 2023, reaching 1.8 million vehicles, with Musk saying that deliveries could reach 2 million vehicles, absent external disruptions.
The price war in China has forced Tesla to reduce its prices in the country, resulting in a price war with local rivals such as BYD and Xpeng dropping their prices as well.
In the year to March 19, Tesla’s retail sales totalled 106,915 units, one of the best quarters on record, per data from China Merchants Bank International.
According to analyst @TroyTeslike he released his predictions on Tesla’s first quarter on Friday, at 445,920 cars produced and 427,000 delivered.
Tesla shares have increased by more than 65% in 2023, leading to hopes that the company will win the price war it started, but it remains more than 50% down from its peak in November 2021.
The automaker is likely to release Q1 production and delivery numbers on Sunday morning.