Tesla. Sales stumbled in the first quarter (and a lot) – Observer


Tesla unveiled sales for the first quarter of 2019 and the result was disappointing. After producing 90,700 vehicles in the fourth quarter of 2018 and delivering 86,555 customers, in the first three months of 2019 the American manufacturer manufactured only 77,100 units and delivered 63,000.

There are two ways to look at these numbers, because compared to the same period last year – which all manufacturers turn to – Tesla's sales increased by 110%. Compared with the previous quarter, there are possible explanations for this, since to benefit from the incentives to purchase the trams in the last three months of 2018, Tesla did everything for customers to anticipate the acquisition, which obviously 'dried up' following quarter. At the same time, the fact that the brand now focuses more on the European and Asian markets than on the American market itself led Tesla to have 10,600 vehicles in transit (on ships bound for those destinations) instead of the little more than 3,000 it had in the previous quarter, which softens the break, but does not hide the problems.

When traditional manufacturers with more experience in the market launch a new model, it is ensured that it does not overshadow the vehicle that in the range is positioned in the next higher segment. Tesla did not properly protect the Model S and X, assembling the best batteries in Model 3, doing the same with respect to the screen, driving modes (drift and the like) and fast load capacity, which obviously damaged the tops of range. That's why Tesla has seen the biggest drop in Model S and X, only 12,100 units, about half of what is customary. And because, for the first time, the manufacturer decided not to split sales between the S and the X, we are led to think that the biggest break happened in the S, which suffers more direct competition from Model 3.

In the coming quarters, the situation may come to a standstill, but it will not be easy to prevent Model 3 customers from leaving Model 3 – smaller, especially at the level of the suitcase, but more agile, more fun to drive and more technologically sophisticated, plus much cheaper. In addition, the market has started to anticipate a short update of the interior of the S and X, whose engines will also become more efficient, which allows to increase the autonomy. Simultaneously, the Model S and X should benefit from a higher capacity load capacity, aiming to reduce the time to recharge the battery and bring it closer to the values ​​practiced by Model 3.

With the fall in production and sales, the stock market was immediately resentful, especially since Model 3's profit margins would necessarily be lower than those offered by the S and X. As if this were not enough, the fact that it does not have dealers as with other manufacturers, exposes Tesla to a direct relationship with customers. Hence the confusion that has recently been experienced with an incomprehensible rise and fall in prices, which has neither helped to clarify the changes nor simplified the decision-making of customers.

Overall, Tesla sold 50,900 Model 3 and 12,100 Model S and X units in just one quarter, not bad, especially as Audi, Mercedes and Porsche did not commit to more than 20,000 units (but per year) of their e-tron, EQC and Taycan.

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