What about Tesla wait times in China?

Complementing the article below, note the following comment by José Pontes in his latest report on electric vehicle sales in China (which he publishes monthly). In this commentary, in addition to references to the year-to-date electric vehicle sales ranking, José discusses the decline in Tesla Model 3 sales in China.

“Tesla’s midsize sedan should rebound in September, probably to #8, but considering that 12 months ago the Model 3 was in second place with around 90,000 registrations, we can see deliveries down 26% year over year. . One should be concerned about the future of the US model in China, especially considering that this drop occurred in the context of a market with triple digit growth rates and that several model 3-***s (namely BYD Seal and NIO ET5) are about to land on the market. Price cut, anyone?…”

However, note that he is referring to the Model 3, which went from 92,755 sales in China in the first 8 months of 2021 to 69,025 sales in the first 8 months of 2022, but Model Y sales went from 59,900 sales to 172,711 sales in the same period. . Clearly, there is a much larger increase in sales for Model Y than there is a decrease in sales for Model 3.

José also noted that Tesla had 10% of Chinese add-on vehicle sales in the first 8 months of 2021, but 7% of Chinese add-on vehicle sales in the first 8 months of 2022.

Above and below are just a few of the pieces of the puzzle regarding Tesla’s history in China at the moment, but look at them carefully and see how you think they fit together and what they mean.

Now let’s move on to what’s happening with Tesla vehicle wait times for new buyers in China.

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By Peter McGuthrie, courtesy of EVANNEX

As Tesla continues to prioritize production at its Shanghai Gigafactory, the automaker’s lead times have decreased in China as demand begins to pick up. Most investors know that China is an important market, and the shift toward reduced wait times on electric vehicles may or may not be significant when considering the company’s share price.

Tesla wait times in China have dropped significantly in recent weeks, reports Barron’s, leaving some investors wondering how the automaker’s shares might be affected. Some of Tesla’s lead times in China have been reduced by more than a month, with all models now having a minimum delivery estimate of just one week and a maximum of 10 weeks.

Previously, the shortest lead time for a Tesla in China is with the entry-level Model Y, which estimated a delivery time ranging from one to four weeks. Now all Model Y and Model 3 variants have estimated delivery times as little as one week.

The longest lead times for its models are the Model Y AWD Long Range and Model Y Performance, each with estimated delivery ranging from 1 to 10 weeks, up from 14 weeks earlier this week.

Tesla has lowered China delivery estimates on three separate occasions since completing its production updates. Also, 14 weeks is a big improvement considering some of Tesla’s models were expected to take 20 weeks last month.

The drop in lead times could indicate multiple different things for Tesla stock, and the bulls and bears are likely to argue one way or the other. For one thing, many investors are looking at demand to help predict the future of the market, and decreasing lead times could indicate a decline in demand overall.

Still, lead times began to decline within a month of Tesla’s production updates at Giga Shanghai, and bulls are likely to debate that the drop represents this increase in production and not a drop in demand, especially with Tesla’s impressive August delivery figures. Additionally, Tesla’s Giga Shanghai became less strained with increased production at Gigafactory Berlin-Brandenburg, as that factory can now accommodate European orders.

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However, whichever way you spin it, delivery expectations for much of the Chinese auto market, including electric vehicle startups and Tesla rivals Li Auto, NIO and XPeng Motors, underperformed significantly. Meanwhile, Tesla nearly doubled its total manufacturing potential worldwide between Gigafactories Shanghai and Berlin.

Only time will tell how Tesla’s reduced lead times will affect its stock, but consumers could also be incentivized to buy electric vehicles with lead times that have been cut by more than a month. According to remarks made during Tesla’s second-quarter earnings call, CEO Elon Musk also appears to think shrinking lead times is crucial, calling the automaker’s long backlog of orders “annoying” to customers. customers.

“That’s annoying. It would be like going to a restaurant and ordering a hamburger and having to wait 3 hours and so on,” Musk said. “You want to get your hamburger right away. Same thing with the car. So we want delivery times are reduced”.


 

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