I have updated this with the Chinese 4th week of December Tesla registrations numbers. Since July of this year, Tesla’s order backlog has been shrinking very significantly. After the Shanghai China plant was refurbished to supply more cars, the Chinese order backlog has pretty much vanished. Tesla’s response was to cut prices by up to 10% and then to add on even more incentives, but this seems to have produced only a small bounce in the order book in October which rapidly disappeared in November. In the first four weeks of December the Chinese insurance registrations for Tesla vehicles lag those of November by 11,805 vehicles (43,816 vs 55,621); registrations are actually falling as the month progresses (week 2: 14,366; week 3: 10,254; week 4: 8,915). In China, Tesla tends to sell all of its Shanghai plant’s output locally in the last month of a quarter given the shipping times for exports. The plant has a capacity for 100,000 cars per month, but sales look to be lagging the 62,000 of November. Given the loss of retail incentives in January 2023, a rush of buyers prior to year-end would be expected, but this is not happening for Tesla. It is for BYD, with its first 4 weeks of the month insurance registrations increasing month over month (187,140 vs 161,690), with weekly registrations increasing as December progresses. Unless there is a big surge in Tesla registrations in the last week of the month, and therefore sales, Tesla will be on track to have its lowest last month of the quarter sales since September 2021! That is during a time when the overall Chinese EV market will have grown by about 60%, leading to a significant drop in Tesla market share year over year. Tesla suspended production at its Shanghai plant on December 25th, reflecting possibly both demand issues and the burgeoning Model Y production of Tesla Berlin. Reuters has reported that Tesla will only run production for the first 17 days of January 2023, followed by an extended Chinese New Year shutdown (which is not normal practice for the Shanghai plant).
An Unfolding Tesla Demand Crisis?
An Unfolding Tesla Demand Crisis?
An Unfolding Tesla Demand Crisis?
I have updated this with the Chinese 4th week of December Tesla registrations numbers. Since July of this year, Tesla’s order backlog has been shrinking very significantly. After the Shanghai China plant was refurbished to supply more cars, the Chinese order backlog has pretty much vanished. Tesla’s response was to cut prices by up to 10% and then to add on even more incentives, but this seems to have produced only a small bounce in the order book in October which rapidly disappeared in November. In the first four weeks of December the Chinese insurance registrations for Tesla vehicles lag those of November by 11,805 vehicles (43,816 vs 55,621); registrations are actually falling as the month progresses (week 2: 14,366; week 3: 10,254; week 4: 8,915). In China, Tesla tends to sell all of its Shanghai plant’s output locally in the last month of a quarter given the shipping times for exports. The plant has a capacity for 100,000 cars per month, but sales look to be lagging the 62,000 of November. Given the loss of retail incentives in January 2023, a rush of buyers prior to year-end would be expected, but this is not happening for Tesla. It is for BYD, with its first 4 weeks of the month insurance registrations increasing month over month (187,140 vs 161,690), with weekly registrations increasing as December progresses. Unless there is a big surge in Tesla registrations in the last week of the month, and therefore sales, Tesla will be on track to have its lowest last month of the quarter sales since September 2021! That is during a time when the overall Chinese EV market will have grown by about 60%, leading to a significant drop in Tesla market share year over year. Tesla suspended production at its Shanghai plant on December 25th, reflecting possibly both demand issues and the burgeoning Model Y production of Tesla Berlin. Reuters has reported that Tesla will only run production for the first 17 days of January 2023, followed by an extended Chinese New Year shutdown (which is not normal practice for the Shanghai plant).