‘Falling prices boosted demand’: Elon Musk is excited for 2023 and wants to sell 2 million Teslas – Business AM

Tesla’s quarterly results are out and better than estimates. Despite the record number of unsold shares, the share price reacted well, ending the session on the positive side. According to Musk, price cuts will strongly boost demand at the beginning of the year. He expects there to be a recession, but for Tesla to hold on and reach a new production record this year. He also gives news about Cybertruck.

In the news : Tesla’s quarterly results, announced overnight from Wednesday to Thursday.

• With a pipe of $5.77 billion (or $1.19 per share) and a turnover of $24.32 billion, partially made by Tesla better than estimates analysts. It is also better than the same quarter in 2021: +37% for turnover, +19% for profit.
• A turnover that essentially consists of the segment of electric vehicles: it represents 21.3 billion dollars.
• On all yearthat’s $81.46 billion in revenue, with $20.85 billion in revenue, up more than 50% in double digits, compared to 2021.

1.3 million electric cars were produced, a huge unsold number

Number : a record number of cars produced and sold, but a failed bet for Elon Musk.

• Over the course of the quarter, Tesla did 439,701 vehicles (+44% compared to the same quarter in 2021), including 20,613 Model S and X (+57%) and 419,088 Model Y and 3 (+43%). In terms of sales, it is respectively 405.278 (+31%), 17,147 (+46%) and 388,131 (+31%).
  • This leaves nearly 35,000 vehicles unsold. A record. And that’s the opposite of a year ago, where Tesla sold more cars (3,000) in the quarter than the company did.
  • This is also one of the reasons that prompted the manufacturer to reduce its prices: emptying stocks. Too much stock always creates deflationary pressure.
• All year round, it is 1,369,611 cars were produced (+47%). Sales: 1,313,851 vehicles (+40%). It’s also a big difference: 56,000 more cars were produced than sold. In 2021, the difference is negative: 930,000 EVs produced, 936,000 sold.
  • It finally turns out that Musk’s eyes are bigger than his stomach. About a year ago, he claimed that by 2022 Tesla would sell and produce 1.5 million vehicles.
• But the fact remains that investors welcome all these numbers: the share price rose by 5% in the hours after the closing (the results were published “after the bell” by the stock market) . It has gained more than 30% since the beginning of the year.

Tesla and the secret weapon during the recession

The important thing : demand is increasing, but what are the prospects for 2023?

• “These price changes really make a difference to the average consumer,” Musk said on the earnings conference call, as quoted by Reuters. According to him, demand is exploding: sales figures are currently double that of production.
• For the rest of the year: recession or no recession? For Musk, this is exactly what will happen, he continued. But despite a “difficult recession”, he is not afraid for Tesla: “Demand will be strong despite a likely recession in the automotive market as a whole. »
• The recession is logically difficult for automakers, because it’s an expensive purchase that consumers tend to put off. Manufacturers must reduce prices to continue to attract customers. In addition, raw material prices are likely to rise, especially for EV manufacturers.
  • And this is where Tesla really has an advantage, a “nuclear option”. Its profit margins per vehicle are much higher than competitors (seven times that of Toyota, for example), which provides more opportunities to reduce prices.

2 million vehicles by 2023

In the future : Musk raises the bar.

• The Tesla boss added that he could produce and sell two million cars by 2023. This is more than the figure presented by Tesla, that is, 1.8 million (which will also be a slower growth than others). years: 37% against an average of 50).
• Musk also gives news about the Cybertruck. One thing that disappointed the fans: the production of the series was postponed until next year.