By Tesla, the leading electric vehicle (EV) manufacturer, is poised to announce a surge in vehicle deliveries, driven by increased discounts and incentives aimed at bolstering sales amid economic uncertainty and growing competition.
According to the average estimates of nine analysts compiled by Refinitiv, Tesla is expected to report global deliveries of 445,000 vehicles for the April to June period, marking a 5% increase from the previous quarter’s 422,875 deliveries.
Despite CEO Elon Musk’s ambitious plans to boost sales this year, Tesla faces challenges stemming from an aging and limited product lineup, particularly in the face of intensifying competition, particularly in the Chinese market, where demand has softened.
To counter these challenges, Tesla has implemented aggressive price cuts since January, which have impacted its first-quarter margins. Although major price reductions have been avoided in recent months, the company has increased discounts and other sales incentives. In the second quarter, Tesla raised discounts on inventory vehicles to a range of $1,600 to $7,500 and made all Model 3 vehicles eligible for full federal tax credits of $7,500 in the United States starting in June.
Furthermore, Tesla has been offering promotions to stimulate sales. For example, the company sent out an email this week titled “The Most American-Made Cars Are S3XY,” which provides three months of Supercharging for customers who take delivery of a Model 3 by June 30, 2023.
In China, Tesla’s second-largest market, the company offered an insurance subsidy of 8,000 yuan ($1,104) to customers who ordered and completed delivery of an existing Model 3 from the inventory between June 16 and June 30. Analysts anticipate that Tesla will achieve a 13% increase in sales in China compared to the previous quarter, reaching a record number of vehicles.
Despite these efforts, concerns have been raised about the impact of lower prices on Tesla’s margins. Several brokerages have downgraded Tesla’s stock as a result, overshadowing the recent stock market rally driven by automakers’ adoption of Tesla’s charging stations and the general excitement around Tesla’s advancements in artificial intelligence.
While Tesla’s share price has more than doubled this year, some analysts remain cautious about the company’s decision to open its charging network to rival manufacturers. Goldman Sachs, in a recent report, highlighted the risks of potential customer loss to other original equipment manufacturers (OEMs) and the potential decrease in satisfaction among existing Tesla owners.
