Although logistics and rising costs have made a severe impact on Tesla’s productivity, their problems have improved in recent months, but it’s still currently affecting revenue and causing the business to fall short on electric car sales in the three months ending in September.
But the good news is that electric car sales are 50% higher than a year ago, with sales in 2022 so far-reaching $21.45bn (£19.12bn).
Tesla which is led by Elon Musk has seen rapid growth in recent years, with expansion in countries like the US, China, and Germany. These countries have contributed to the growth of the business.
The company delivered a massive 343,000 cars in the quarter. These numbers have set records and made an increase of more than 40% for the same period last year.
Producing more cars that were sold
The car firm produced more cars than were sold, this could mean that demand for Tesla electric cars may be slowing down in key markets like China, where there’s been a major economic downturn due to rising costs and higher borrowing rates. Elon has stated that there is a noticeable decline in sales in China but knocked back any suggestions that actual demand for Tesla products was cooling.
Tesla also presented its delivery figures earlier this month and highlighted the current difficulties in finding additional vehicles to transport cars to their customers.
“There weren’t enough boats, there weren’t enough trains there weren’t enough car carriers, “ he said on a conference call to discuss the results, adding that the firm expects to sell every car it makes.
The highly anticipated Tesla electric truck is due to start deliveries in December 2022. After all, that’s been said and done, profits overall have been reported at $3.3bn, which is also up from last year.
There are questions being asked regarding Tesla’s rate of growth, and also seeing billions of dollars in Tesla stock sales by Mr. Musk as he prepares for the $44bn takeover of the social media company, Twitter. This has also had an adverse effect on Tesla’s share price in recent months.
Tesla’s share price has dropped 40% this year, meaning that billions of dollars have been wiped off the company’s value. As of when this article was published, a further 4% has been wiped off Tesla’s share price in after-market trading on Wednesday 12th of October 2022.
Even Tesla is having a hard time
Sarah Kunst, the managing director of Cleo Capital, told BBC’s Today Programme, stated, “I think Tesla’s had a hard quarter and the market is responding to that.
“The auto industry in general right now is having a very hard time because supply chain problems persist and the batteries – particularly for electric vehicles – are hard to come by,” she said.
“And the reality is that Tesla used to be the only place to go to buy a higher-end electric car and that’s increasingly not the case.”
The number one electric car manufacturer in the US currently is Tesla, but it faces an ever-growing threat in Europe and China, where such cars are more popular. But in the US, Tesla’s rivals have also been getting closer to narrowing the gap between themselves and Tesla’s market dominance.
News has also emerged that the German carmaker BMW has announced an investment of $1.7bn to expand its electric vehicle production in the US.
The one worry that Tesla’s investors are concerned about is Elon Musk isn’t spending enough time on the company and seems to be too focused on his proposed acquisition of Twitter. And as things stand with how the company is currently performing, this is clearly showing with the current turbulent waters Tesla is having to navigate through.
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