Tesla notes market drop in the USA, China sales surge
Just a few days after Tesla presented surprisingly good quarterly figures, the electric car company is now showing details on regional business development in a press release to the SEC.
Tesla’s sales figures in the US market show a slump by almost 40 per cent during the third quarter, from $5.13 billion to $3.13 billion. According to Reuters, this is the first decline in more than two years. Over the same period, sales in China rose by 64 per cent to $669 million and in the rest of the world by more than $1 billion to $1.83 billion.
Tesla did not respond to a press inquiry on what reasons exactly the company sees for the decline in the US market. Analysts surveyed by Reuters see Tesla’s current business policy rather than a lack of demand as the reason for the US slump. “Musk & Co. are laser-focused on Europe and China for growth, while domestically, core demand is fading relative to other regions,” said Wedbush analyst Dan Ives. However, he added that growth in the US would be more challenging in the future.
In recent months, Tesla has invested not only in Gigafactory 3 in Shanghai, but also the service network in China and Europe. In the past, the service centres had not grown with increasing vehicle sales. Long waiting times and annoyed existing customers were the result – and certainly also the one or other deterred potential new customer. The investment in service was, therefore, a logical consequence of the plan to make Tesla profitable in the long term.
Last week, Tesla had announced a Q3 quarterly turnover of 6.30 billion dollars in the Q3 business figures – but the report did not break this down by region. Tesla was thus quite close to the analysts’ estimate, which had been based on an average turnover of 6.33 billion dollars. Many analysts had not seen only the quarterly profit of 143 million dollars.
Tesla himself had explained the leap back into the black (after two quarterly losses of $702 million and $408 million, respectively) with “fundamental improvements in operational efficiency,” including reduced manufacturing and materials costs. Operating costs are at their lowest level since the start of production of Model 3, according to the annual report.
Tesla had already announced some time ago that it intended to deliver between 360,000 and 400,000 vehicles this year. Now it was said that they were “very confident that they would deliver more than 360,000 vehicles this year”.
Another potentially new sales market has also opened up for Tesla in New York City: The Tesla Model 3 is the first fully electric car to be registered there as a Yellow Cab. If the Model 3, with its lower operating costs, garners the interest of taxi companies, Tesla could also boost sales in the USA again.