Remember when ordering a new Tesla meant waiting 3 to 6 months for it to arrive? Those days seem to be over. Reports are emerging that Tesla has an oversupply of unsold cars, filling up parking lots at defunct malls and even outside the Tesla Gigafactory in Texas. Tesla has not confirmed these claims, typically responding with a smiling poop emoji. Classy, Elon.
The buzz about unsold Teslas began late last month when Channel 7 News in Australia aired footage showing a pile-up of Tesla cars at the port of Melbourne. Despite price cuts of up to AUS $20,000, buyers are still scarce. Channel 7 News suggests that the lack of a robust charging network and falling resale values are deterring customers.
Rani Molla from Sherwood News reports that Tesla produced 433,371 cars in the first quarter of this year but delivered only 386,810, leaving about 47,000 unsold cars. This is more than double the surplus from a year ago, marking the biggest imbalance in Tesla’s history. Molla points out that this surplus is due to several challenges Tesla faces, such as slowing electric vehicle (EV) sales growth, increased competition, and erratic leadership. Tesla’s Chief Financial Officer, Vaibhav Taneja, noted that the company expects this inventory build-up to reverse in the second quarter and return to positive free cash flow soon after.
Using satellite images and analytics from SkyFi, Molla observed that the parking lots outside Tesla’s Gigafactory in Austin, Texas, are much fuller now compared to last October. SkyFi also provided images of Chesterfield Mall near St. Louis, where 465 Teslas were counted in May, a stark contrast to none earlier. Drone videos from Tesla’s Fremont factory reveal similarly crowded lots.
In Germany, Handelsblatt reports that unsold Teslas are piling up there too. To clear inventory, Tesla announced a €6,000 environmental bonus for buyers who take delivery by the end of June. Tesla sales in Germany have dropped by about 40% in the first five months of 2024. With this bonus, the RWD Model Y now starts at €38,990, the Model Y Long Range at just under €43,000, and the Model Y Performance at under €54,000. This bonus is similar to a previous government incentive that ended early in 2023.
The Takeaway
What’s the lesson here? Tesla seems to be producing more cars than it can sell, a scenario once thought impossible. CEO Elon Musk confidently predicted selling 10 million cars a year by 2030, but now there’s an oversupply of unsold cars. This surplus reflects a shift in consumer sentiment towards electric cars over the past six months. Whether due to pushback from oil companies or other factors, something has changed.
States like Virginia are pushing back against clean transportation initiatives, and the US and EU are worried about low-cost electric cars from China. Meanwhile, Chinese manufacturers are slashing prices to survive. Even Tesla couldn’t have predicted this market shift.
Images of unsold Teslas sitting in parking lots worldwide aren’t helping the EV revolution. The push for zero-emissions transportation is crucial to reducing emissions from cars and trucks. However, this transition seems to be stalling, with manufacturers now suggesting hybrids as the preferred option. Unlike other carmakers, Tesla can’t pivot to internal combustion engines to calm nervous drivers. Tesla’s future may depend on whether new innovations like autonomous driving can reignite consumer interest.
