Tesla is expected to announce on Tuesday local that its delivery volume in 2023 will reach a new high. That’s largely thanks to the company’s die-hard fan base of CEO Elon Musk and the support of a group of early adopters who are enthusiastic about the new technology. Today, Tesla is gearing up to expand its market appeal.
The electric carmaker may have managed to deliver nearly 483,200 vehicles in the fourth quarter of 2023, according to forecasts by analysts polled by Bloomberg. This means that Tesla may well have passed the 1.8 million vehicle delivery mark last year, which is a record high for the company but still pales in comparison to the sales of traditional giants such as Toyota or General Motors. .
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However, to achieve the next stage of leapfrog growth, Tesla must win the hearts and minds of ordinary consumers. When these consumers choose a car, the most important thing is price and practicality. Tesla’s Chief Financial Officer Vaibhav Taneja admitted in an investor call last October: “Looking at overall car buying trends, we are working hard to attract the next wave of electric vehicles. user.”
But achieving this goal will not be easy. Tesla faces many challenges, including inflation and high interest rates that make consumers more hesitant to make big-ticket purchases. At the same time, many potential buyers also have doubts about the safety of electric vehicles and the completeness of charging facilities. Moreover, as more and more electric vehicle brands enter the market, consumers who plan to switch from fuel vehicles to electric vehicles also have more choices.
To make matters worse, starting on January 1, 2024, some Tesla models are expected to lose up to $7,500 in federal electric vehicle tax credits as stricter U.S. regulations on battery component procurement take effect. The company noted on its official website that some versions of Model 3 will be affected.
In order to enter the mass market, Tesla has spent a lot of money in 2023. The company has slashed prices on all models to boost sales at the expense of profit margins. Especially in China, which Elon Musk calls “the most competitive market,” Tesla’s price cuts are even more astonishing.
However, even so, Tesla still faces challenges from rising stars such as BYD. BYD’s product line is being updated very quickly, putting Tesla under unprecedented pressure. Elon Musk admitted in October last year that Tesla’s much-anticipated futuristic electric pickup truck, the Cybertruck, has not yet reached mass production and is at least a year away from profitability. Analysts estimate the company may have delivered only 200 to 5,000 pickup trucks in the fourth quarter.
Tesla has not yet given a number of cars it expects to deliver in 2024. The company’s Model 3 sedan and Model Y SUV, first launched in 2017 and 2020 respectively, accounted for about 97% of deliveries this year.
Bernstein analyst Toni Sacconaghi wrote in a latest research note to clients: “Amid increasing competition in the electric vehicle space, prices are rising as product lines age. How materially underlying demand might improve without further declines is hard to fathom. More importantly, we don’t think the situation will change much in 2025.” Sacconaghi told Tesla Pulling the stock’s rating is equivalent to a “sell.”
Tesla does have some leverage to drive future sales. For 2023, the company revamped the Model 3 sedan to give it a sleeker look and longer range. Tesla will first launch the car in China before selling it in Europe. The new Model 3 is expected to go on sale in the United States in 2024, although Tesla has not yet determined a specific time. Additionally, the company is said to be planning to launch the new Model Y at its Shanghai factory.
Tesla is also expanding its marketing efforts. The company has built a strong brand without paying for traditional advertising, but it recently started experimenting with Google Ads. Currently, Google is advertising that you can lease a Model Y for $399 per month.
Owuraka Koney, managing director of Jennison Associates, which owns Tesla shares, said he believes the electric car maker is doing a lot to attract the next wave of potential customers.
The Cybertruck attracted many curious buyers to Tesla stores. In addition, Coney also said that in addition to Elon Musk, Tesla executives such as design director Franz von Holzhausen and vice president of automotive engineering Lars Moh Lars Moravy, is increasingly promoting Tesla products on behalf of the company.
“If you look at global electric vehicle sales, BYD and Tesla are still the main drivers of sales,” Coyne said. “Going forward, Tesla will continue to be well-positioned.”
