Tag Archives: EV sales

What Chip Shortage? Tesla Posts Strong Q2 Sales Results

2021 Tesla Model Y blue
Tesla raised the price on its Model Y Long Range by $10,000 due, in part, to supplier issues.

As many automakers struggle to find semiconductor chips for their high tech vehicles, Tesla Inc. clearly has the issue taken care of as its second-quarter sales pass the 200,000-unit mark.

“In the second quarter, we produced and delivered over 200,000 vehicles,” the company said in a statement. “Our teams have done an outstanding job navigating through global supply chain and logistics challenges.”

For many car companies, the second quarter’s been difficult as it relates to keeping a steady supply of the chips. Tesla did have a short shutdown in February due to the problem, but since then has been churning out vehicles steadily, especially during the most recent quarter.

Tesla delivered more than 200,000 Model 3 and Model Ys during the quarter.

The company produced 204,081 Model 3 or Model Ys last quarter, a massive increased when compared with the year-ago period’s 75,946 vehicles. While pushing out its most popular vehicles — Model Y being the company’s biggest seller — it put the freshened 2021 Model S and Model X on the road during the quarter. It moved

Chip problems

The company did have a production hiccup in the first quarter of last year due to chip problems, but has since not had a problem. CEO Elon Musk said the semiconductor problem was causing some companies to behave impulsively.

“Our biggest challenge is supply chain, especially microcontroller chips. Never seen anything like it,” he tweeted June 2. “Fear of running out is causing every company to overorder — like the toilet paper shortage, but at epic scale. That said, it’s obv not a long-term issue.”

However, it doesn’t mean Tesla hasn’t been part of the sales rush. The Financial Times reported Tesla held discussions with chip makers to pay in advance, including offering deposits on high-volume orders. The company reportedly explored the idea of buying a plant to build its own chips.

Will Tesla Expand in China, Or Head the Export Route?

Image: Tesla

What does the future hold for Tesla in China? Expansion, or exports?

That’s the question being asked by an Automotive News story today.

Earlier this year, the outlook for Tesla in China looked rosy. But net orders for cars have fallen by nearly half this quarter amid concerns about the company’s vehicle safety, along with how it collects and stores data, and at least one report suggests that the company could end up exporting cars produced in China to Europe.

Not long ago, analysts were predicting expansion for Tesla in China. One analyst mentioned that in addition to planned plants in Texas and Berlin, Tesla could build another factory in China.

China’s Passenger Car Association will release May’s sales data next week. Sales dropped more than 25 percent from March to April, with more than half of the over 25,000 cars produced in China being exported.

Tesla stock did rise a bit in Friday’s early trading after a slight fall on Thursday, though the stock is down 35 percent from its peak in January.

For reference, China is the second-biggest market for Tesla, following the U.S. It builds Model 3 and Model Y vehicles in Shanghai.

Like the analysts, we too are curious about what happens. Tesla appears to be at a crossroads in China — if expansion was in the cards, it would obviously be great news for Elon Musk and company. Not just because growth is generally good, but because China is obviously a huge market. The country’s EV market is arguably more competitive than here, thanks to the presence of both several startups and more traditional automakers like BYD that build EVs, with roughly 20 makes in play, but Tesla shipped a half-million units there in 2020.

Obviously, the company would prefer to sell Chinese-made Teslas in China instead of shipping them to other markets. But the company has been dealing with a series of headaches for quite some time now. Between concerns about reliability here in the States and the ability of Teslas equipped with autonomous-driving software to perform those functions in a safe manner, and concerns about data, Tesla has enough headaches to make Musk want to take some time off to host a comedy show. Oh, wait.

All this would seem to confirm earlier reports that we highlighted regarding canceled expansion plans at the Shanghai plant.

At the moment, it sure looks like contraction, rather than expansion, is the name of Tesla’s China game.

[Image: Tesla]