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Tesla reports record sales in 2Q boosted by price cuts, EV tax credits

Tesla delivers record sales in 2Q boosted by price cuts, EV tax credits
Tesla delivered more units of lesser expensive Model 3 and Model Y cars, compared with Model S and Model X units.


Tesla, an American electric vehicle giant led by billionaire Elon Musk, has reported record deliveries in the second quarter of 2023, with an impressive 83% on-year surge. The sales numbers also topped Wall Street’s delivery estimates and were aided by a combination of aggressive price cuts and the implementation of federal electric vehicle tax credits under the Biden administration.


The company said in a release yesterday that it reported a staggering global production of 479,700 units. Tesla delivered record 466,140 vehicles worldwide in the April-June quarter, up 10% from around 423,000 vehicle sales in the previous quarter and nearly doubling the 254,695 vehicles delivered during the same period last year.


Tesla’s delivery numbers include 446,915 units of lesser expensive Model 3 and Model Y cars, while the company sold 19,225 units of Model S and Model X units. The Austin-headquartered company says that 5% and 8% of its sales of Model 3/Y and Model S/X were respectively subject to lease accounting. Meanwhile, it is noteworthy that Tesla does not disclose official sales numbers and hence delivery figures are seen as a reflection of its actual sales.


According to a TechCrunch report, that cited data from the China Passenger Car Association (CPCA), approximately half of Tesla’s deliveries in April-June likely originated from its gigafactory in Shanghai, China. Tesla delivered 75,842 China-made EVs in April and 77,695 in May, the report noted; adding that CPCA has yet to release the sales figures for June.


The EV maker’s remarkable delivery performance during 2Q can be attributed to its strategy of slashing prices earlier this year to address the issue of affordability. The most affordable Model 3 now starts at just $32,740 after factoring in the $7,500 federal tax credit. In the United States, Tesla’s Model 3 vehicles became eligible for the full $7,500 federal EV tax credit during the second quarter. The strategic price cuts implemented by the company in the United States, China, and other countries have contributed to increased sales, but investors remain cautious about the impact on profit margins. Investors and analysts eagerly anticipate Tesla’s second-quarter earnings report, scheduled for release on July 19.


Meanwhile, the market cheered Tesla’s exceptional performance with the company’s shares surging by 6% in early trading. The company’s shares have surged more than double in value during the first half of this year, still, its current market cap is below its all-time high of over $1 trillion but significantly surpassing that of any other car manufacturer.


The recent surge in the automaker’s stock price can also be attributed, in part, to deals struck with major companies such as Ford, General Motors, Volvo, and Amazon-backed Rivian, who have adopted its battery charging standard. Just last week, Electrify America, Volkswagen’s EV charging network and infrastructure provider, also said to adopt Tesla’s North American Charging Standard (NACS). In November last year, the Musk-led automaker shared an EV connector design and invited charging network operators and automobile companies to put the Tesla charging connector and charge port NACS on their equipment and vehicles. These partnerships have opened up a new revenue stream for the American automobile company by granting access to its extensive network of chargers.

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