Production at the Tesla manufacturing plant in Shanghai saw a significant rebound in August, a crucial development for the company to meet its production targets. According to reports from the Chinese Passenger Car Association, Tesla shipped 84,159 units from its Shanghai plant in August. This marked an increase from 64,285 units in July and 76,695 units in August 2022.
The slight dip in production observed in July was attributed to necessary retooling at the plant. It is common for automakers to undertake facility upgrades and allow workers to take vacations during the summer break. Tesla CEO Elon Musk highlighted these upgrades during the company’s second-quarter earnings conference call in July.
It is important to note that the figures reported for August represent the total wholesale shipments, which includes exports to other markets. Domestic sales figures are typically available a few days after the wholesale numbers.
The robust wholesale numbers for August not only reflect increased production but also point to strong customer demand. Unlike traditional automakers that rely on dealer networks, Tesla predominantly sells vehicles directly to customers. This ensures that most Tesla vehicles sold are specifically ordered by real customers.
In 2023, the number of vehicles produced by Tesla in China has already reached approximately 625,000, compared to around 400,000 during the same period in 2022. It is worth mentioning that plant capacity has also improved during this time. However, COVID-19 lockdowns experienced in 2022 constrained production across the entire Chinese auto industry.
The Tesla Shanghai plant, which began production at the end of 2019, achieved its fourth-highest monthly output with 100,291 units in November 2022. This figure showcases the substantial growth of Tesla’s Shanghai plant, although it’s important to note that typical auto factories produce around 500,000 vehicles per year.
With production rebounding and continued growth expected, Tesla’s Shanghai plant is setting impressive records, solidifying the company’s position in the Chinese market.
Tesla Stock Reacts Modestly to Wholesale Numbers
Tesla stock showed a slight decline of 0.2% in premarket trading when the wholesale numbers were released. This decrease comes as no surprise, considering the company’s plan to increase production following a break in July. As a result, sequential growth in quarterly deliveries is expected to be limited. Wall Street predicts that Tesla will deliver approximately 470,000 units in the third quarter, which is not significantly different from the 467,000 units achieved in the second quarter.
Analysts’ Projections for 2023 Deliveries
For the entirety of 2023, industry analysts are projecting Tesla to deliver around 1.8 million vehicles, with an estimated 500,000 deliveries occurring in the fourth quarter. In comparison, Tesla delivered about 1.3 million cars in 2022.
Stock Price Falls Amid Pricing News
Shares experienced a 5.1% drop on Friday as news about pricing circulated. Although Tesla introduced its upgraded Model 3 Sedan in China and Europe, and subsequently increased its price, the stock price still decreased. Investors may have been disappointed that the new Model 3 did not include more new features, considering the high anticipation leading up to its release. Furthermore, some individuals who had purchased shares in anticipation of the Model 3 news may have decided to sell their holdings after the announcement. It is worth noting that Tesla’s stock had seen an increase of almost 20% in the two weeks prior to the launch.
Impact of Full Self Driving Price Reduction
Another factor influencing Tesla’s stock price on Friday was the company’s decision to decrease the price of its Full Self Driving driver-assistance software from $15,000 to $12,000. Additionally, prices for Tesla’s lower-volume Models S and X were also reduced.
Overall Performance of Tesla Stock
As of Tuesday’s trading, Tesla stock had seen an impressive increase of approximately 99% year-to-date.
