I Love How Tesla Wreaks Havoc among Automakers with Massive Price Cuts, Huge Sales Growth, Even Huger Production Growth, and Overcapacity, by Wolf Richter

Tesla is transforming the automobile industry. From Wolf Richter at wolfstreet.com:

Shareholders hate it. It’s bitter medicine for the industry that pushed upscale and jacked up prices so average Americans can no longer buy new vehicles.

What Tesla has been doing is fascinating, and it’s wreaking havoc among the legacy automakers. Tesla shareholders hate it, and shares have sold off, though they are still ridiculously overpriced. And other automakers’ shares have sold off too.

Tesla’s deliveries continue to surge. In Q1, global deliveries jumped by 36% year-over-year, which is a huge increase. Its overall market share has exploded. In the US, its market share reached nearly 4%, having tripled since 2020. This came out of the hide of other automakers. In Q1, it delivered a record 422,875 vehicles globally.

But it has ramped up production and production capacity even faster. Production in Q1 jumped by 44% to 440,808 vehicles. It has been ramping up production and investing in production capacity so relentlessly that for two quarters in a row it produced significantly more vehicles than it sold.

Over those two quarters combined, it built 880,509 vehicles, and delivered 828,153 vehicles. In other words, sales have soared, but production and production capacity has out-soared sales growth.

And now it needs to sell those 50,000 or so vehicles it hasn’t sold, on top of the vehicles it’s cranking out in Q2, and instead of cutting production, it’s cutting prices to boost sales.

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