Does Tesla produce more cars than it sells?

Does Tesla produce too many cars today? The question arises, as competition is increasingly tough in China where national preference prevails over everything.

The proliferation of brands and the increase in supply from Chinese manufacturers could well pose a problem for Tesla. The American brand, which has its own factory in Shanghai (one of the first which did not need a joint venture to be built), would consider reducing its production there. In any case, this is what Bloomberg and Reuters jointly claim, even if Tesla has already reacted by saying that these claims were unfounded.. However, Tesla is leaving behind a few clues that could suggest that activity is decreasing.

Discounts at Tesla?

The reduction in production would be rather drastic, around 20% in December compared to December levels. But wasn’t that predictable? The current context is no longer that of before Covid for Tesla, when the American brand had free rein, and a very favorable global economic situation. Now, inflation, China’s economic slowdown with its “zero Covid” policy and the Chinese offensive in electric cars are changing the game.

And then there are these stories of discounts offered in China, going up to more than 800 € in December on Model Y. Admittedly, it’s not much, but Tesla had never applied discounts so far. Especially since in the land of Uncle Sam, the discounts are more generous, going up to 3750 dollars. But only on a firm order for the month of December… knowing that in January the famous bonus of 7500 dollars from the American State will come into play. Scholarly calculation of Tesla which plays a nice blow, or admission of weakness? Hard to say. And then Tesla now plays advertising on Chinese television, chose rare for the American brand.

Some analysts, however, contrast with Bloomberg’s analysis by explaining that it is mainly “macroeconomic winds” that are pushing Tesla to reduce the pace. Still, the BYD threat, in particular, is becoming more and more pressing. The Chinese giant has also formalized its 100% electric shift, and sold more electric vehicles than Tesla in November in China.

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Published on 07/12/2022 Updated 07/12/2022

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