Does Tesla Motors Have A 3000 Car Excess?

It’s probably generally agreed upon by most that Tesla Motors’ third quarter report was a tad disappointing. It was revealed that the Model X crossover has been delayed yet again, and that the automaker posted a loss of $75 million for the period.

But there’s more; according to Autoblog, Tesla Motors may be sitting on a 3000 car excess.

The Daily Kanban broke the news, citing a letter from Merrill Lynch to investors as the source for the 3000 car excess figure. If true, it may be evidence that CEO Elon Musk’s perpetually positive outlook is sometimes too good to be true.

Tesla Motors has referred to its Shenzhen, China store as one of its most profitable globally. But the Daily Kanban, Merrill Lynch, and others speculate that a large portion of the apparent increase in unsold units is due to difficulty breaking into that market. Beijing offers only a limited number of license plates to citizens per annum, in order to curb urban smog, but a separate, more attainable category of plates was created for electric cars. Yet despite this, only 30 percent of those awarded electric car plates in Beijing actually bought an electric car.

The 3000 car excess is equal to more than a third of the automaker’s Q3 sales. If not lackluster sales in China, the origin of the drop in demand becomes even more problematic. Musk constantly cites the company’s inability to keep up with demand, and there are still supposedly waiting lists to purchase a Model S sedan. So why the stockpile?

However, the news isn’t all bad; Tesla has expanded production to put out even more Model S units by the end of 2015, and with any luck, the Model X crossover will finally be offered by that time. But it’s certainly reasonable to be fearful of such upsetting news, for a car company already in a vulnerable, fledgling state.

Aaron Birch is an automotive enthusiast and writer/filmmaker from Detroit, MI. As a rule, he only buys cars older than himself.

No Comments yet

Leave a comment