Are you in the market for a new Tesla? You might need to wait a bit longer
With the exception of the top-tier versions of the Model 3 sedan and Model Y SUV, delivery estimates on Tesla's website have been pushed back to the end of this year or potentially into the next.
The pricier Model S and Model X will become available in January or February. The high-end "Performance" version of the Model 3 can be delivered within four to six weeks, while the Model X version takes five to six weeks. You'll have to wait until November or January for the less pricey models, however.
The reason for the delay? Part shortages have led to temporary factory closures worldwide.
Dan Ives, a technology analyst at Wedbush Securities and an optimistic Tesla stock analyst, said, "The chip shortage isn't as big of a problem as Tesla bulls believe. Hopefully, it will be mitigated." Delays were to be expected in the last week's shipments, he added.
Tesla did not respond to questions about extended delivery estimates. In late July, CEO Elon Musk warned investors about supply problems with computer chips and other components, saying, "The chip supply is essentially the dominant factor for our production. It's hard to predict how long this will last because... it largely lies outside our control. It looks like things are improving, but it's hard to predict."
Regarding other components, Musk warned, "For the rest of the year, our growth rate will be determined by the slowest part of our supply chain."
Since a 743% price increase in 2020, Tesla stock has had a tough 2021 with problems. Ives said, "This new delivery forecast will likely weigh further on the stock because investors are worried that the company won't meet market expectations of 900,000 deliveries this year. Tesla expects to deliver 500,000 cars in 2020, a nearly 50% increase."
"Talking about future projects is one thing," said Ives. "But investors focus on deliveries and the growing competition in the electric vehicle market." This is currently the main concern for the stock.
These delivery estimates only apply to sales in the U.S., not to sales in Europe or Asia, which come from the Shanghai factory.
In the first quarter of the year, Tesla suspended production of the Model S and Model X due to attempts to produce more affordable, better-selling models. This may happen again. These delivery estimates suggest that Tesla may only produce short-term profitable versions of these more affordable models.
Tesla did not respond to a request for comment about extended delivery times.
The issue of part production delays does not just affect Tesla. Toyota, the world's largest automaker (TM), announced this Thursday that it would cut production at its North American plants by 60% in September and by approximately 40% at its Japanese plants.
Volkswagen (VLKAF) is considering production cuts. GM, Ford, and Stellantis have all announced temporary plant closures due to parts shortages resulting from a surge in COVID-19 cases, particularly in Southeast Asia, where many suppliers were forced to curtail or halt production.
Enrichment Data:
The delays in Tesla car deliveries are primarily due to a series of interconnected factors causing parts shortages and temporary factory closures globally:
- Supply Chain Disruptions:
- Semiconductor Shortages: Like many other automakers, Tesla has suffered from significant challenges due to semiconductor shortages. These critical components are indispensable for modern vehicles, and their scarcity has led to production delays.
- Raw Material Delays:
- Delays in raw material supply have also impacted Tesla's production capabilities. Transportation issues, logistical problems, or manufacturing bottlenecks can result in material delays.
- Tariffs and Trade Issues:
- The implementation of tariffs, such as the Trump tariffs, has complicated supply chains, as Tesla must source components from various countries, including Canada and China, subject to these tariffs.
- Factory Closures and Production Issues:
- Temporary factory closures due to component shortages or logistical issues have further contributed to delays. For instance, Tesla's production in Berlin has been disrupted by delays in component delivery due to container ships avoiding the Suez Canal.
- Global Production Challenges:
- The global automotive industry is experiencing rapid changes, marked by geopolitical risks, wage inflation, labor scarcity, and dynamic regulatory environments. These factors can lead to production disruptions and delays, impacting Tesla's ability to meet delivery goals.
- Inventory Management Issues:
- Automakers such as Stellantis have faced inventory management issues, resulting in temporary production halts to align production with sales and reduce high inventory levels. This strategy reflects the ongoing turbulence in the EV transition. Slower-than-expected demand and strategic debates over flexible platforms are common in this period.
