Tesla reached its target of producing 500,000+ vehicles in 2020, although it very narrowly missed its target of delivering that number of vehicles.
Target
Electronic vehicle company Tesla’s own target set five years ago under CEO Elon Musk, of producing half a million vehicles in a year was reached in 2020 when deliveries in the fourth quarter of 180,570 pushed it over the line to the tune of 509,737 electric vehicles. As for its (guidance) target of delivering 500,000 electric vehicles in 2020, Tesla only marginally missed this milestone as it recorded delivering 499,550 electric vehicles. Near miss or not, this still represents a huge 36 per cent increase in vehicle deliveries on the previous year.
New Models Helped
The Tesla sales boost in 2020 was helped by the launch of the Model Y, the mid-sized SUV, and a general rise in demand for the company’s more affordable and newer models e.g., the Model 3 and Model Y vehicles of which it delivered 161,650 in the fourth quarter.
The increase in model Y production was enabled by Tesla operating a new car plant in Shanghai, and the addition of new battery cell suppliers (as well as its existing partner Panasonic) contributed to growth by allowing more high voltage battery packs to be added to Tesla’s electric cars.
More Factories
Future growth of Tesla car sales looks likely to be boosted by the company’s building of more new factories in 2021 in Austin, Texas and Brandenburg, Germany, although it is understood that these new factories could take 12 to 24 months to hit full capacity (slower than the Shanghai factory).
Pandemic Hit Car Industry
From March 2020 the lockdown measures, a mass loss of income and jobs, the closure of car plants and showrooms worldwide, and a huge dent in ‘consumer confidence’ hit the car industry hard and there was an inevitable downturn in the sales and registrations of new cars in 2020. Also, The Society for Motor Manufacturers and Traders (SMMT) figures showed that only 4,321 cars were registered in the UK in April 2020 during the national lockdown. This was the lowest monthly level since 1946 and marked a 97 per cent plunge in sales from the same month in 2019 and large numbers of unsold cars were stored outside waiting for an upturn in the market; for example, a vast quantity of cars estimated to be worth £35 million were stored outdoors at Heyford airbase close to Bicester, in Oxfordshire.
At the end of the first national lockdown, however, ‘pent up demand’ led to a boost in car sales, and the cleaner air experienced globally during in the lockdown helped to highlight the benefits of electric vehicles. A change in policy by the UK government in November also led to the commitment that the sale of new petrol and diesel cars will end by 2030. Looking ahead, Bloomberg NEF has forecasted that electric vehicle models will reach 31 per cent of the overall car fleet by 2040, accounting for 58 per cent of new passenger car sales and that combustion engine car sales will continue to gradually decline from their peak in 2017.
Competition For Tesla
Although Tesla’s latest figures are promising, the company faces some stiff competition going forwards in both the luxury and lower-priced car segments for the big car companies, all of whom are now committed to electric models.
What Does This Mean For Your Business?
These figures, the promise of new factories and battery technology, new models, hope in the marketplace for 2021 thanks to vaccines, and commitments by governments to boost the sales of electric vehicles are all good news for Tesla. Competition in the electric vehicles market is now set to go up a notch and Tesla are clearly positioning themselves to take on the big car manufacturers in different segments. The change to electric vehicles will also create challenges and opportunities for businesses involved in the supply chain and charging of electric vehicles as well as sales as customers commit to electric vehicles going forward. In the short term in many countries, however, the COVID-19 pandemic is limiting mobility and still having a serious negative influence on car sales.