2023 is different for Tesla because of its huge price cuts, which are actually a part of its strategy. According to InsideEVs, the EV automated is selling a lot of cars in the first quarter of this year, which is different from what the company has done in the first quarter for years now.
Almost every year, the EV automaker has a limited number of deliveries in the first quarter of the year compared to the following quarters. This is common among automakers, especially with the US federal tax credit and consumers getting electric vehicles at the end of the year to get their tax credit a lot sooner.
Straying From End-of-Quarter and End-of-Year Deliveries
Elon Musk has said several times in the past that Tesla should get away from end-of-quarter and end-of-year delivery waves. According to the Tesla CEO, when the car arrives in the final week pod December or early January should not really matter as long as the vehicle was produced and is about to be delivered.
Nevertheless, Tesla is having its strongest first quarter ever, and if they were able to set records with their deliveries, a few challenges along the way might not matter so much. It is also beneficial that many of its factories will be upgraded, and the newest factories will speed up production.
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The Goal
Instead of promising 50 percent sales growth from 2022 to 2023, Tesla will produce 1.8 million vehicles this year as a whole. However, Musk is not ruling out the delivery of 2 million vehicles.
Musk also said that if this year goes smoothly without major supply chain constraints or big catastrophes, they may be able to produce two million EVs this year, as reported by Reuters.
The company is, indeed, boosting its cost reduction roadmap towards higher production rates. With the dropping prices, this will see reduced margins. And so far, the EV maker has some of the best margins in the industry today.
Tesla is also focusing on increasing automation levels within its factories which could potentially lead to greater efficiency gains over time, allowing it to produce even higher numbers with less effort than before. Moreover, they are investing heavily in research & development so that they can come up with new technologies that make production easier and faster without compromising quality or safety standards set by industry regulations.
The company's commitment to achieving these goals shows how confident Musk is about meeting his targets despite any unforeseen challenges along the way, something that should give investors some peace of mind when considering if Tesla stock is worth buying right now or not.
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