“I can’t emphasize enough, we have excellent demand for Q4 and we expect to sell every car that we make as far into the future as we can see,” said Tesla CEO Elon Musk in his opening remarks during the company’s Q3 2022 Earnings Call yesterday.
Lately, Elon Musk and other top executives of Tesla, Inc. have been repeatedly asked the question — has the demand for the electric automaker’s cars dropped? Musk addressed this concern among other production updates he shared during the call (listen to the complete audio below).
Analysts and critics started questioning the demand for Tesla vehicles when the automaker released its Q3 2022 production and delivery numbers earlier this month. This was a rare occasion when Tesla produced more cars than it delivered. The main reason behind this has been transportation challenges, not a demand problem.
Tesla is all geared up to clear the backlog of vehicles carried over from Q3 and pushing for another record production and deliveries quarter in Q4 2022. The US-based EV maker gained an installed capacity of producing 1.9 million vehicles annually across 4 of its factories (2 in the USA, 1 in China, and 1 in Europe).
As of Q3 2022, Tesla’s Fremont factory has an annual production capacity of producing 100K Model S/X and 550K Model 3 and Model Y cars. That’s a total of 650,000 electric cars annually.
Giga Shanghai only produces Model 3 and Model Y cars, and it has a capacity of manufacturing more than 750K cars per year. Giga Berlin and Giga Texas each have a capacity of building north of 250K cars a year (currently only Tesla Model Y electric SUVs).
In Q3, each of our vehicle factories produced a record number of vehicles. While the availability of components posed less of an issue in the quarter, vehicle transportation capacity during peak delivery periods became increasingly challenging. We are gradually shifting towards a more even global mix of both production and deliveries.Tesla (TSLA) Q3 2022 Earnings Update (PDF below).
“So, the factories are running at full speed and we’re delivering every car we make and keeping operating margins strong,” Musk iterated that Tesla has no demand problem and it’s selling all the cars it can produce.
Elon Musk thinks that there is a vast amount of room in the market for electric vehicles, especially Teslas. There are around 2 billion cars and trucks on the road globally. And Tesla has only produced about 3.5 million EVs as of Q3 2022, so it’s not even 1% of the global feet.
Featured image by Esther Kokklemans / Twitter (posted with permission).
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