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Tesla Delivers 386,810 Units in Q1 2024, and Its Days of Finished Goods Inventory Metric Explodes Despite Trying To Pull Forward the Demand

2024/04/02
Tesla Delivers 386,810 Units in Q1 2024, and Its Days of Finished Goods Inventory Metric Explodes Despite Trying To Pull Forward the Demand

This is not intended as investment advice. The author does not hold a position in any of the stocks mentioned.

Despite its efforts to increase demand and lock in orders in the first quarter, Tesla (NASDAQ: TSLA) still faced significant challenges and narrowly avoided a year-over-year decline in deliveries. The company’s struggles were evident in its recent price hikes and efforts to pull demand from future quarters. Despite these difficulties, Tesla managed to avoid recording a negative quarter in terms of delivery growth.

Despite throwing everything, including the proverbial kitchen sink, at its persistent anemic demand problem, Tesla continues to face tough competition from BYD in China. This has resulted in a decrease in demand momentum. Additionally, the company is also dealing with stagnant sales in Europe due to a recent arson incident at Giga Berlin that caused production to halt for several days. The repairs are estimated to cost around $100 million euros. Meanwhile, in the US, Tesla’s production has been affected by ongoing upgrades to its Fremont factory, which are necessary for increasing production of the Model 3 Highland.

As previously detailed in a separate article, Tesla made efforts to enhance its quarterly sales projections. To address surplus inventory at Giga Shanghai, the electric vehicle company provided incentives totaling $4,807 to purchasers of the Model 3 sedan or the Model Y SUV.

Despite raising the price of the Model Y LR and RWD variants by $1,000 in the US on March 1st to ease the pressure on its margins, Tesla offset this decision by offering 5,000 free supercharging miles to US customers who purchased a new Tesla vehicle by March 31st, 2024. This strategy aimed to accelerate demand in the upcoming quarters. Then, on March 16th, Tesla hinted at a possible $1,000 price increase for the Model Y in the US, which was confirmed on April 1st.

In March, Tesla increased the cost of the Model Y by 2,000 Euros in several important European nations, as reported by a Twitter user. Despite this, the company offered a discount of up to 10 percent on the newly released Model 3 Highland in France, according to TeslaInfoCom on Twitter.

Tesla Exceeds Expectations with 386,810 Deliveries in Q1 2024

The main point to consider is that Troy Teslike has consistently made accurate estimates of Tesla’s quarterly production numbers in recent years. However, this time, the Tesla enthusiast predicted that the EV giant would only deliver 409,000 units, which falls below Tesla’s IR-compiled consensus estimate of 431,125 units.

Tesla Deliveries

In its recent disclosure, Tesla announced that it had delivered 386,810 units in Q1 2024, with a production level of 433,371 units. This marks the first time since Q2 2020, the height of the pandemic, that Tesla has experienced a year-on-year decrease in quarterly deliveries.

The company’s Days of Finished Goods Inventory metric, also known as the Days of Supply metric, has significantly increased in Q1 2024 as compared to Q4 2023. In Q4 2023, Tesla had an inventory level of 96,901 units and an average daily delivery rate of 6,460.09 vehicles, resulting in a Days of FG Inventory of 15.0 (based on 75 working days in a quarter). However, in Q1 2024, the company’s inventory level has risen to 143,462 units, while the average daily delivery rate has decreased to 5,157.47, leading to a Days of FG Inventory of 27.82. This indicates a material increase

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