Tesla CEO Musk: Demand not a problem despite economic headwinds

Tesla CEO Elon Musk said the electric automaker is not facing demand problems despite economic headwinds, and the company expects to sell every vehicle it can produce in the current quarter from its factories in California, Texas, Germany and China.

“There’s been a lot of questions about demand in recent weeks,” Musk said on the third-quarter earnings call Wednesday. “I can’t emphasize enough we have excellent demand for Q4 and we expect to sell every car that we make for as far into the future as we can see.”

Tesla said it expects to grow production by 50 percent annually for the foreseeable future, but deliveries might fall below that number as the company faces transportation challenges as it grows beyond a million units a year.

The automaker is ramping production at its new factories in Austin, Texas and Berlin, Germany. Its original factory in Fremont, Calif. is running at a record pace and its Shanghai factory has undergone a recent expansion.

“The factories are running at full speed and we’re delivering every car we can make and keeping operating margins strong,” Musk said.

Tesla also said it remains on track to launch the highly anticipated Cybertruck pickup next year out of its Texas factory, which opened earlier this year. But Musk said he wasn’t going to give out details about the Cybertruck or other future products right now.

“Sorry folks, we can’t jump the gun on future product announcements,” Musk said.

Cybertruck reservation holders have expressed worry the pickup may be far more expensive than when Tesla previewed it in 2019. Tesla originally said the price would start around $40,000, but has since backed off on that number.

In financial results, Tesla reported lower than expected third quarter revenue, as the global EV leader delivered fewer vehicles than expected.

Tesla’s revenue for the third quarter was $21.45 billion, compared with analysts’ estimates of $21.96 billion, according to data from Refinitiv, Reuters said.

Tesla’s stock price has been under pressure since early October, when it reported global sales and production for the third quarter.

Tesla missed market expectations but still delivered a record 343,830 vehicles for a 42 percent increase over last year. In the U.S., the Automotive News Research & Data Center estimates a 47 percent sales increase for the quarter, to a record 114,000 vehicles.

Tesla’s stock market valuation is partially based on its plan to grow to millions of units annually, compared to last year’s sales of 936,172 vehicles. Musk has speculated Tesla could be selling 10 million to 20 million cars a year in the early part of the next decade.

Through the first nine months of 2022, Tesla’s sales growth ran at about 45 percent. The company said it’s still on track to hit a 50 percent production increase, putting it at about 1.4 million. But as Musk said Wednesday, deliveries may fall below that target.

One possible sign of easing demand, according to some analysts, is the 22,000-unit gap between production and deliveries in the third quarter. Tesla is usually able to deliver the vast majority of its production through aggressive end-of-quarter pushes.

Tesla said in a statement that all of the 365,923 third-quarter vehicles had been ordered by customers, but that it faced challenges securing enough transportation to deliver them.

In the U.S., Tesla is also facing its first signs of real competition in the EV market.

“Its market share in the U.S. electric vehicle market may come under threat as legacy manufacturers ramp up battery-only car production, while demand for [EV] propulsion technology could wane once early adopters are satisfied,” Bloomberg Intelligence said.