First, Model 3 sales rebounded in Q2, especially June. So much for the FUD (fear, uncertainty and doubt) spread by the anti-Tesla scream squad. No, there is no lack of demand for Model 3s. No, Tesla is not going to run out of cash. Here's the chart, with the Model 3's nearest non-Tesla competitors. Note this is US sales only. European sales are screaming along, thank you. In Q4 last year, sales were brought forward because the Federal tax credit was going to halve in Q1. It'll halve again in Q3, so there is some (smaller) element of pull-forward again. Expect Model 3 sales to fall in July, and the FUD to wind up several notches. But allowing for the pull-forwards caused by the tax refunds, the trend is clearly up. The introduction of leasing will offset any weakening caused by the ending of the tax credit. My prediction: Q4 2019 Model 3 US sales will be substantially above Q4 2018 sales.
The second big story is the plunge in the Chinese car market. Chinese total car registrations are down 16% year-on-year in May, on a smoothed basis, after being flat in H1 2018. EVs/PHEVs were still up 40% (smoothed) year-on-year in May, but that's down from 140% growth in December 2017, and the recent trend in the level of EV sales is clearly down, though not nearly as fast as the trend in all car sales. One quick aside from this is that Chinese growth and consumer confidence are much weaker than the massaged official data suggest.
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