Tesla’s (TSLA) sales in California, the automaker’s biggest market in the US, were unsurprisingly nearly halved during the second quarter based on registration data.
Several media outlets are reporting on Cross-Sell releasing registration data for Tesla vehicles in California.
The firm claims that Tesla registrations fell 48% in Q2 in the important EV market (via Reuters):
“The report released on Wednesday showed registrations in California, a bellwether market for the electric-car maker, plummeted almost 48% from a year earlier to 9,774 vehicles in the three months ended June 2020.
Model 3 registrations in the state, which accounted for more than half of the total registrations, fell 63.6% to 5,951 vehicles.”
Earlier this month, Tesla reported total deliveries of just over 90,000 cars globally in Q2 – down about 5% over last year while the rest of the auto market was down more than 30%.
The automaker’s Fremont factory, which produces the majority of its vehicles, was shut down for over a month during the quarter.
Tesla’s stock fell more than 4% in premarket trading after the report came out.
This is catnip for TSLA shorts, but I don’t get it.
It is always somewhat dubious to look at Tesla’s sale fluctuations in specific markets over a shorter period of time due to the company’s cyclical production.
Tesla makes cars at Fremont factory in batches for specific markets and it often results in temporary supply constraints in some markets regardless of the demand.
Now if you add into the mix a month-long factory shutdown affecting this production cycle, you are creating a lot of those temporary supply constraints.
With that said, it’s also obvious that the pandemic is affecting demand, but it would be difficult to know to what degree with deliveries being affected not only by demand but also by the lack of supply.
Once Tesla has two factories in the US, one in Europe, and one in China, and inventory is sent to those markets at a more steady pace, then it might be useful to look at sharp drops in registrations in some markets, but for now, I’d take it with a grain of salt.
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