The Strategist

Tesla Attains Record Sales in Q1 2015

04/08/2015 - 20:22

Tesla recorded jump in vehicle sales despite challenging roll-out in China.

Despite sales slowdown in Chinese market, Tesla set new sales record for its latest model S. In the first quarter of 2015, Tesla delivered substantial number of Model S electric cars. This was clearly evident through the soaring stock price of the company. Tesla’s deliveries steeply mounted 55% in the first quarter of 2015 as compared to the vehicle deliveries in first quarter 2014 and this huge growth highlighted the growing popularity of electric vehicles. The record sales surpassed the expectations by more than 500 cars.
Tesla’s launch of the new model was remarkable although the rollout of this new model got a bit delayed. The company announced an explosive deliveries of more than 10,000 vehicles in the first three months of this year. However, it should be noted that this only includes the amount of vehicles that reached the consumers which means that the actual sales figure is much higher. According to Autodata estimates, Tesla’s sales to the US market tumbled 24% during the period in comparison to the same period previous year.

The deceleration in China’s economic growth has raised signs of worry that the carmaker might miss its sales target. The company’s launch of its latest car in China was far below expectations. Moreover, the company announced 30% employee layoffs in China. It is said that the Chinese consumers were under the misconception that the charging of electric vehicles is challenging.
The remarkable sales growth is crucial for Tesla to accomplish its sales target of 500,000 vehicles per year by 2020 much higher than 31,655 unit sales previous year. Tesla is planning to roll-out a new sports car Model X in the latter half of the year. The debut of Model X will test Tesla’s capacity to make a jump from niche to the mainstream. The falling gas prices has tainted the outlook of electric vehicles in the US market. However, Tesla made efforts to offer lucrative deals in order to sustain demand in the US.

Tesla is witnessing a substantial rise in its expenses that are eroding away its profits. The company pumped up its marketing and advertising budget and added employees. It has also made huge investments for establishing supercharging stations across North America, Europe and even in Asia to attract buyers that are more worries about charging vehicles.
In order to achieve its ambitious sales target, the company will be required to establish a new battery plant with an estimated cost of $4 billion - $5 billion. According to Tesla’s Chief executive, Elon Musk, the company is expected to surpass the worldwide car sales of Volvo Car Corp. Meanwhile, Tesla will have to continue its investments in establishing a supercharger network across the globe. However, the company is also facing tough competition from its rivals and strict regulation demands.

With the introduction of different varieties of all-wheel drive, Tesla’s car sales in European market showed significant improvements. Moreover, the company made substantial modifications to its cars in China thereby refining its navigation system and adding many more changes.

Tags : Tesla