Tesla Reports Record Sales, Increased Production in Q2
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Tesla Inc. posted record sales in the second quarter as the Austin-based electric vehicle maker continued to increase production at its growing Gigafactory Texas.
The producer of EVs, solar panels and batteries sold 466,140 vehicles worldwide from April through June, nearly doubling the 254,695 it sold during the same period a year earlier. The vast majority were the company’s popular Model 3 sedans and Model Y sport utility vehicles.
It produced 460,211 of those models during the period, up 90% from 242,169 the same time last year, the company announced July 2. Global deliveries of those models jumped to 446,915, up 87% from last year.
The news comes about two months after Tesla said it was producing 5,000 Model Ys per week at its plant in Austin. At that rate, the plant would build about 260,000 per year — a pace that would put it on track to top the annual target of 250,000 that the company has promoted in quarterly reports.
Sales topped Wall Street expectations. Analysts were expecting deliveries of 445,000 for the quarter. The company’s shares rose 6.2% in premarket trading, and they were selling for nearly $280 at market close July 3, up 6.9% from the closing price June 30.
The second-quarter numbers bring Tesla to nearly 900,000 vehicles sold in the first half of this year.
CEO Elon Musk has predicted sales will grow about 50% per year in the near future. To reach that rate for the full year, the company would have to sell 1.97 million vehicles. Analysts expect Tesla to fall a little short, delivering 1.82 million vehicles through December.
Growing in Texas
Tesla has been producing the Model Y, its most popular vehicle, in Texas since 2021. The company initially struggled to meet production goals at its plant near Austin but has added staff both for that model and to kick off production of its long-awaited Cybertruck this summer.
Tesla CEO Elon Musk at the 2023 Viva Tech fair in Paris. (Nathan Laine/Bloomberg News)
Tesla reported a workforce of 12,277 in the Austin area at the end of 2022, up from 3,523 contingent and permanent employees in 2021, according to a recent filing in Travis County. It said more than half of its workers reside in Travis County and that the average full-time employee was paid at least $41,147 last year.
The company also disclosed that it had invested $5.81 billion in its 2,500-acre site by the end of 2022 and plans to spend $775 million on five construction projects totaling 1.5 million square feet of its land off Texas 45 and U.S. 130 near Austin-Bergstrom International Airport, according to filings with the Texas Department of Licensing and Regulation.
Among Tesla’s expansion projects, it has said it plans to open a new cathode production facility at the site this year. Cathodes are a key component for its new, larger 4680 line of batteries.
Last month, Tesla said it produced its “10 millionth 4680 cell” at the plant. The company says the cells provide more power to electric vehicles at a lower cost.
Ahead of the Cybertruck production, Tesla has expanded into South Texas, where it recently broke ground on a lithium refinery to produce enough material to build batteries for about 1 million electric vehicles per year.
Musk joined Gov. Greg Abbott in early May at the site of the $375 million plant under construction in Robstown, Texas, near Corpus Christi. Construction is set to be completed next year, and production would start in 2025. Once completed, Musk said the company’s refinery “would produce more battery-grade lithium than the rest of North American refinery capacity combined.” There are five similar plants operating in the U.S. and more being developed, but most of the world’s production is outside the country.
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Tesla has said production of its own lithium could help it sell 20 million vehicles by 2030. The company currently produces and sells four models: the S, X, 3 and Y models.
Cutting Prices
Just south of Texas, Musk has also confirmed the company plans to build a plant in northern Mexico to manufacture an electric vehicle that would sell for less than any of its other models. The Mexican factory will reportedly be twice the size of its factory in Austin.
Tesla’s rush to expand comes after its share price dropped nearly 70% last year following Musk’s $44 billion acquisition of Twitter.
Shares started to rebound as sales increased through price cuts and after Musk announced a new CEO at Twitter in early May. Shares jumped again when Ford and General Motors said owners of their electric vehicles would be able to charge their EVs at many of Tesla’s charging stations starting next year.
Tesla has cut prices several times on its four models. Larger price drops emerged in mid-June and the end of the recent quarter approached. The company trimmed prices on some Model 3s by more than $3,000. Model X price cuts topped $10,000, and the company threw in three years of free charging for the S and X. The Model S sedan saw cuts of about $7,500.
Prices were also reduced on Tesla’s top-selling Model Y, with cuts of as much as $1,570.
Sales were also boosted by a $7,500 U.S. government tax credit from the Inflation Reduction Act that was available on nearly all Tesla models during the second quarter.
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