Economics

Tesla’s Sales Numbers In Europe: A Massive Price To Pay?

Excerpted from a Whitney Tilson email to colleagues on the topic of Tesla’s sales numbers in europe – good, okay or bad?

In response to this Tesla Inc. (NASDAQ:TSLA) Model 3 top selling pure electric car in Western Europe, a friend wrote:

As for the Matthias Schmidt numbers for Tesla in Europe, they are of course accurate as far as January-May are concerned.  We know this because we have the official government registration data from essentially all European countries. So our numbers are the same, with the caveat that different analysts choose to include different countries in their definition of “Europe.” (Is Russia in or out, for example)

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Tesla's Sales Numbers In Europe Tesla's Sales Numbers In Europe tesla dashboard touchscreen
Ben_Kerckx / Pixabay

The remaining question for Q2 now is of course the month of June, which Matthias doesn’t comment upon directly other than to say that the June month number won’t match the March month number of 17,408 units (all of Tesla in all of Europe).  I agree. My model has Tesla approximately 2,000 units below that number.

Still, for Q2 as a whole, that means that Tesla’s sales numbers in Europe will be little over 1,000 units above its total Q1 number.  This is simply because Tesla’s April month was dramatically better than its January month. May vs February were approximately similar.

That’s Europe only.  Tesla’s major swing factors are the U.S., Canada and China.  We have relatively poor visibility into those geographies right now.  There is plenty of both upside and downside to the estimates, coming from those places.  Europe is not going to surprise by anything meaningful, given the good daily and monthly data we have from there.

My overall global Tesla Q2 estimate is around 86,000.  I think I could be off by 4,000 on the downside and 6,000 on the upside.  Looking into Q3, I think Tesla will have to cut its prices more in order to maintain these unit deliveries.  In the end, I think Tesla will deliver over 80,000 cars globally in Q3, but that the price it will pay in order to do so, consists of price cuts and therefore margin cuts, severely hurting the bottom line.

Tesla has proven that whenever possible, it will sacrifice pricing and margins, in order to try to meet the unit sales expectations.  Therefore, the bears may be wrong on the expectations for units sold -- but the bears will likely be right on the margins, as Tesla’s losses will likely be worse than the market consensus.

Here are Tesla’s sales numbers in Europe for Q1:

Europe January February March Q1 2019
Model 3 66 3643 15890 19599
Model S 354 420 746 1520
Model X 370 319 759 1448
TOTAL 790 4382 17395 22567

 

And here are Tesla’s sales numbers in Europe for Q2 (June is my estimate):

Europe April May June Q2 2019
Model 3 3730 2922 13140 19792
Model S 446 513 1120 2079
Model X 328 664 955 1947
TOTAL 4504 4099 15215 23818

 

2) And in response to this Model 3 dominating every EV in Norway this year, especially in June, a friend wrote:

No, not "especially" in June.

In March, Tesla registered 5,315 Model 3 units in Norway.

Thus far in June, Tesla registered 2,102 Model 3 units in Norway.

With 8 days left in Norway, and given the numbers over the last few days, it seems like Tesla is on track for 3,300 units in Norway in June.  That would represent a decline of approximately 37% compared to March.

Looking at all of Europe for the Model 3, for Q2 as a whole, my model has the Model 3 up 3% over Q1 -- 20,212 units compared to 19,599:

Model 3 January February March Q1 2019 Model 3 April May June Q2 2019
Germany 2 959 2224 3185 Germany 514 317 1400 2231
Norway 17 791 5315 6123 Norway 720 705 3300 4725
Netherlands 40 472 2195 2707 Netherlands 467 419 2400 3286
France 0 401 1153 1554 France 251 321 1400 1972
Switzerland 0 277 1168 1445 Switzerland 486 144 600 1230
Belgium 1 197 635 833 Belgium 111 138 500 749
Austria 0 136 703 839 Austria 142 127 500 769
Italy 0 80 232 312 Italy 149 125 500 774
Finland 1 34 144 179 Finland 87 42 200 329
Spain 3 197 396 596 Spain 51 122 300 473
Portugal 0 0 345 345 Portugal 98 84 200 382
Luxembourg 0 20 69 89 Luxembourg 40 34 60 134
Sweden 0 0 1005 1005 Sweden 446 198 800 1444
Denmark 2 79 306 387 Denmark 168 146 500 814
UK 0 0 0 0 UK 0 0 800 800
Ireland 0 0 0 0 Ireland 0 0 100 100
EUROPE 66 3643 15890 19599 EUROPE 3730 2922 13560 20212
USA 6500 5750 10175 22425 USA 10050 13950 16000 40000
Canada 710 875 939 2524 Canada 400 400 3000 3800
N AMERICA 7210 6625 11114 24949 N AMERICA 10450 14350 19000 43800
Australia 0 0 0 0 Australia 0 0 400 400
China 18 215 6134 6367 China 2324 1903 3000 7227
ASIA 18 215 6134 6367 ASIA 2324 1903 3400 7627
TOTAL 7294 10483 33138 50915 TOTAL 16504 19175 35960 71639

 

And then if you look at *Europe" as a whole, these are the numbers:

Europe January February March Q1 2019 Europe April May June Q2 2019
Model 3 66 3643 15890 19599 Model 3 3730 2922 13560 20212
Model S 354 420 746 1520 Model S 446 513 1120 2079
Model X 370 319 759 1448 Model X 328 664 955 1947
TOTAL 790 4382 17395 22567 TOTAL 4504 4099 15635 24238

 

In other words, once you include the Model X and S, it's an increase of 7% -- 24,238 over 22,567.

What do you think about Tesla's sales numbers in Europe? Let us know in the comments section