Home Technology Is Tesla Model S Demand Waning In U.S.?

Is Tesla Model S Demand Waning In U.S.?

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Tesla Motors Inc (NASDAQ:TSLA) is gradually increasing its production, and demand for the Model S appears to be thriving, but compared to deliveries, very few vehicles have been registered in the United States. The claim has been made in a report from Bloomberg BusinessWeek, which cites the scanning of public records by Hedges & Co, an Ohio-based market research firm.

Is Tesla selling more cars abroad?

The number of registrations in the first nine month for the United States dropped one-third to 9,331, claims the report. In the same period, the electronic car maker delivered 21,821 cars, which is an increase of 40% from last year. However, there are no details about the remaining 12,490 cars. There is the possibility that the EV manufacturer is selling more cars internationally.

The Palo Alto-based company runs 40 sales centers in Europe and started shipping cars to Japan in September and to China in the beginning of this year. Tesla sells its cars directly and produces in line with demand, which implies that the gap between delivery, sale and registration of any Model S should not be much. This concludes that around 60% of deliveries so far this year could have been delivered internationally.

However, the theory on international deliveries comes into question if we look at the latest update from Tesla earlier this month, which claims most of the deliveries in the third quarter have been made in North America. Also Tesla said that less than half of its vehicles next year will be shipped abroad, substantially fewer than the registration slump would suggest. Tesla asked analysts to go through the earnings report when asked about the drop in registrations, says Bloomberg BusinessWeek.

Is demand dropping?

In Washington, where the Model S has earned a high reputation and popularity since it was first launched, the number of new registrations has dropped. Similarly, registrations in California, where Tesla garnered the most number of sales, dropped 43% in the first nine months of the year. However, Indiana and Ohio are the states that are seeing a greater number of registrations even though the Model S has not been popular in those states. In the year, Georgia overtook Oregon, Connecticut and Colorado in terms of the number of Tesla Model S registrations.

If the theory of international deliveries does not hold true, then there are chances that buyers in the United States are gradually shifting away from the car and the deliveries are not translating into sales. This could mean trouble for the Elon Musk-led company.

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Sheeraz Raza

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