Tesla CEO Elon Musk has suggested his firm could look to stop taking orders for certain models in an effort to combat lengthy, supply-related lead times.
Speaking at the Financial Times Future of the Car summit, Musk laid bare the drastic impact of ongoing parts supply constrictions on Tesla’s ability to produce cars to meet demand.
“I’m confident we will be able to sell all the cars we can make. Currently, the lead time for ordering a Tesla is ridiculously long,” he said. “Our problem is not demand, it is production.”
He added: “We will probably stop taking orders for anything beyond a certain period of time. Some of the timing is around a year away. The frustration is not being able to get customers a car – not: are they interested in buying a car?
“I think zero about lead generation and a lot about production and supply chain.”
Musk is one of a number of car company CEOs to express frustration about extended lead times in recent months, as the supply of critical components for car production continues to be throttled by a number of industry headwinds, including soaring material costs, a shortage of semiconductors and various issues arising from the war in Ukraine.
The issues come at a crucial time for Tesla as it strives to ramp up production at its new Shanghai and Berlin factories. Musk has previously said the firm would not launch any new products – citing the long-delayed Cybertruck, Roadster and an unnamed entry-level hatchback – before 2023, in line with this goal.
The firm recently hiked up prices across its line-up to account, noting that by the time many of today’s orders have been fulfilled, raw material costs will have increased significantly over today’s already-inflated costs. Despite that, it posted record sales figures and profits in the first quarter of 2022, delivering 68% more cars worldwide than in the same period last year, and the equivalent of £2.5bn in profit – a AUSD$952m increase.
This is not the first time Musk has suggested Tesla could sell more cars if it was able to ramp production up. “Even before there were supply chain issues,” he said, in reference to the effects of the supply chain crisis on the firm’s overall numbers for 2021.
Felix Page