Tesla to smooth production and model delivery

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Tesla CEO Elon Musk admitted lack of boats, trains and car carriers prompts a rethink to car delivery methods.

Tesla has been forced to abandon its practise of batch-delivering cars, which could put it on top of the sales charts one month, then barely registering cars the next.

Tesla CEO Elon Musk told investors on the recent earnings call that the reason was because it couldn’t find enough transport between China, where the bulk of European-market Teslas are made, and Europe.

“There weren’t enough boats, there weren’t enough trains, there weren’t enough car-carriers to actually support the wave, because it got too big,” he explained.

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Tesla preferred to “batch-build” cars for specific regions at its plants and ship them all in one go, usually in the final month of the quarter. The American brand has never given a satisfactory reason for this, although it might help with factory tooling to produce regional variants in one go. It also gave the brand favourable headlines when the cars topped monthly charts, giving an unbalanced view of the overall demand.

The result can been seen in Tesla’s Australian registrations. For example, the Tesla Model Y SUV was Australia’s third best-selling car behind the Toyota HiLux and Ford Ranger in September, with 4359 registrations, according to Vfacts data. That is almost double August sales, and across all four months leading to August, it recorded a total of 240 cars delivered.

Now Tesla is “smoothing” production through each quarter to reduce the pressure on shipping.

“We expect this to simplify our operations, reduce costs and improve the experience of our customers,” said chief financial officer Zachary Kirkhorn.

One reason for the loss of transport capacity might be the increased volume of imported cars from China to Europe, EV analyst Matthias Schmidt said.

Between January to September, 127,850 cars from Chinese makers were registered across Western Europe, according to Schmidt’s data. The figure doesn’t include Chinese exports from western brands such as the Dacia Spring and the BMW iX3.

Tesla might be able to soon supplant production from its Shanghai plant with the Model Y made by its Berlin plant, which is slowly coming on stream after a number of setbacks. Musk said the German site achieved the milestone of making 2000 cars in a week and is “ramping rapidly”.

Tesla also highlighted new colours, such as a cherry red, after initially just producing just black and white models.

Nick Gibbs

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