2019July EV sales lower than July 2018 in USA

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David Green

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Interesting that the entire EV market in the USA suffered a rare down month YOY, what happened to cause a 10% + drop-off in sales?
 
David Green said:
Interesting that the entire EV market in the USA suffered a rare down month YOY, what happened to cause a 10% + drop-off in sales?
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Tesla:
  • Every quarter, Tesla has a pattern of: first month; low, second month, middle, and; third month highest. July was the first month of Q3 2019 so it would be a low production month. My speculation is Tesla uses the last month of a quarter as a maximum effort, production benchmark. Using the lessons learned, Tesla changes the assembly line processes for the subsequent production and cost improvements in the first month of each quarter. The middle month of a quarter transitions to between the other two.
  • Tesla sales in July were: 51.0% Model 3; 4.6% Model X, and; 3.7% Model S. This is 59.3% of the plug-in market so their production pattern dominates the market.
Bob Wilson
 
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Yeah I saw Tesla sales were much lower in July 2019 when compared to July 2018. Did Tesla consider July 2018 not the first month of the Quarter 3?

Free Supercharging is back again... Tesla is desperate to re-kindle sales of S and X...
 
Autoline daily reported on Friday that July retail sales were down 5% in July. The Fed voted to reduce interest rates. PBS reported that the hours worked per week is down.

Pure speculation, is a recession starting?

Bob Wilson
 
bwilson4web said:
Autoline daily reported on Friday that July retail sales were down 5% in July. The Fed voted to reduce interest rates. PBS reported that the hours worked per week is down.

Pure speculation, is a recession starting?

Bob Wilson
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Yes, I think we are at the start of a recession... Watch what happens to Tesla... Companies that cannot make money in a booming economy die when things get tough. Reading news out of Japan, Tesla has been beating on Panasonic, and Panasonic made some price concessions, but Tesla agreed to pay more when they are profitable... Hmm, So Tesla wants to fake a profit... But then let by far their biggest supplier raise prices? haha!
 
to give another spin to the sales numbers:

It looks as if TESLA alone is not enough to carry the market. It is about time that other manufacturers show up with cars that people want to buy. Not a single model that is "flying off the shelves", when compared to the cars from Tesla.
 
bwilson4web said:
My understanding is there was a price cap on the allowed cost of the car. So Tesla 'hobbled' the battery and dropped the price enough the buyer could get the subsidy and the car. Then Tesla offers an 'after market' upgrade that restores the battery performance for a 'modest fee.'

Bob Wilson
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I read somewhere that the Tesla's that were cheap in Canada, could never be upgraded?
 
 
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I wonder if there was a minimum range required for the $5k (Canadian.) If so, the Canadian "base" could be tailored to fit. Regardless, given Tesla's flexibility to offer a "loss leader" so the real Standard Range Plus Model 3 is available makes a lot of sense: https://electrek.co/2019/05/02/tesla-model-3-range-upgrade-canada/

Not only reduce the range but every other specification to be below the lowest priced, EV like the 2019 smart EQ fortwo (convertible):
  • 57 mi range
  • 3 hour charge at 240 VAC only
  • no SuperCharger access
  • 60 KW motor (80 hp)
  • 102 MPGe
  • ugly paint . . . zebra or prisoner or bondo colors comes to mind
They've already set the price to the highest that fits. As a final coup d'grace, offer it only from a Tesla store that handles trade-in cars and is run by an ICE sales force.

Bob Wilson
 
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EV sales are down because the entire automotive industry is sputtering at the moment. During Q1 2019, GM's sales dropped -7%, Ford -1.6% (insulated by truck sales and Lincoln's renaissance), Toyota -6.1%, Nissan -12%, Mercedes -9.3%, Mazda -15.7%, and FCA's operating profit (not sales) dropped -29%.

And yes, we are heading towards an economic downturn. No knowing if it's a recession, but definitely a downturn.

1. The international downturn is bad news. Between Brexit, Chinese instability, trade wars, and oil insecurity (Iran), the global economy is on a downturn. If that becomes a recession, the US will follow.

2. The US economic fundamentals aren’t that great. Unemployment is low, but workforce participation is flat since 2014. Wage growth is up, but adjusted for inflation, it's at ≈0.9% and flat since 2014. Consumer spending is flat since 2014. Due to proportionally lower wages (-25%) and rising costs of rent, healthcare, and tuition, the average millennial makes $35k and has a net worth of <$8k. Car loans are maxing out -- 72 and 84 month car loans are increasingly common. The US economy stops in its tracks when the consumer can no longer consume.

3. The stock market is in a sugar rush. The corporate and 1-percenter tax windfalls resulted in a glut of stock buybacks and ballooning prices. This has been buoyed by foreign investors fleeing the international downturn and choosing the US as a haven. Additionally, the federal interest rate is crazy low, over-incentivising risky investment. All of these will run out eventually. The current stock boom doesn’t reflect a sustainable economic engine, it’s just burning the candle at both ends.

What this means for new EV sales is no bueno. EVs are expensive to develop, and dogged pursuit of shareholder profits has left many auto companies like the proverbial grasshopper before winter -- they should have invested in long term sustainability (EVs) while profits were high. When consumers tighten their belts, the $9k premium for a first-run EV becomes a hard sell. We'll probably see an increase in used EV demand due to lower operating costs, though, and I have anecdotally noticed increased public openness to short range EVs as commuter cars.
 
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