Diary of a Tesla Short Seller: Full Self-Pumping Backfires Hard
With less than 2 weeks left in Q1, Tesla makes a strong quarter-end sales pump, only to have bad news leak about its China factory cutting output by 23%
Tesla Accidentally Shoots Itself in the Foot this Week
Tesla went on an unprecedented quarter-end pump to increase Q1 2024 sales in the last two weeks of this quarter, which ends in 9 days.
Because Tesla’s model lineup is old and stale, they’ve slashed prices by 29% in the past year.
A week ago, Tesla’s Twitter account announced a $1,000 price hike in North America, the EU, and China from April 1st. The question is, why now? It’s likely because big inventory.
Figure 1: Tesla Announces $1,000 Price Hikes in North America but Leads You to “New Car” Inventory on Website
Figure 2: Tesla Threatens to Raise Prices In Europe but Has Ample Inventory
Figure 3: Tesla Cuts Prices by $3,831 in China
Fun fact: China Prices Set to Rise by $3,830 from April 1st.
Bloomberg reported that Tesla has cut production in China, its most profitable plant, by 23% due to weak demand. Tesla is trying to pump sales in China with $3,830 incentives which they say are only good until until the end of March. This means that Tesla’s average prices are set to rise by $3,830 from April 1st, which I imagine will form a huge headwind for demand. At this point, the price war in China’s car market is so fierce that a price hike of that amount would likely eliminate most of the demand for Teslas.
And this comes at a time when Tesla’s exports can’t hold up the fort, as exports to the EU drop because Tesla is utilizing its German factory’s Model Y capacity, rather than importing them from Shanghai. Exports from Tesla’s Shanghai factor are down by 22% YTD.