Tesla Inc (TSLA)

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Tesla struggling to increase demand.

For much of the past decade, the narrative surrounding Tesla, Inc. was that the company sold every car it built. The bull camp continued to argue that the only thing holding back the electric vehicle ("EV") maker from selling more vehicles was its production limits. In the past couple of quarters, however, production has meaningfully outpaced delivery figures, despite numerous major tailwinds.

In the past three quarters, Tesla's total production has outpaced deliveries by just under 75,000 vehicles.

The delivery numbers are even more curious when you consider some of the tailwinds we've seen recently. Tesla announced major price cuts just after 2023 started, and it followed that up in early Q2 with more price reductions. Year to date changes in select markets can be seen below in local currencies, and these numbers exclude any potential incentives. The company is further discounting inventory units it has on hand, even on the Long Range Model 3 that just resurfaced in the U.S. as well as the Model Y.



There are conflicting thoughts on Tesla opening up its charging network as well. On one hand, it brings in more services revenue to Tesla, but the move also makes the competition stronger as charging fears are eased.

The Cybertruck isn't expected to be material to Tesla's results this year, with mass production really planned for 2024, and of course new vehicle platform launches are always tricky. Some bulls may argue that Cybertrucks on the road will essentially be an advertising campaign for Tesla, but bears could also argue that some Tesla fan purchases of the pickup as a novelty item could take away some sales from the current lineup.

At the moment, I would be a little hesitant to buy Tesla given the tremendous rally. We have a Fed meeting this week, and if the dot plot update shows that interest rates will remain higher for longer than the market expects, the growth stock rally could fizzle out here.