√Tesla electric-car demand at record levels after price cuts, says Elon Musk

Unprecedented price cuts have seen demand for Tesla’s electric cars exceed the rate of production by two-to-one, CEO Elon Musk told investors and media today.

US electric car specialist Tesla claims it is receiving customer orders for its vehicles twice as fast as it can build them – after slashing prices by up to 20 per cent globally earlier this month.

As reported previously, Tesla implemented unprecedented price cuts across its model range over the past few weeks, amid what industry analysts say is slowing demand in some countries, and a growing number of cheaper competitors.

The price cuts – up to 20 per cent, or $US21,000 in the US – appear to have worked, as demand for Tesla cars has hit at record levels, according to CEO Elon Musk.

“Thus far in January we’ve seen the strongest orders year-to-date than ever in our history. We are currently seeing orders at almost twice the rate of production,” Mr Musk told investors and media on Thursday morning Australian time.

MORE: Tesla panics, slashes prices in the US and Europe by up to 20 per cent

“It’s hard to say whether that will continue at twice the rate of production, but our orders are high, and we actually raised the Model Y price a little bit [by $US500 earlier this week] in response to that.

“We think demand will be good despite probably a contraction in the automotive market as a whole.”

Mr Musk acknowledged the impact of the price cuts on stimulating the demand for Tesla cars – after 18 months of steady price rises in the US and overseas, including in Australia.

“Price really matters. There’s a vast number of people that want to buy a Tesla car, but can’t afford it, so these price changes really make a difference for the average consumer,” Mr Musk told investors and media.

“Well-off people with a lot of money, they sometimes forget how important affordability is.”

Mr Musk did reveal the number of orders before the price cuts – or estimate by how much the price cuts increased demand.

Website Car News China reported the price cuts in China – which were smaller than those in the US, about 13 per cent – triggered a spike in orders by up to 500 per cent in the span of one month in some regions of the country.

Tesla executives said the company believes it could deliver up to two million electric cars in 2023 – up from 1.31 million in 2022 – pending any production slowdowns or softening of demand.

“Our internal production potential is actually close to two million vehicles. But we were saying 1.8 [million] because there just always seems to be some force majeure [unexpected global events beyond Tesla’s control] thing that happens somewhere,” Mr Musk told investors.

“We don’t control things like earthquakes, tsunamis, wars, pandemics, etcetera. (But) without some big supply chain interruption or massive problem we actually have the potential to do two million cars this year.”

“We’re not committing to that [target]. I’m just saying that’s the potential. I think there will be demand for that [target] too,” said Mr Musk.

Despite the price cuts, which have reduced the profit per vehicle sold, Tesla executives told investors and media the company still expects to earn more than 20 per cent profit on each sale.

According to news outlet Reuters – as reported by Drive yesterday – Tesla earned between $US11,442 and $US15,653 ($AU16,240 to $AU22,250) for each vehicle it sold last year, more than double that of Volkswagen, four times Toyota, and five times Ford.

Reuters reports only Chinese electric-car brand BYD earns more profit per vehicle, at up to $US14,921 ($AU21,180).

Mr Musk continues to come under criticism for his acquisition of social media platform Twitter, which has diverted his attention from the electric-car company.

Industry analysts claim there is a growing lack of confidence in Tesla’s leadership among investors, which has coincided with decreases in Tesla’s share price and company value.

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