It’s been a while since Tesla attracted the doom and gloom stories it was once synonymous with. In large part, that’s because the American firm is in a stable phase between products. The Model 3 is now everywhere, released in right-hand drive markets like ours. The Model X and Model S have had their line-ups simplified. Things are humming along.
But, it’s not all blue skies. Reuters has reported that Tesla suffered a 39 per cent revenue drop in the United States in the third quarter of 2019 — the first time they’ve experienced such a fall in a third quarter in two years. The outlet reports that US sales dropped from US$5.13billion in 2018 to US$3.13billion this year.
In some ways, this shouldn’t be a surprise. By the third quarter last year, the Tesla Model 3’s North American release and delivery to the public was in full swing. By October, over 100,000 units (most of which were within the US) had been delivered. It’s to be expected that year on year the uptake of a new vehicle like the Model 3 would slowly decline.
Thankfully for Tesla, the third quarter was redeemed somewhat Where Tesla actually made up some momentum was through China and Europe. Sales in China specifically increased by 64 per cent, with a US$669million revenue the result. The rest of the world almost doubled, jumping by more than US$1billion to US$1.83billion.
Overall, it made for an 8 per cent decline and simultaneously a US$342million quarterly profit. All up, it appears to have been a month of solid consolidation for the brand, who’s foothold in the market continues to widen beyond United States borders. A record 97,000 cars were delivered in the quarter, with hopes of executing between 360,000 and 400,000 deliveries for 2019.
“Musk & Co. are laser-focused on Europe and China for growth, while domestically, core demand is fading relative to other regions,” said Wedbush analyst Dan Ives, adding that improvement of growth in the American market will be a tougher task for Tesla.
Success in China comes at an optimal time, given that Tesla has just started trial production in its new Shanghai factory. Not only will the factory help nurture growth in China, but it’s likely to also better serve other markets in Asia and Oceania.