While some folks may say demand for Tesla's EVs is waning, others note that finally catching up could mean even greater success.

tesla's reduced wait times should worry rivals, says analyst

Tesla CEO Elon Musk has made it clear he’s embarrassed by the brand’s high and rising prices, and he wants to do everything he can to get people their cars in a timely fashion. If Tesla was able to reduce the wait time for its vehicles, it may not have to hike the prices so much, since it wouldn’t be worried about forecasting inflation and pricing for supplies so far down the road. Musk recently admitted:

“We’ve raised our prices quite a few times. They’re frankly at embarrassing levels. But we’ve also had a lot of supply chain and production shocks and we’ve got crazy inflation.”

He also made the following comment about delivery wait times during Tesla’s Q2 2022 earning call:

“That’s annoying. It’d be like go to a restaurant and you order a burger and you have to wait 3 hours and like. You want to get your burger right away. Same with the car. So we want that lead times to reduce.”

When Tesla can’t make enough cars to satisfy the demand, it’s under scrutiny. This is even true when it’s one of the few global automakers successfully combatting the aftermath of COVID-19, the chip shortage, and other supply chain constraints. When Tesla is able to make more cars, and delivery times reduce, there are red flags about a lack of demand.

Tesla has also been criticized for opening new factories, as some people predict the demand for its EVs will fall off a cliff any day now. Now, the new factories and upgrades are working as planned, reducing delivery times, and there are already reports of a lack of demand for Tesla’s vehicles.

People who are in the market for an EV are almost certainly aware of Tesla. Love the company or hate it, it’s the biggest name in the EV space, as well as the reason many people are even aware that electric cars exist. However, there’s a good chance at least some of those people have decided to skip the Tesla and lease or buy a competing EV.

There are obviously many reasons why this might happen. The high price of Tesla’s products, along with the fact that you may have to wait a year to take delivery are certainly primary concerns. In addition, Tesla’s EVs haven’t been eligible for a federal EV tax credit for some time now, and that’s about to change going forward.

According to an article in Investing.com, an analyst from Piper Sandler shed light on Tesla’s reduced delivery times in areas that get their cars from the automaker’s Giga Shanghai factory in China.

Tesla produced almost 77,000 Model 3 and Model Y units in August 2022 in China alone. The company has been upgrading the lines at the factory to speed up production, and it’s already seeing a positive impact. Clearly, one of the primary reasons Tesla is beginning to catch up with the demand in China is it’s producing more cars. The same is beginning to prove true in the US, with Tesla’s new factory in Austin ramping up. The analyst wrote in a note to investors:

“As production ramps and wait times fall, we think Tesla will remain singularly capable of quickly meeting consumer EV demand at palatable price points. While other brands struggle to ramp production, Tesla will (presumably) start cutting prices, thereby boosting market share at everyone else’s expense.”

The analyst added that investors shouldn’t expect gross margins to by as high as they’ve been, since they’ll probably be impacted by price cute. Nonetheless, he shared:

“If Tesla’s upstream supply bottlenecks truly are breaking, we think it’s a scary prospect for other brands.”

What do you think? Are Tesla’s reduced delivery times negative or positive? Leave us your thoughts and reasoning in the comment section below.

Keyword: Tesla's Reduced Wait Times Should Worry Rivals, Says Analyst

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