Elon Musk sent all of the Tesla employees an email last week urging staff to minimize the cost of upcoming electric vehicle deliveries. The email noted that instead of pushing cars out the door with the extra fees added, he wants to focus on longevity over maximized deliveries for the final quarter of the year.
The email that Elon Musk sent to Tesla staff about upcoming deliveries
CNBC says the email sent out to Tesla employees from Elon Musk was titled “Q4 deliveries vs. cost efficiency.” In the past, Tesla has been famous for pushing out deliveries before the end of the year. It seems that this year, the electric vehicle company is taking a step back from that goal. Right now, supply-chain issues and semiconductor chip shortages have inflated prices of everything. That includes shipping and delivering charges, such as the ones associated with Tesla deliveries.
Musk noted that the usual process is to rush deliveries by any means necessary during December, only to see things fall off at the start of the new year. When looking over six months, Tesla says the amount of cars delivered remains the same. However, there is an increased cost at the month for the same deliveries. “We will have spent a lot of money and burned ourselves out to accelerate deliveries in the last two weeks of each quarter.”
Delivery costs are sky-high for Tesla and everyone else
Tesla, like every automaker, has had trouble sticking to delivery deadlines this year. Tesla customers have reported months-long delivery delays. In many cases, this left potential buyers without a car and relying on other (expensive) transportation methods. In some situations, buyers had to re-apply for loans. The Tesla Cybertruck was delayed into 2022 without much information.
The email noted that there will still be a large wave of deliveries toward the end of the month, but that is normal. Since Europe and Texas are not at full-volume production yet, there will be a lot of deliveries going in a variety of directions. Is the “don’t yet have high volume production” key here?
The Tesla CEO hopes that focusing on “reducing the size of the wave in favor of a steadier and more efficient pace of deliveries” will help keep costs down. He also notes it is it most efficient action the group can take. With shipping in such a state of panic and at an all-time high for costs, it makes sense Tesla would want to avoid it.
For now, the automaker seems to be delivering EVs as quickly as possible
In 2020, Tesla delivered around 500,000 electric vehicles. In 2021, the EV maker has reportedly delivered 627,350 cars already. There hasn’t been a clear goal for the automaker to hit as far as deliveries this year. JL Warren Capital’s CEO and Head of Research, Junheng Li, told investors she anticipates Tesla sales to continue to increase in China. “Soaring gas price benefits all new energy vehicle brands,” Li commented.
Many buyers have already been waiting months to take delivery of a Tesla Model S at this point. While it makes sense to try and avoid the added cost, it is also disappointing for those who have been waiting. Will Tesla be able to eke out an exceptional Q4 anyway?