Just a few months ago economists worried that Tesla’s sales projections would fall short of expectation over the next few months. Now, Tesla is surprising experts with reports that the company brought in record sales following the announcement of the Tesla Model 3. The company set a personal record, delivering over 95,00 cars within the second quarter alone. The news of the sales record caused stock within the company to rise 7%, but some worry that the record may not sustain into the third and fourth quarters.
Arrival of the Model 3 Spikes Sales
Tesla and its CEO Elon Musk have been promising the arrival of a more affordable Tesla model for years now. Finally, at the start of 2019, the announcement of the Model 3 came. The $35,000 car is the first Tesla to introduce a cheaper all-electric car to the market. Tesla, which is known for its luxury interiors and features finally offered a no-frills version for those that wanted the benefits of a Tesla without having to buy into the luxury price tag. The base model of the car starts at $35,000 and goes up depending on what features you may want in it.
Other perks that came with the Model 3 were longer battery life and an increase on safety standards. One thing Tesla has become known for is its autopilot feature, but many are wary that the feature is safe enough to be used on roads this soon. Nevertheless, the car hit the market and drove up sales in record numbers. Tesla reported needing to go through rounds of layoffs in order to make the price adjustment happen, but it may bounce back after a hike in sales has led to more production.
2018 was a hard year for Tesla—more specifically Elon Musk, who went through a period of controversy between himself and the company after posting on Twitter that he planned to take the company private before talking to the company’s board members. Musk was nearly removed as CEO of the company, but is now working to earn back its good reputation among consumers. In an email sent by Musk at the end of quarter 2, the young CEO revealed that the company had exceeded its sales projections for the quarter.
Model 3 Sales
Most of the Tesla Model 3 sales have been in Europe and China. Sales in the United States have largely been due to a lease deal that Tesla released as an incentive to get people to purchase the new car. Around 87,048 Tesla cars were produced in the second quarter, representing a 13% increase in production from the first quarter of 2019.
Tesla believes that it will be able to successfully continue to increase production as it heads into the second half of the year. However, specialists worry that cutting prices in order to create more sales is not the answer for long-term growth. Only time will tell whether or not Tesla will be able to maintain its upward trajectory.