Tesla has ceased sales of the most affordable version of the Model 3 sedan in the US. An analyst referred to it as a wise strategic move.
Tesla quietly stopped selling the Standard Range Rear-Wheel Drive Model 3 in the US. This move was praised by a bullish analyst speaking to Business Insider. The electric carmaker, run by Elon Musk, removed this version from its website as of Wednesday, as reported by Reuters.
The cheapest Tesla car in the US is now the Model 3 Long Range Rear-Wheel Drive, priced at $42,490. The discontinued model utilized lithium iron phosphate battery cells sourced from China, according to Reuters. Earlier this year, the US imposed tariffs on EVs imported from China, as well as on EV batteries and key minerals.
Vehicles using Chinese-made components, such as the LFP batteries, are no longer eligible for the $7,500 federal tax credit. Dan Ives, an analyst at Wedbush and a long-time Tesla supporter, told Business Insider that discontinuing the model is “a smart strategic move” indicating a greater focus on the Long Range Model 3. Ives also noted that the tariffs on Chinese EVs reflect substantial tension in the US-China Cold Tech War, which benefits Tesla.
He added that removing the Standard Range model does not significantly impact Tesla’s overall strategy, as the Model Y remains the company’s primary focus in the US EV market. The starting price for the Model Y is $44,990. Affordability has become a major concern for electric carmakers , as most EV options, including Tesla’s, are still more expensive than the average gas-powered car. Tesla has previously discussed plans to manufacture a cheaper car than the Model 3, but has not yet done so.
Tesla’s decision to discontinue the cheapest version of the Model 3 came shortly after the company slightly exceeded analysts’ delivery expectations, with third-quarter sales reaching 462,890 vehicles. Ives told BI that Tesla’s sales were “a step in the right direction” to meet its yearly target of 1.8 million vehicle deliveries. Bargain Chinese EVs Adding to the price war are Chinese competitors like Xpeng, which recently introduced the Mona M03 at $16,800 — less than half the price of Tesla’s Model 3 in China.
Nio and BYD are planning to launch a new, affordable brand called Onvo, which would directly compete with Tesla’s Model Y. Nio also has plans to launch a second EV brand named Firefly, which would retail for under $30,000, as reported by Reuters in May Chinese government policies, including scrapping and replacement subsidies, continue to fuel demand for more affordable EVs in the country, according to a September note from HSBC analysts.
The bank anticipates that over 100 new models will be launched in China by the end of 2024, primarily by the country’s EV brands. Tesla did not respond to a request for comment sent by BI outside business hours.
Tesla is no longer offering the sub-$40,000 rear-wheel drive Standard Range version of the Model 3 that has been in the company’s lineup since 2023. The most affordable trim is now the Model 3 RWD Long Range that starts at $42,490. This change was initially highlighted by Electrek and coincides with Tesla’s announcement of a year-over-year increase in vehicle deliveries in its third quarter of 2024.
Tesla has adjusted prices numerous times over the past few years as it strives to maintain its leading position in the market. However, an increasing number of customers have turned to other vehicle brands, resulting in year-over-year sales declines for Elon Musk’s company .
Tesla also discontinues certain trims occasionally, often without prior notice or fanfare. Earlier this year, the company ceased offering the $60,990 RWD Cybertruck, the cheapest version of its angular EV truck.
The Model 3 Standard Range, which claimed a 272-mile range on a full charge, utilized more affordable lithium iron phosphate (LFP) cells produced in China. These cells are likely to become more expensive to import due to the Biden administration’s decision to raise tariffs on Chinese batteries, semiconductors, and critical minerals. Before incentives, it was the only model that came close to the short-lived and long-promised $35,000 Model 3.
Tesla’s RWD Long Range costs $3,500 more than the discontinued Standard Range. This price difference isn’t substantial considering that the Long Range model is estimated to have a 363-mile range on a full charge, although Tesla has faced accusations of inflating its range estimates .
Despite the Model 3 Standard Range no longer being available for order, Tesla is still working on a more affordable, yet-to-be-announced vehicle for the second half of 2025, which could either be a new car or a more basic version of the Model 3.
Tesla’s ability to make its vehicles more affordable by simplifying them further is uncertain, especially considering that a more basic version of the Model 3 in Mexico turned out to be more expensive than US models, even though the newer models already lack drive and turn signal stalks .
The production and delivery report for Tesla’s third quarter has been released.
After two consecutive quarters of decline, Tesla’s vehicle sales are finally increasing.
During the three-month period ending in September, Tesla produced 469,796 vehicles, marking a 9.1 percent increase compared to the third quarter of 2023. Additionally, the company delivered 462,890 vehicles to customers in Q3 of 2024, representing a 6.3 percent increase from Q2 2023 .
These figures show improvement over the previous quarter, with production up 14.4 percent compared to the second quarter of 2024 and delivery up 5.8 percent. Tesla is producing and selling more vehicles than earlier this year.
While the Cybertruck may be contributing to this growth, Tesla does not provide specific numbers for this electric truck. The majority of its production and delivery consists of Model 3 and Y vehicles, with 443,668 produced and 439,975 delivered in Q3. Other models, including Model S, X, Cybertruck, and Tesla Semi, fall under the “other models” category.
However, Tesla faces challenges as overall electric vehicle (EV) sales are growing slower than in previous years, with customers showing more interest in hybrids rather than pure battery-electric vehicles. As Tesla exclusively produces battery electrics, it may be at a disadvantage compared to traditional automakers with more diverse lineups.
The company also faces increased competition, both in the US and in China, where companies such as BYD and Geely are achieving record EV sales. Tesla’s regional sales numbers are not disclosed, making it difficult to pinpoint its specific strengths and weaknesses.
Tesla’s full third quarter earnings will be reported on October 23rd. Before that, on October 10th, the company is expected to unveil its long-awaited “robotaxi,” with CEO Elon Musk making a strong pitch for Tesla’s future as an AI and robotics company .
Tesla, founded in 2003 and named after inventor Nikola Tesla, gained prominence after Elon Musk joined the company a year later. Musk invested $30 million in Tesla, became the chairman of its Board of Directors, and later secured funding from Google’s founders.
The prototype for Tesla’s first electric car, the Roadster, was revealed in 2006 and went into production in 2008. By June 2009, 500 Roadsters had been sold at a price of $98,000 each.
In 2017, Tesla entered the mainstream market with the launch of its Model 3, which became the world’s most popular plug-in electric car in 2020, with approximately 501,000 unit sales in 2021. Between January and March 2022, Tesla set a new delivery record , surpassing 310,000 units.
Tesla’s shares surged by over 7% on Tuesday, July 2, following the release of its latest quarterly delivery numbers, which exceeded consensus expectations. In the second quarter, Tesla produced around 410,831 vehicles and delivered approximately 443,956 vehicles, surpassing the analyst consensus of 439,302 deliveries. The quarter saw Tesla produce 386,576 Model 3/Y vehicles, with 422,405 deliveries. Tesla’s shares reached a high of $226.66 following this news.
Thomas Monteiro, a senior analyst at Investing.com, remarked, “The better-than-expected Q2 deliveries are not only a breath of fresh air for Tesla’s margins but also for the EV market as a whole. Although these numbers were naturally boosted by strong auto demand in the US in general—GM’s sales, released shortly before, further attest to this—it indicates that the EV market is still alive, as several analysts were quick to point out a few months ago.
“However, deliveries only offered limited support to the ongoing rally. The real focus for investors is on the technology front, with both the humanoid robot and the Robotaxi stories developing at an exciting pace. Both, particularly when combined, have the potential to become absolute game-changers for the company’s margins, meeting the expectations of Tesla shareholders.”
What Is Tesla’s Annual Revenue?
Tesla’s annual revenue in 2021 was $53.8 billion, marking a 70.64% increase from 2020 when it earned $31.5 billion in sales. In 2022, Tesla maintained its position as the leading EV manufacturer by revenue and market share, surpassing Volkswagen.
During Q1 2022, Tesla sold over 310,000 vehicles, and its vehicle deliveries totaled 254,700 units in Q2 2022. For the quarter ending June 30, 2022, Tesla’s revenue was $16.934 billion, showing a 41.61% year-over-year increase. The revenue for the months ending June 30, 2022, was $67.166 billion, reflecting a 60.45% growth year-over-year.
In the third quarter of 2022, Tesla’s revenue was $21.454 billion, and in the fourth quarter, it reached $24.32 billion, representing a 37.24% year-over-year increase. The revenue for the twelve months ending December 31, 2022, was $81.462 billion , indicating a 51.35% growth year-over-year. In 2022, Tesla’s hourly revenue was $8,703,704, compared to $13,981 per hour in 2012.
In the second quarter of 2024, Tesla reported earnings with EPS of $0.52, falling short of the analyst estimate of $0.61. The revenue for the quarter was $25.5 billion, surpassing the consensus estimate of $24.33 billion.
In 2022, Tesla achieved remarkable delivery statistics, with the company delivering 1,313,851 vehicles globally, marking a 40% increase from the previous year. It also increased its car production by 47% compared to 2021.
Tesla’s sales in the US outperformed other luxury car brands, with 491,000 vehicles sold in 2022, securing its position as the leading luxury car sales leader. The company also made significant contributions to American car manufacturing by producing its cars in California and Texas under Elon Musk’s leadership.
During 2022, Tesla expanded its international factories, commencing vehicle production at Giga Berlin in Germany and updating the factory in China to manufacture up to 750,000 Model 3 and Model Y electric cars additionally annually., Tesla enhanced its production capacity across all its factories to produce 100,000 Model S and X vehicles per year, along with 1.8 million Model Y and Model 3 vehicles.
In late 2022, Tesla reduced the prices of its vehicles globally, making its Model 3 and Model Y cars more affordable in several countries. This move aimed to accelerate the world’s transition to sustainable energy by enabling more people to purchase Tesla’s cars.
How Many Tesla Vehicles Are Sold Each Year?
Tesla has been increasing its annual production steadily. In 2014, the company manufactured only 35,000 vehicles. In the first half of 2021, Tesla produced 386,759 cars, with 184,877 vehicles delivered in Q1 and 201,304 in Q2. Overall, in 2021, Tesla manufactured 930,422 EVs and delivered 936,222, setting a new record. These numbers indicate a year-over-year growth of 82.5% compared to 2020.
There were 906,032 Model 3/Y vehicles produced, representing a 99% increase from 2020. In the same year, Tesla manufactured 24,390 Model S/X cars, showing a 56% decrease year-over-year. The deliveries of the latter model also decreased by 56% compared to 2020, amounting to 24,980 vehicles. Deliveries of the Tesla Model 3/Y reached 911,242, marking a 106% increase from 2020.
In the first and second quarters of this year, Tesla produced 564,750 vehicles. Analysts anticipate that Tesla’s rapid growth may accelerate in the third quarter and beyond. During the annual shareholder meeting, Elon Musk discussed the company’s future production plans, that stating by the end of 2022, Tesla might achieve an annual production run rate of 2 million vehicles:
“We’re aiming to achieve a 2 million vehicle run-rate by the end of the year… Thanks to the hard work of the Tesla team, we’ve already been able to achieve a 1.5 million unit annualized run rate. And depending on how the rest of this year goes, I think we might get close to, or will get approximately at the 1.5 million mark, and will be exiting the year at a 2 million-unit run-rate,” Musk said.
In the fourth quarter of 2022, Tesla delivered nearly 405,300 units. Its quarterly deliveries grew by 17.87% during this quarter, compared to the same quarter of 2021. Between November and December 2022, Tesla’s deliveries crossed the 405,000 unit mark, setting a new record The deliveries in the third quarter of 2022 totaled 343,000. Overall, in 2022, Tesla delivered 1,313,851 and produced 1,369,611 units. Since 2018, Tesla has delivered 3,382,821 and has produced 3,429,532 cars.
The company also stated that the factory in Shanghai enables it to manufacture 750,000 Model 3 and Model Y electric vehicles a year. The production capacity of Tesla’s factory in California allows it to annually produce 100,000 more expensive Model S and Model X cars, along with 550,000 of its Model 3 and Model Y vehicles. The company’s Texas factory can produce 250,000 Model Y vehicles annually, and so can its factory in Germany.
Tesla’s 2022 Year-End Vehicle Production and Delivery
Tesla began the new year by releasing its fourth-quarter vehicle production and 2022 delivery report on January 3, 2023. Total annual deliveries reached a new record of 1.31 million, increasing by 47% compared to the previous year. Total annual production reached 1.37 million . The most popular vehicle of the year proved to be the Model 3, comprising over 95% of produced and delivered cars.
The Q4 deliveries and production could have been more remarkable. Their numbers fell short of analysts’ consensus, who expected Tesla to deliver around 427,000 cars. Contrary to analysts’ predictions, Tesla delivered 405,278 vehicles and produced 439,000 cars in the fourth quarter.
The period ending December 31, 2022, was challenging for the company due to Covid outbreaks in China, leading to reduced production at its Shanghai factory. Yet Elon Musk sounded optimistic when he expressed his anticipation to achieve “50% average annual growth in vehicle deliveries over a multi-year horizon.”
How Many Tesla Vehicles Are Sold by Country?
Tesla sold and delivered the majority of its vehicles in China in 2021. Of these electric cars, 478,078 were made in Tesla’s production facility, Gigafactory Shanghai. From its American facilities, Gigafactory Texas and Gigafactory California, Tesla sold 301,998 vehicles.
The company is gaining popularity in Europe. In 2021, it sold 169,507 vehicles in European countries, where the Tesla Model 3 was named Europe’s favorite electric vehicle. In 2019, the Netherlands purchased the largest number of Tesla cars among European countries – 30,911 vehicles. Norway and Germany followed the Netherlands’ example with 18,798 and 10,711 cars purchased respectively.
In the United States, Tesla was the first manufacturer to reach 200,000 cumulative sales of electric vehicles, reaching the end of its government subsidy cap of $7,500 per sold car. In other words, since January 2020, no Tesla vehicle sold in the USA has received any subsidy.
Tesla began producing its vehicles in China in 2018. In January 2020, Tesla’s Chinese Gigafactory launched the output of the Tesla Model 3 Sedan and batteries. The production of the Tesla Model Y began on the Chinese mainland in 2021
How Many Tesla Charging Stations Exist?
As of the start of 2022, there were a total of 3,724 Tesla Supercharger stations worldwide. These charging stations are strategically placed in urban and rural areas to allow Tesla owners to recharge their vehicles in just fifteen minutes. In response to increased sales, Tesla has Made significant efforts to expand the availability of charging stations. Between July 2018 and July 2021, Tesla added 1,652 new Supercharger stations.
By the end of 2021, Tesla was operating 3,059 Supercharger stations in more than forty countries. The number of charging stations for Tesla electric vehicles grew by 86.07% from July 2019 to July 2021.
In October 2021, the majority of Tesla Superchargers were situated in the United States and China, accounting for 65.53% of all Tesla charging stations. The USA had 1,159 Tesla charging facilities, representing 37.88% of all locations, while China had 846, making up 27.65% of all Superchargers. Canada had 125, or 4.08% of all Tesla Supercharger locations.
Tesla manufactures electric vehicles in three countries: the United States, China, and Germany, utilizing a total of six manufacturing facilities. Four of these facilities have been fully operational for several years. In addition to the original Fremont Factory in California, Tesla has added three more operating manufacturing facilities: Gigafactory Nevada, Gigafactory New York, and Gigafactory Shanghai in 2016, 2017, and 2018, respectively. Across its Fremont and Shanghai locations, Tesla has installed an annual production capacity of 1.5 million cars.
Gigafactory Berlin-Brandenburg in Germany was officially inaugurated on March 22, 2022. This factory is designed to produce batteries, battery packs, and powertrains for use in Tesla vehicles additionally, the first Model Y Performance with 2170-cells was manufactured in April 2022 at this location.
Gigafactory Texas, near Austin, Texas, commenced limited production of the Model Y toward the end of 2021, with the first deliveries of electric vehicles from this factory occurring on April 7, 2022. Gigafactory Texas is also intended to be the primary site for the production of the Tesla Cybertruck and the Tesla Semi, as well as the location of Tesla’s corporate headquarters. It is the second largest factory in the United States by size and the second largest building in the world by volume.
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