Sales of Tesla vehicles increased by a better-than-anticipated 10% in the second quarter as the Elon Musk-led company benefited from government incentives and price reductions that made its electric vehicles more affordable than similar gasoline-powered versions.
Surge in Quarterly Sales
Tesla reported on Sunday that it delivered 466,000 units from April to June, up from 423,000 during the prior quarter. Sales increased 83 percent year over year in the second quarter as a result of the company increasing production at new factories in Austin, Texas and close to Berlin. The sales results exceeded Wall Street analysts’ predictions and demonstrated companies ability to combat the impact of increasing interest rates, which increase monthly payments for those who finance their vehicle purchases.
Tesla was the first automaker to announce its sales figures. Analysts predict that the last quarter saw a significant increase in sales for the majority of major auto companies. Supply chain problems have improved, making it simpler for automakers to obtain the components they require and for consumers to locate the vehicles they desire. U.S. new car sales are expected to increase by more than 8% this year from 2022, according to analysts at Cox Automotive.
Tesla vehicle purchasers were eligible for $7,500 in federal tax credits because to new regulations that went into force this year. With the credit, the least costly Model 3 sedan sells for less than $33,000, making it more affordable than similarly styled gasoline-powered luxury sedans offered by Mercedes-Benz and BMW as well as mainstream vehicles like the Toyota Camry and Honda Accord.
Increasing Trend of EVs
Electric car owners also benefit from reduced maintenance expenses and fuel savings. Electricity is typically less expensive per mile than petrol, and electric vehicles don’t need to have their oil changed. According to Kelley Blue Book, Tesla has a market share of 62 percent for electric vehicle production in the US as of the first quarter. However, as more electric models are being offered by reputable automakers like General Motors, its market share has decreased from more than 70% at the beginning of 2022.
Local automakers with more recent model portfolios, like BYD, compete fiercely with Tesla in China, which has a larger market for automobiles than either the United States or Europe. According to consultancy company AlixPartners, Chinese automakers have had their electric vehicles on the market for little longer than a year on average. The Model Y sport utility vehicle, Tesla’s best-selling vehicle, went on sale in 2020. According to AlixPartners, who cited consumer surveys, Chinese manufacturers also provide entertainment and information systems, as well as interior and exterior style that better suits regional tastes.