Tesla's Genius Strategy for How It Delivers Cars To and From China
Tesla China has delivered 73,500 cars in Q3.
Tesla China has expected 55,700 cars in Q3.
Tesla China has delivered 204,200 cars so far in 2021.
Tesla China has expected 94,400 cars so far in 2021.
Great Tesla. Great Tesla China. $tsla
— Tesla China Analyst (@teslashanghai) October 2, 2021
Tesla Sales in China
Let's take a look at the numbers from Tesla China over the last few months of this year and see why they are what they are. Numbers are much more accurate over the last several months as opposed to earlier in the year where just approximations are able to be found. Exports = how many vehicles Tesla shipped out of China to deliver. Domestic = how many vehicles Tesla sold directly to customers in China.
Source: Tesla Daily
Total Vehicles: ?
Total Vehicles: 56,006
Total Vehicles: 44,264
Total Vehicles: 32,968
Total Vehicles: 33,155
Total Vehicles: 33,463
Total Vehicles: 40,019
Total Vehicles: 35,478
Total Vehicles: 21,318
Total Vehicles: 22,484
What is the big deal with Tesla's strategy when we look at these China numbers? It is the number of cars exported for each month in a quarter. The quarters are January through March; April through June; July through September; October through December.
We should expect the export numbers to be the smallest at the end of the quarter in March, June, September, and December later this year. Why? Because Tesla exports most of its vehicles at the beginning of the quarter so that by the end of the quarter, those exports and cars on boats that take time to get to customers are actually delivered and are counted in the quarterly earnings and results.
That is the reason for Tesla doing much more exporting at the beginning of the quarter instead of the end of the quarter. When the end of the quarter comes and it is the last month, Tesla focuses on local deliveries in order to have as many vehicles delivered as possible for the quarterly earnings and results.
Will Tesla Change Its Strategy?
I believe Tesla will change its export strategy from Giga Shanghai when Giga Berlin has reached a full production ramp. When that happens, Tesla won't need to export nearly as many vehicles from Giga Shanghai that it does now.
I'm sure some exporting is still going to occur, but it won't be nearly as much and Tesla won't have to do a bunch of exporting at the beginning of the quarter in order to have the most favorable quarterly earnings report.
Giga Shanghai is going to continue to grow. Total deliveries in China for 2021 so far is 204,200 (until we get October's numbers). Giga Shanghai will have a production volume of over 1 million vehicles, so I would expect Tesla to have a much greater set of China numbers in 2022 and beyond.
What do you think of Tesla's strategy in China? Are they doing the right thing exporting at the beginning of the quarter? Will Tesla need to export when Giga Berlin reaches volume production?
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Jeremy Johnson is a Tesla investor and supporter. He first invested in Tesla in 2017 after years of following Elon Musk and admiring his work ethic and intelligence. Since then, he's become a Tesla bull, covering anything about Tesla he can find, while also dabbling in other electric vehicle companies. Jeremy covers Tesla developments at Torque News. You can follow him on Twitter, Facebook, LinkedIn and Instagram to stay in touch and follow his Tesla news coverage on Torque News.