June 22, 2024
News

The Growing Number of Unsold Teslas is Visible From Space

Image: Patrick Pleul (AP)

Bygone are the days when Tesla vended every vehicle it could construct fresh off the assembly line. We’re now at the juncture where the corporation has essentially manufactured an excess of automobiles. The carmaker is evidently conscious of this, lowering prices on sought-after models like the Model Y as stockpiles amass. Buyers aren’t showing interest though and now the carmaker has such a surplus of unsold stock that, as Sherwood News notes, they’re being stored in lots that are observable from outer space.

In Q1 2024, Tesla announced that it produced 433,371 vehicles. Out of those, 386,810 were actually bought. This implies the carmaker has an additional 46,561 vehicles it didn’t manage to sell. This can be attributed to the general EV sales downturn, standstill, whatever moniker you prefer to give it. Tesla had a hand in this as well as Sherwood highlighted:

“The primary reason for this was an upsurge in stock from a discrepancy in production,” Tesla Chief Financial Officer Vaibhav Taneja remarked on the company’s -$2.5 billion in free cash flow (investment in AI computers was also a factor). “We anticipate the stock surplus to diminish in the subsequent quarter and expect free cash flow to turn positive once again.”

So where precisely are all those myriad Teslas? They’re just loitering in lots. Utilizing images from SkyFi, a satellite image market, Sherwood was able to pinpoint exactly where all those Teslas are being housed. Pictures taken of Tesla’s Texas Gigafactory from a random Thursday in October 2023 and a Thursday from March of 2024 exhibit lots around the factory transitioning from partially or nearly full to completely overloaded in some instances.

Tesla is depositing vehicles in other locations across the nation as well it seems. Satellite photos from St. Louis’ Chesterfield Mall reveal a lot outside the mall being inundated with nearly 500 cars. Even the mall here in my own city of Moreno Valley, California has been utilized to store Teslas; I recently noticed a few hundred Model Ys parked outside Sears. So while Tesla is still vending hundreds of thousands of cars, it would seem that the brand isn’t the hot commodity it once was. It prompts one to question how long they’ll persist in feigning ignorance of the fact that they have thousands of unsold units accumulating.

FAQ

Q: Why has Tesla accumulated so many unsold vehicles?

A: Tesla’s surplus of unsold vehicles can be attributed to a mismatch in production leading to excess inventory.

Q: How is Tesla planning to address this issue?

A: Tesla aims to reverse the inventory surplus in the upcoming quarter and return to positive free cash flow.

Conclusion

Despite Tesla’s historical success in selling vehicles, the current scenario of surplus inventory indicates a shift in market demand for electric vehicles. The company’s strategy to manage excess stock and regain positive cash flow will be crucial in navigating through this challenging period.

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