Please ensure Javascript is enabled for purposes of website accessibility

As Everyone Else is Struggling to Produce Cars, Tesla Delivers a Record Number

By The Daily Upside – Oct 3, 2021 at 9:00PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

What supply chain problem? The crisis has slammed the brakes on the auto industry — but Tesla didn't seem to get the memo. On Saturday, Elon...

For more crisp and insightful business and economic news, subscribe to The Daily Upside newsletter. It's completely free and we guarantee you'll learn something new every day.

What supply chain problem? The crisis has slammed the brakes on the auto industry — but Tesla didn't seem to get the memo.

On Saturday, Elon Musk's electric carmaker said it delivered 241,300 cars worldwide in the latest quarter. It's a record for the company that not only blew past analyst expectations, but also suggested that Tesla's suffered little impact from the supply chain nightmares that have stalled rivals. For all his annoying tweets, maybe Musk should let the numbers do the talking.

When the Chips Are Down

The global shortage of semiconductor chips has been straining the production of everything from microwaves to game consoles for more than a year now. But in the auto industry, things are only getting worse. In May, AlixPartners forecast that carmakers would produce 3.9 million fewer vehicles this year due to the dip in chips. But the outlook has only gotten gloomier, with a 7.7 million-car shortfall now projected, resulting in a $270 billion hit.

Numbers from Tesla's rivals underscore just how impressive the EV giant's latest delivery figures are:

  • General Motors said Friday that it sold 446,997 vehicles in the US in the third quarter, down 33% from the same period last year. Stellantis, which used to be Fiat Chrysler, had an 18% drop in Stateside sales.
  • The overwhelming majority of Tesla's deliveries, 96%, were of the company's newer Model 3 sedan and Model Y crossover. All told, the company shipped 64% more vehicles than during last year's third quarter.

"Taking a step back, with the chip shortage a major overhang on the auto space and logistical issues globally, these delivery numbers were 'eye popping'" wrote Wedbush Securities analysts Daniel Ives and John Katsingris in an investor's note.

How They Did It: While many major automakers have temporarily closed plants because they can't get enough of the specific semiconductors their cars need, Tesla's engineers wrote new firmware that allowed them to sub in alternative chips, and thus source more from suppliers.

None

Related Articles

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.