Demand has always been a strength for Tesla (TSLA 1.85%). For most of the company's history, orders for its vehicles have been well ahead of the company's ability to supply them. This was the case in 2021, and it's looking like it's continuing into 2022. Indeed, there's evidence that demand may be growing faster than production recently -- even in the face of numerous price hikes for Tesla vehicles.
"Many Tesla models are now sold out until 2023," reported electric car website Electrek on Friday. A quick visit to the company's website confirms this is the case.
Tesla Model S. Image source: Tesla.
Good luck getting a Tesla soon
Delivery estimates for new orders of the cheapest Model Y version in the United States are now pushed out to a timeframe of between January 2023 and April 2023; base versions of the Model S are now estimated to deliver between November 2022 and January 2023; and the most affordable version of the Model X isn't anticipated to deliver to customers until sometime between April and July of next year. Of course, some versions of these vehicles with more add-ons and higher price tags will deliver sooner.
Fortunately, the base version of the Model 3 still delivers in 2022. But customers ordering the vehicle now won't take delivery until sometime between July and September, Tesla estimates.
What we know about production and demand
It's not like production is hurting. Tesla had said that it finished the year with a strong production rate of 1.22 million vehicles annually in Q4. This was up from about a rate of about one million annually at the end of the prior quarter. So production rates do seem to be improving. Further, Tesla guided for full-year 2022 deliveries to grow by about 50% compares to 2021 levels, indicating that management expected continued manufacturing improvement this year. So if investors consider this backdrop from management alongside growing timeframes for deliveries of new vehicles, it seems to suggest that demand is truly through the roof for Tesla's vehicles.
Tesla has been quite bullish about the demand story for its vehicles recently. In the company's third-quarter 2021 quarterly update, management said that there is a "structural shift" happening in electric vehicle (EV) demand as more Tesla vehicles are on the road and more Tesla owners are helping others see the viability of a fully electric vehicle.
Model S. Image source: Tesla.
Responding to surging demand, Tesla said in its fourth-quarter update that increasing production substantially was a priority in 2022. It plans to do this by maximizing output at existing factories in California and Shanghai and by bringing online entirely new factories in Austin and Berlin. In fact, deliveries from the company's new factory in Germany just started.
"We believe competitiveness in the EV market will be determined by the ability to add capacity across the supply chain and ramp production," Tesla said in its fourth-quarter letter.
But despite the company's intense efforts to ramp up production, it apparently still can't keep up with demand.
Investors will get some insight into how well production and deliveries have been growing soon. Tesla should report first-quarter deliveries at some point during the first three days of April.
