Towards the end of 2022 and through the first quarter of 2023, the critics were out in full force against Tesla (TSLA 8.04%) and its potentially slowing U.S. demand. In fairness, for about 12 months the electric vehicle (EV) maker had missed sales growth estimates and was slashing prices.
But if you think Tesla is slowing down, think again. Below is a chart along with some figures which show it has regained some momentum recently.
By the numbers
While we won't see Tesla's official sales in the U.S. until its second-quarter report, recent registrations can serve as a proxy of the momentum Tesla had at the outset of the second quarter.
In April, Tesla's new registrations totaled more than 56,000, which was up from a monthly average of 51,787 in the first three months of the year. For the first four months of the year Tesla's registrations totaled nearly 212,000, which was a 52% gain compared to the prior year. Over the same four months, Tesla's Model Y crossover recorded a 99% increase in new registrations compared to the prior year.
Overall, Tesla's market share of new EV registrations increased 50 basis points to 60.8 % in April compared to the first quarter. Here's a look at Tesla's dominance of the top EV models by new-vehicle registrations for the first four months of the year.
Image: by author. Information: from Experian.
What does this mean?
Tesla's numbers are solid for April, and gaining momentum, but does that mean the EV maker is poised to top estimates for the second quarter? Unfortunately, these figures don't necessarily mean that, especially since they only offer a glimpse at the first month of the second quarter.
But this does mean that Tesla's momentum for new-vehicle registrations, and likely sales, gained pace in April, and that price cuts were having a positive impact.
Further, Tesla historically has offered some incentives during the last month of each quarter to help boost sales. The company recently marked discounts as high as $7,500 on high-end Model S sedans and Model X crossovers, and free use of its Supercharging network for three years. Tesla is also offering varied discounts on Model 3 if buyers take delivery before June 30th.
As you can see in the chart below, as the concern grew regarding Tesla's slowing demand, the stock tanked toward the end of 2022, before rebounding into April's momentum gain.
Bottom line
Tesla CEO Elon Musk has said earlier this year that management is willing to sacrifice some profit to boost volume, with its annual global sales growth target at 50%. So far, what we know is that Tesla regained momentum in April and is making a quarter-end sales push.
While Tesla will likely eventually give up some market share to increasing competition, it appears that the company's price cuts and other incentives are doing exactly what management desired: regain momentum. That's exactly where Tesla wants to be right now.
