What chip shortage? Tesla has record sales in the fourth quarter and all year

The strong fourth quarter with 308,600 vehicles gave Tesla a full-year sales of 936,000, up 87% from the total in 2020, and over the 900,000 mark that had been the goal set by many analysts.

“Taking a step back, with the chip shortage, a large overhang in the automotive field and logistics problems globally, these delivery figures were falling,” said Dan Ives, an analyst at Wedbush Securities, in a note to customers on Sunday. He said Wall Street forecasts of 265,000 Tesla sales in the fourth quarter would have taken full-year sales to 892,000. The sales target of 900,000 that Tesla easily cleared was a “best case number in the eyes of the street”, according to Ives.

Other automakers are all expected to report reduced sales in the fourth quarter when they release U.S. numbers this coming week. Tesla only reports global sales, but in the entire industry, global car sales are expected to be largely lower in the fourth quarter.

Cox Automotive estimates that total sales in the fourth quarter in the US will fall by 24% due to a lack of computer chips which led to the factories closing temporarily, limiting the stock of vehicles in dealers and increasing car prices to record levels.

“The industry ran out of vehicles, and sales stopped in the second half of the year,” said Charlie Chesbrough, chief economist at Cox Automotive. “Total sales in the second half of 2021 were the slowest in a decade. Demand is healthy, but supply and production disruptions kept the industry in check. You can not sell what you do not have.”

Tesla had its own problems with chip shortages during the year, but managed to deal with them. The EV manufacturer’s performance was more impressive considering that it faces increased competition from traditional car manufacturers who now offer more electric car models.
For example, the Ford Mustang Mach-E had sales of nearly 25,000 cars in the United States through November the first year on the market. Ford recently announced plans to triple production to meet demand. There are also new EV car manufacturers now selling vehicles, including Lucid and Rivian, both of which recently won MotorTrends car and truck awards of the year.

So while Telsa’s share of the electric car market may fall somewhat in the face of new competition, demand for electric cars is growing even faster, which means that Tesla can continue to report strong growth.

“Although there are many competitors in the electric car area, Tesla continues to dominate market share, which is also evident this quarter as they fight through the chip shortage,” said Ives.

The next Tesla turns out to be hard to find

Tesla has predicted that with new factories near Austin, Texas and Berlin set to start full-scale production in 2022, it should have annual global sales growth of 50% or better for at least the next few years.

Investors have rewarded Tesla, raising its share price by 52% in 2021. Although modest compared to 743% profit margins achieved in 2020, it was still better than most carmakers, including most other EV companies. And that was enough to give Tesla a market value greater than the overall value of the 12 largest global automakers, and to make it just the sixth company ever to be worth more than $ 1 trillion.

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