GM has repaired more than 11,000 Teslas since 2021
In an ironic twist, Tesla’s soaring popularity has helped a repair shop that’s been around for over a century. During General Motors Investor Day, the company’s President, Mark Reuss, said, “That’s a growing business for us. I gotta say it’s a new business,” according to Barrons. He was referring to servicing Teslas at GM facilities. The car company, which has been around since 1908, has repaired more than 11,000 Teslas since 2021 in the United States.
While not happy to be losing the business on the service side, Tesla must be relieved that its owners have access to repairs at a company that has thousands of service centers across the country. Tesla has increased production, getting more of its in-demand vehicles on the road; however, it takes much longer to have facilities built and employees trained to service these vehicles.
More Teslas Will Need Service
Recently, internal documents showed that the company was going to introduce a process allowing salvaged Tesla to be recertified and allowed back on the Supercharger grid. That may increase the number of Teslas that need to be worked on. Improvements to service have been on Tesla’s radar for some time. Last year, Musk said that the company was expediting service center openings to keep up with the exploding demand for the product.
Musk Was Focused on Service
In September, Elon Musk said that he was focused on improving service. A Twitter user complained about a recent service appointment being canceled on short notice. Musk responded: Note, I am putting a lot of time personally into advancing Tesla service to make it awesome. Hopefully, this is starting to be felt by Tesla owners.
The user also pointed out that Tesla can charge $100 for canceling an appointment with less than 24 hours' notice, but there was no penalty when the company cancels with short notice. Musk tweeted: You’re right, we should credit Tesla owners $100 if we change appointments with less than 24 hours notice. Should be reciprocal. On June 4, 2022, he tweeted: Working on Tesla North American service. Goal is 2/3 of cars receive same-day service, no wait.
But since those tweets, Musk has had a lot of attention taken to running his new company - Twitter. It's unclear how long he will be running Twitter or when his full attention will return to Tesla and improving service.
While more facilities have opened, many Tesla owners are clearly finding it more convenient to go to the neighborhood GM dealership. This ironic twist may provide some short-term relief. Still, Tesla must continue building and staffing more service centers to keep owners happy and persuade prospective buyers to consider the electric car pioneer when purchasing their next vehicle.
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Tesla's fourth quarter and 2022 earnings call with investors was mostly good news unless you were planning to drive a Cybertruck soon. While company executives eagerly jumped on every question asked by investors, there was a noticeable pause when a point-blank question was asked about Cybertruck's mid-year production date.
Elon Musk responded "um, we do expect production to start, I don't know, maybe sometime this summer. But I always like to try to downplay the start of production because the start of production is always very slow. It increases exponentially, but it's always very slow at first. So I wouldn't put too much thought in start of production."
Volume Production Next Year
If the millions of people with Cybertruck reservations were in attendance, you might have felt the air leave the room. The previous belief was mass production would start by the end of 2023. There may be some stainless-steel beauties on the road by then, but only a few. "It's kind of when does volume production actually happen, and that's next year," said Musk.
Perhaps sensing some disappointed buyers, Lars Moravy, Tesla's Vice President of Vehicle Engineering added, "(I'd) like just to emphasize on that, we've started installation of all the production equipment here in Giga Texas, castings, general assembly, body shops. We built all our beta vehicles, some more coming still in the next month, but as you said, the ramp will really come 2024."
The Cybertruck Will be Elon's Next Car
Cybertruck was originally announced in 2019 at the memorable event that included the unbreakable armor glass smashing. Musk was wearing the smashed glass Cybertruck t-shirt while taking questions from investors. While the wait continues, he is adamant that it will be worth it, "So it's an incredible product. I can't wait to drive it personally. It will be the car that I drive every day… it's just one of those products that only comes along once in a while, and it's really special."
The original release deadline was set for 2021. However, the production date has been delayed due to unforeseen circumstances, like a global pandemic. Nevertheless, it is a positive sign that beta vehicles have been produced. Images of what appears to be a Cybertruck were leaked a few months ago.
Recently, chief designer Franz von Holzhausen did confirm that the Cybertruck was ready for production, but it's a work in progress. Every Tesla beta product gets thoroughly examined and meticulously reviewed before the next step. But at least it's a step in the right direction.
Tesla set new records in production and deliveries while beating analyst expectations.
Tesla published their Q4 2022 and full-year financial results, setting new records in production and deliveries while beating analyst expectations. Tesla’s annual profit rose to $12.6 billion in 2022, from $5.5 billion in 2021. Annual revenue rose to $81.5 billion, from $53.8 billion the year prior. Tesla reported fourth-quarter revenue of $24.32 billion beating analysts' $24.07 billion estimate. The automaker also reported earnings per share of $1.19 beating analysts' $1.12 estimate.
Tesla’s stock rose more than 5% in after-hours trading following the earnings release and surged more than 10% the next day.
Tesla's Q4 2022 revenue set a new record for the company, up 59% from a year earlier. In addition to automotive revenue of $21.3 billion, Tesla recognized $324 million of deferred revenue from the company’s driver assistance systems.
FSD Beta Numbers
Tesla reported that 90 million miles have now been driven with FSD Beta, up from 58 million miles in the previous quarter. The company also confirmed that they have about 400,000 FSD Beta users in North America, a sizeable increase since the last report. With such a steep increase in miles driven and FSD Beta becoming widely available in North America, Tesla is making significant progress with its autonomous driving software.
In late 2022 and into this year, Tesla began cutting prices on its cars globally. Elon spoke about how recent price cuts have fueled a surge in demand for Tesla: “Thus far in January we’ve seen the strongest orders year-to-date than ever in our history. We’re currently seeing orders of almost twice the rate of production.” He added: “These price changes really make a difference for the average consumer.” Tesla acknowledges that average sales prices have to decrease over time because affordability is part of Tesla's mission to grow into a company that sells multiple millions of cars annually.
Price cuts will impact profitability, but margins should remain healthy, Tesla CFO Zach Kirkhorn affirmed. Tesla has wider operating margins than the industry average, which allows them to make such price cuts.
Elon issued an uncertain forecast for 2023, saying Tesla planned on 1.8 million vehicles for the year without specifying whether that was a target for production or deliveries. If the company were to deliver 1.8 million vehicles in 2023, that would result in 37% annual growth.
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