Tesla has started the year strong, posting record quarterly vehicle deliveries in the first quarter of 2023, with 422,875 vehicles delivered. This represents a 36% increase compared to the same period a year ago and a 4% growth from the previous quarter. The company also produced over 440,000 vehicles during this period, showcasing its ongoing expansion and manufacturing prowess.
Tesla also provided a breakdown of its production and delivery numbers by model, reporting 19,437 Model S/X vehicles produced and 10,695 delivered, and 421,371 Model 3/Y vehicles produced and 412,180 delivered.
Tesla's Financial Results for Q1 2023
Tesla will post its financial results for the first quarter of 2023 on April 19, 2023, after the market close. In addition, the company will issue a brief advisory containing a link to the Q1 2023 update, which will be available on Tesla's Investor Relations website.
Tesla management will hold a live question-and-answer webcast on that day at 4:30 p.m. Central Time (5:30 p.m. Eastern Time) to discuss the company's financial and business results and outlook. The webcast will be available on the company's website, and an archived version will be available approximately two hours after the Q&A session. Of course, as always, we will be listening in and reporting on what we hear.
Price Reduction Strategy Drives Sales
Tesla's decision to cut prices by as much as 20% in January 2023 appears to have paid off, stimulating sales and enabling the company to maintain its position as a market leader. The price reduction brought the cost of the Model Y down from $65,990 to $54,990, making it more accessible to a broader range of consumers.
Despite concerns about eroding margins and a weakening economy, Tesla's performance in the first quarter of 2023 shows that its strategy of cutting prices to boost sales has been effective.
The company's ability to ramp up production at its new factories in Texas and Berlin, as well as recover from the impact of COVID-19 lockdowns on its Chinese production, demonstrates the resilience and adaptability of the automaker. For example, Tesla's Texas factory produced 4,000 Model Y vehicles in one week, while its German plant reached a production capacity of 4,000 cars per week in late February.
Analysts Suggest Further Price Cuts May Be Necessary to Sustain Growth
Reuters quoted Barclays analyst Dan Levy who suggests that Tesla may face pressure to lower prices further as other automakers match the company's cuts and economic concerns persist. However, Tesla has not indicated whether additional price cuts are being considered.
Another factor affecting demand is the potential reduction in U.S. electric vehicle subsidies for some models starting on April 18. Tesla's price cuts in China have also ignited a price war, with Chinese rivals such as BYD and Xpeng lowering their prices to protect market share amid weaker demand.
Despite these challenges, Tesla's first-quarter delivery and production numbers for 2023 are a testament to the company's continued growth and commitment to providing affordable, sustainable transport options for consumers. As Tesla moves forward with its ambitious plans for 2023, including the goal of delivering 2 million vehicles, the company's performance in Q1 serves as a strong foundation for the rest of the year.
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For the first time in quite a while, Tesla has increased the price of one of its vehicle offerings. The Model S Long Range and the Model S Plaid have both received a hefty price increase. However, not all is bad - as Tesla also added a new benefit for buyers.
Price Increase
The price increase for the Model S is $5,000 - currently only in the United States. This price increase will likely impact other markets, including Canada, in the coming days.
The Model S Long Range now starts at $79,990, while the Model S Plaid now starts at $94,990. The Model S and Model X now have the same starting price. Interestingly, that’s also the same pricing point for the Cybertruck AWD and Cyberbeast Trimotor non-Foundation Series.
The vehicle configuration does not appear to have changed, so the new pricing is simply an increase rather than the addition or removal of features. Tesla previously cut the price of the Model S and Model X by 15% in 2023, so this could simply be an adjustment to ensure that the vehicle pricing stays in line with inflation and other factors.
Free Lifetime Supercharging
For those on the fence about ordering a Model S, Tesla has brought back Free Lifetime Supercharging when you order a new Model S on or after December 13, 2024. As always, Free Lifetime Supercharging is restricted to the buyer’s Tesla account and to that specific vehicle. It cannot be transferred to another vehicle or another owner after ownership transfer. It’s worth noting, that it also doesn’t exclude the owner from receiving Supercharger idle fees or congestion fees. There is currently no end date for this promotion.
There are currently no changes to the Model X, neither a price increase nor the addition of Lifetime Superchargering. However, when Tesla makes changes to one of their premium vehicles, it usually affects the other one as well. So be on the lookout for potential changes to the Model X offering in the coming days.
We’ve seen Tesla value Lifetime Supercharging at $5,000, so this falls in line with the price increase we’re seeing. It’s possible that Tesla will begin to bring back Lifetime Supercharging as a perk for buying into their more premium Model S and Model X cars, or this could be another temporary promotion to get buyers who are on the fence to go ahead and make their purchase while this promotion lasts.
Tesla recently showed off a demo of Optimus, its humanoid robot, walking around in moderately challenging terrain—not on a flat surface but on dirt and slopes. These things can be difficult for a humanoid robot, especially during the training cycle.
Most interestingly, Milan Kovac, VP of Engineering for Optimus, clarified what it takes to get Optimus to this stage. Let’s break down what he said.
Optimus is Blind
Optimus is getting seriously good at walking now - it can keep its balance over uneven ground - even while walking blind. Tesla is currently using just the sensors, all powered by a neural net running on the embedded computer.
Essentially, Tesla is building Optimus from the ground up, relying on as much additional data as possible while it trains vision. This is similar to how they train FSD on vehicles, using LiDAR rigs to validate the vision system’s accuracy. While Optimus doesn’t have LiDAR, it relies on all those other sensors on board, many of which will likely become simplified as vision takes over as the primary sensor.
Today, Optimus is walking blind, but it’s able to react almost instantly to changes in the terrain underneath it, even if it falls or slips.
What’s Next?
Next up, Tesla AI will be adding vision to Optimus - helping complete the neural net. Remember, Optimus runs on the same overall AI stack as FSD - in fact, Optimus uses an FSD computer and an offshoot of the FSD stack for vision-based tasks.
Milan mentions they’re planning on adding vision to help the robot plan ahead and improve its walking gait. While the zombie shuffle is iconic and a little bit amusing, getting humanoid robots to walk like humans is actually difficult.
There’s plenty more, too - including better responsiveness to velocity and direction commands and learning to fall and stand back up. Falling while protecting yourself to minimize damage is something natural to humans - but not exactly natural to something like a robot. Training it to do so is essential in keeping the robot, the environment around it, and the people it is interacting with safe.
We’re excited to see what’s coming with Optimus next because it is already getting started in some fashion in Tesla’s factories.
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