Tesla's Model Y emerged as the best-selling vehicle in California's new vehicle market in Q1 2023, marking a significant milestone in the increasing shift toward electric vehicles. However, this achievement comes at a cost to traditional car dealerships, which lost an estimated $910 million in potential profit in 2022 due to the rise of Tesla and other direct-to-consumer manufacturers.
Tesla Model Y Leads the Pack in California's New Vehicle Market
The Model Y, a luxury compact crossover electric SUV, accounted for a staggering 64.5% of Luxury Compact SUV sales in the state. Despite supply chain issues and limited vehicle inventories impacting the sales results of many models, the Tesla Model Y has managed to claim a substantial market share, underlining the growing popularity of electric vehicles among California’s consumers.
Traditional Dealerships Feel the $910M Pinch as D2C Sales Skyrocket
According to a recent report by Automotive News, the direct-to-consumer sales model adopted by Tesla, Rivian, and Lucid has significantly disrupted traditional dealerships. Out of the 193,707 direct-to-consumer EV sales, Tesla vehicles constituted a whopping 97.1%, resulting in a gross profit loss of roughly $700,000 per dealer and a $910 million loss for dealers cumulatively.
The most prominent losers in this transition were the state’s luxury brands, especially those currently lacking EV offerings. The higher average sales prices of EVs from Tesla, Rivian, and Lucid meant these losses were felt most acutely by luxury dealerships.
Future Market Trends: Intense Competition and Emerging Opportunities
The landscape of California's EV market could become more competitive. As traditional automakers ramp up their EV offerings, they will be vying for a piece of the pie in a market that has seen a surge in new vehicle registrations, especially in the luxury SUV and EV segments.
However, Tesla's significant profit margin lead over its competitors could still pose a substantial challenge for traditional dealerships, making price competition a tough battle.
Tesla's impressive performance in California's new vehicle market signals a significant shift in consumer preferences and a major disruption in traditional car dealership models. The future will likely see more EVs, more competition, and perhaps more opportunities for those who can keep up with the rapid pace of change in the automotive industry.
After a post on X, Tesla has confirmed that it recently exported its 1 millionth car from Giga Shanghai. That’s a massive number of vehicles from a factory that only opened in December 2019.
Since Q3 2021, Giga Shanghai has been responsible for producing over 50% of global EV production – with the single exception of Q2 2022 – where production fell to about 40% while the factory was retooling. That’s a jaw-dropping figure for a single factory.
1 Million Exports
Giga Shanghai produces Teslas for practically the entire world, including the European, Australian, Chinese, and other Southeast Asian markets. For now, it also produces cars for Canada; however, an upcoming tariff could change this.
Giga Shanghai also celebrated the shipping of 100,000 vehicles to Australia with the 1 million vehicles exported mark. While the majority of vehicles end up in Europe, Australia and Southeast Asia are still massive markets for Tesla.
Going forward, Giga Shanghai, with its continued expansions, will be at or above 1 million vehicles produced per year. A good chunk of these vehicles stay within China, while the rest are exported. Tesla sells on average 40 to 80,000 cars per month in China, depending on the season, with an average of 90,000 cars produced per month in 2024 so far.
Automated Production
This is all thanks to Giga Shanghai’s 95% automated production line. Giga Shanghai is likely one of the most automated and advanced factories in the world, a testament to Tesla’s manufacturing and engineering expertise. Giga Shanghai produces one vehicle every 40 seconds.
We’re looking forward to seeing how Tesla’s expansions and factory innovations continue in the coming months and years.
Giga Shanghai operates a 95% automated production line, enabling a cycle time of less than 40 seconds! From taking 2.5 years for the first million cars to be produced, the second million was done in just 12 months 🚘🪄 pic.twitter.com/IF1w27AFPr
Tesla’s last app update, version 4.37.1, introduces support for critical alerts on the iPhone. These alerts are designed for emergency situations and will override standard notification settings, including the mute switch, Focus modes, and Do Not Disturb. This ensures that owners are notified when immediate action is required, even if their phone is set to silent.
How to Enable Critical Alerts
Activate Dog Mode: Open the Tesla app and turn on Dog Mode.
Main App Screen: After activating Dog Mode, go back to the main section of the app.
Enable Critical Alerts: A new option called Critical Alerts will appear under Live Camera and the quick action icons (Tip: You can add up to 5 quick actions). It’ll state, “Grant permissions to receive critical notifications.” Tap it, and you’ll see a system dialog asking for permission to allow critical alerts for the Tesla app.
Confirm Permission: Choose to allow the Tesla app to send critical notifications, which will grant the app special privileges for sending urgent alerts.
This new feature is likely intended for situations where Dog Mode needs to be turned off unexpectedly. For example, if the vehicle’s battery drops below 20% or if the temperature inside the cabin rises or falls drastically outside of your set temperature, the Tesla app is expected to send a critical alert to the owner, ensuring they are informed right away.
What Are Critical Alerts?
Critical Alerts are a type of iOS notification available only to approved apps, which must meet specific criteria set by Apple. These alerts are designed to be used in emergencies and bypass all standard notification restrictions. This means that regardless of whether your phone is silenced or in Do Not Disturb mode, the alert will play a sound and appear prominently.
By adding support for Critical Alerts, Tesla is prioritizing the safety of pets who may be left inside the vehicle with the expectation that Dog Mode will keep conditions safe. This change makes the app more reliable for alerting owners when immediate attention is needed, ensuring they are always kept informed—even when their phone’s settings would typically prevent other notifications from coming through.
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