Published on March 4th, 2020 | by Steve Hanley
March 4th, 2020 by Steve Hanley
Figures lie and liars figure. And one monthly report doth not an entire picture paint. That being said, the latest numbers from Europe and Japan suggest Tesla registrations may be in a bit of a slump. Is this FUD? Is someone cooking the books to make Tesla look bad? Let’s take a look behind the numbers to see if there are any useful conclusions we can draw.
The perhaps superficial snapshot news comes from Yahoo! Finance, based on information supplied by Bloomberg. Norway, with its aggressive EV incentives, has always been an important market for Tesla. In February 2019, 1,016 Tesla automobiles were registered in that country. A year later, in February 2020, just 83 Teslas were registered in Norway. There are two main potential reasons for that — one good and one bad.
No matter how you slice it, 1,016 to 83 is a huge drop, which leads some observers to question whether the emergence of new competitors from Volvo, Volkswagen, Audi, and others have put a damper on demand for Tesla cars. For more detailed information about the Norwegian EV market, see this chart from Elbil Statistics. It shows 1,133 Audi e-tron deliveries in February, making it the top selling EV in Norway for that month and far outpacing any other electric car.
Tesla sales in the Netherlands were also down year over year, by 43%. So, counter to some previous months, the argument cannot be made that Tesla deliveries shifted from Norway to the Netherlands.
We know that Tesla has a way of adjusting its deliveries so customers can take advantage of national and local sales incentives. For example, it appears the first (or at least some of the first) Model Y deliveries will take place in Canada, where sales incentives are still available for Tesla buyers. We also know Tesla has a habit of backloading its delivery process to increase the number of cars sold in the last month of a quarter. It is entirely possible that sales in Norway and the Netherlands have been constrained more by supply than demand. That brings us to the best possible explanation.
It may be that demand for Tesla vehicles has been so strong in the United States and Canada that deliveries to Europe have simply been pushed back much more than last year. Recall, also, that the US federal tax credit for Tesla buyers got cut in half on January 1, 2019, which everyone knew would dampen US demand. Further, Model 3 deliveries to Europe were just beginning. So, Tesla poured a lot of vehicles into Europe early in 2019. If demand is very strong in North America right now, the low number of registrations in Europe so far in 2020 could be indicative of a positive thing for the company.
Japanese Market Is A Tough Nut To Crack
Yahoo! Finance also reports that Tesla is finding it hard to break into the Japanese market. In 2019, just 1,378 electric vehicles were imported into Japan. 90% of them were Teslas, but that still means just a little over 1,000 cars for the entire year.
This should come as no surprise. American manufacturers have complained long and loud for decades that Japan sets up artificial trade barriers that make it hard to sell their cars there. In the ’90s, Saturn announced with great fanfare that its was exporting its US-made cars to Japan, but never managed to sell more than a few hundred cars there despite a concerted marketing effort.
Some might say that bulky American cars are not what Japanese customers want or need in order to negotiate the streets in their congested cities, just as they are not suitable to the narrow streets found in most European cities. There’s a reason why the Japanese auto industry produces so many small kei class cars like the Mitsubishi i-MiEV and its gasoline cousins. They are diminutive by American standards, with engines restricted to 600 cc or less.
Nevertheless, with the impact of the coronavirus slowing car sales dramatically in China, Tesla might like to see a few more cars being delivered to Europe and Japan to boost its first quarter numbers, but that seems unlikely to happen given the most recent sales trends.
Is Tesla worried about competitors taking market share away from it? Not likely. And investors are still driving the company’s share price back to stratospheric highs after last week’s financial meltdown. We will have a clearer idea of Tesla’s strength in the marketplace once Q1 numbers are in.
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