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Elon Musk Urges Tesla Employees To Reduce Cost of Vehicle Deliveries

Elon Musk Urges Tesla Employees To Reduce Cost of Vehicle Deliveries

Amid ongoing port constraints and rising shipping costs, Tesla CEO Elon Musk urged employees Friday, in a company-wide email obtained by CNBC, to look for ways to reduce the cost of delivering electric vehicles to customers, rather than rushing orders out last-minute to hit its end of quarter sales goals.

This year, Tesla has struggled to deliver new cars to customers in the U.S. in line with originally promised date ranges. As CNBC previously reported, some Tesla customers here experienced delivery delays of months, leaving them paying out of pocket for rentals and ride-hailing apps, and needing to re-apply for loans due to slipped deadlines.

Tesla is not alone in leaving customers waiting longer than they had hoped for their new, fully electric cars. Last week, for example, newly public competitor Rivian Automotive notified people who had reserved their R1S, a sport utility vehicle, of delivery delays.

Still, sales have grown this year for Tesla seemingly unbowed by unpredictable delivery dates.

Vehicle deliveries, which are the closest approximation to sales reported by Elon Musk’s electric vehicle and renewable energy business, amounted to about 500,000 total in 2020. During the first three quarters of 2021, Tesla had already reported deliveries of 627,350 vehicles.

Since the start of 2021, the company has not provided a clear target for 2021 vehicle deliveries. But Tesla has reiterated its loose guidance for “50% average annual growth in vehicle deliveries” over a multiyear horizon, including on its third-quarter earnings call.

JL Warren Capital’s CEO and Head of Research, Junheng Li, wrote in a note to investors last week that she expects Tesla sales to continue to rise, at least in China this quarter. “Soaring gas price benefits all new energy vehicle brands,” in the country she noted.

Some 1.3 million electric vehicles were sold in China in 2020, according to Canalys research. The firm predicted that the number would grow to 1.9 million EV sales in China by the end of this year.

China remains the world’s largest market for new cars, with strong government support for going electric.