Tesla announced its Q3 vehicle production and delivery numbers today, and The Verge noted that Tesla’s competitors aren’t faring as well as Tesla this quarter. The article pointed out that in 2019, Tesla sold a total of 367,500 vehicles, and it just sold 241,300 in the 3rd quarter of 2021. Tesla’s exponential growth continues. Tesla also sold 102,000 more vehicles in this Q3 compared to last year’s Q3. Also, the article highlighted that Tesla was successful in the face of the challenges that have impairing other automakers.
Major automakers, except Tesla, saw notable drops in sales during Q3. General Motors sold more vehicles than Tesla this quarter, but its sales were down 33% (446,997 vehicles in Q3 2021 compared to 665,192 vehicles in Q3 2020). Steve Carlisle, executive vice president and president of GM North America, said that the impacts were caused by the semiconductor supply disruptions.
“The semiconductor supply disruptions that impacted our third-quarter wholesale and customer deliveries are improving. As we look to the fourth quarter, a steady flow of vehicles held at plants will continue to be released to dealers, we are restarting production at key crossover and car plants, and we look forward to a more stable operating environment through the fall.”
This was somewhat expected considering GM had to halt production in almost all of its North American plants on Labor Day due to the chip shortage. Regarding that issue, Dan Flores, a GM spokesperson, told USA Today:
“All the announcements we made today are related to the chips shortage, the only plant down that’s not related to that, is Orion Assembly.” Orion Assembly manufactures GM’s Chevy Bolt electric vehicle, which was recently recalled due to fire risks. Flores said that GM is managing the situation “on a day-to-day basis.”
Edmunds shared a few days ago that its forecast of just under 3.5 million new vehicles being sold in the U.S for the third quarter of 2021 reflected a 13% decrease from Q3 2020. And it also reflected a 22.7% decrease compared to the second quarter of 2021. Edmonds’ executive director of insights, Jessica Caldwell, said:
“New vehicle sales in the third quarter have been a direct reflection of the worsening chipset and inventory situation. Although consumer demand continues to run high, sales have continued to slide downward each month because there simply aren’t enough of the vehicles that shoppers want.
“The entire U.S. auto industry — including the Asian manufacturers, which were doing a bit better than their domestic counterparts until recently — is in an incredibly volatile position right now and we are seeing inflated retail prices across the board. It’s growing extraordinarily hard to predict who will come out on top heading into the rest of the year, as every automaker is at the mercy of its suppliers and challenged logistics around the globe.”
The chip shortage, which is what hurt GM this quarter, is affecting the automotive industry across the board. Yahoo! Finance said that the industry is expected to lose $210 billion globally in revenue this year. The article noted that other automakers were having similar issues. Ford had to temporarily close its Kansas City plant, which builds F-150 pickup trucks, due to the chip shortage.
Tesla has been able to avoid some of the problems GM and others have been having by rewriting its vehicle software to support alternative chips. Elon Musk brought this up during the Q2 2021 earnings call. He explained that the global chip shortage was a serious situation and that Tesla’s growth rates would be determined by the slowest part of its supply chain, with chips dominating that role in 2021.
“The chip supply is fundamentally the governing factor on our output.
“It is difficult for us to say how long this will last because we don’t have — this is out of our control essentially. It does seem like it’s getting better, but it’s hard to predict. So, in fact, even achieving the output that we did achieve was only due to an immense effort from people within Tesla. We were able to substitute alternative chips and then write the firmware in a matter of weeks.
“It’s not just a matter of swapping out a chip. You also have to rewrite the software. So it was an incredibly intense effort of planning new chips, writing new firmware, integrating it to the vehicle, and testing it in order to maintain production. And I’d also like to thank our suppliers who work with us.
“And there have been many calls midnight, 1:00 a.m., just with suppliers that — in resolving a lot of the shortages. So thanks very much to our suppliers.”
And thanks very much to our suppliers & logistics partners for coming through despite great difficulties!
— Elon Musk (@elonmusk) October 2, 2021