Tesla Motors Inc (TSLA) CEO Says North American Demand Starved Due To Cell Limits
Tesla Motors Inc (NASDAQ:TSLA) reported their Q3 earnings yesterday and now the stock is down -14.51% as of 10:39AM EST. The stock is down largely due to the company delivering 5,500 Model S vehicles, which was below analyst expectations. Tesla Motors Inc (NASDAQ:TSLA) CEO Elon Musk said “we really are production constrained, not demand constrained.” The main constraint on the production was cells. Musk said that car deliveries have been held back in the U.S. for deliveries to Europe.
“U.S. demand or North American demand has continued to increase. We’ve actually had to starve North American demand in order to feed Europe. We’ve had European customers that have been waiting for a long time so we’ve had to constrain deliveries to North America in order to get people their cars, in some cases for two to three years,” said Musk. “I think we could sustain 20,000 cars a year in North America and maybe more than that. But it doesn’t make sense for us to try to amplify demand if we aren’t able to deliver to that demand. That’ll just make people unhappy.” In Europe, they are seeing around 10,000 unit orders per year. Musk said that the company is laying the ground work for future demand increase. They are seeing production constraint across Asia as well. Deliveries in China are expected to start in the first quarter of 2014, likely in February.