Tesla sales finished 2021 with a record-breaking performance in the 4th quarter. As a result, the electric vehicle manufacturer reported its highest sales in the fourth quarter as well as the entire year.
Tesla Sales Finish 2021 In Record Fashion
Even as most automobile manufacturers reported declines in sales due to computer part shortages, Tesla bucked the industry trend. It posted record sales in the fourth quarter, registering a 71% gain compared to a year earlier.
Tesla sold 308,600 vehicles in the period, which pushed its 2021 total to 936,000. This means that Tesla sales in 2021 are 87% higher than its 2020 totals. It also meant Tesla sales eclipsed Wall Street predictions of 900,000 vehicles.
Even analysts expressed surprise that Tesla managed to generate stronger numbers. Dan Ives, Wedbush Securities analyst, said Tesla overcame a problem other automakers didn’t.
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Given the chip shortage affecting supply and logistics globally, “these delivery numbers were jaw-dropping,” he said. Ives also reminded investors that Wall Street only predicted Tesla sales to reach 265,000 units.
Achieving this target would mean not hitting its total 2021 target of 900,000. However, by clearing the 900,000 mark, Tesla gave the “best case number in the eyes of the street.”
Other Automakers Expected to Report Decline in Sales
Meanwhile, Wall Street expects other automakers to report a reduction in fourth-quarter sales. Major US automakers will report their numbers this week.
The difference between their numbers and Tesla’s is that the latter only reports global sales. However, it wouldn’t change anything. Industrywide, global auto sales are seen to decline in the fourth quarter.
Industry watcher Cox Automotive predicts that overall US fourth-quarter sales will go down 24%. This is mainly due to the shortage of computer chips that power and control modern vehicles.
The global supply crunch of chips led many manufacturers to reduce their manufacturing. In some cases, plants temporarily shut down to prevent idling. As a result, new car inventories went down.
Consequently, car prices went up as demand outstripped supply. “The industry ran out of vehicles, and sales stalled in the second half,” said Charlie Chesbrough, chief economist for Cox Automotive.
“Total sales in the second half of 2021 were the slowest in a decade. Demand is healthy, but supply and production disruptions kept the industry in check. You can’t sell what you don’t have,” he added.
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Tesla Sales Impressive Given Heightened Competition
Not surprisingly, Tesla also dealt with its own chip shortage issues during the year. However, the company managed to get around the problem in order to churn a record number of cars.
Tesla sales numbers become more impressive when you factor in increased competition from traditional automakers. Ford managed to snag 25,000 orders of its Mustang Mach-E in 2021.
Other players also joined the crowding market. Lucid Motors and Rivian rolled out their new electric vehicles this year. Lucid snagged Car of the Year honors while Rivian did the same for its truck.
The heightened competition might signal a decline in Tesla sales in the near future. However, the global demand for EVs is growing fast.
This means the market can likely accommodate new players without eating into Tesla’s space. “While there are many competitors in the EV space, Tesla continues to dominate market share,” Ives said.
Watch the Tesla Daily video analyzing Tesla’s amazing Q4 delivery report:
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