Media Surprised by Tesla Registrations Despite Shutdown


Everybody robbing our here today we were talking about a number of different reports on tests registrations in the united. States in the month of April and May tussle stock, despite some of these reports finished the day up one percent to nine hundred ninety one dollars, seventy nine cents that compared to the Nasdaq up zero point two percent all right so as much as I would love to skip this topic because I think a lot of us know where this is. Is Heading. Most of the Tesla headlines today are related to a Wall Street Journal article published this morning titled Quote Tessa Registrations Plunge in California data tracker, says and quote, then leading off the article with quote, registrations of newly purchased Tesla vehicles plunged critical California market over the past two months according to new data underlining the challenge chief executive Elon, Musk faces to keep investor enthusiasm that has helped propel the company's share price and quote the Wall Street Journal Journal cites data from Dominion Enterprises which apparently tracks registrations in twenty four states that make up about sixty five percents of the US market, and in those twenty four states they say that Tesla registrations declined thirty three percent to fourteen, thousand, one, hundred and fifty one vehicles during the first two months off cue to the media, then seemed to go full, shocked Pika Chew Mon and read a whole bunch of articles about this highlighting Tesla's quote, unquote plunging registrations so. So I thought had a little bit of fun with that with the today. Apologies for that, but the point here is that this should not be surprising at all. People seem to have forgotten that Tesla. Had Their factory shut down for seven weeks from late March to early May as we know. Tesla is somewhat unique in that their registration or sales, information correlates strongly to their production rather than simply being an indication of demand like we might see from. Cars we can easily see this in the inventory numbers. If we look at Tesla, they had twenty days of inventory at the end of Q. on of March that comes right from their shareholder letter, and if we look at a company like Ford, for example, they said that at the march they had one hundred days of inventory so twenty days of inventory doesn't get. Get you too far when you're factories, shut down for fifty days compared to if you had one hundred days of inventory in stock like four does according to Cox Automotive, many brands actually had more than one hundred days of inventory at the end of March including Honda, jeep, Cadillac, an Acura and many others, and then even on the low end. They have KIA as. As the lowest brand at forty three days, so Tesla's inventory is about twenty to twenty five percent of the average and half of that of the lowest other brand in the US. The other important consideration here when we look at April and May specifically for the United States is that because Tesla restarted production in early, may that only gave them a couple or A. A few weeks to be able to produce vehicles ship them over to Europe and have them delivered within Q. Two, so with that being the case, obviously a very small amount of vehicles produced in May are going to actually be allocated for the North American market, so yeah plenty of reasons for us to expect registrations to have been down year over year in April. April and May in the US definitely not shocked Pichu type of situation, even with all that being the case in the same article, The Wall Street Journal says that Dominion Research says that the industry fell forty three percent in April and may remember. They have tussled down thirty three percent, so even without much inventory, Tesla is still outperforming the broader industry. You actually interpret. Interpret this as relatively bullish report. The other thing that I want to talk about briefly is the actual number here. So they said that registrations were fourteen thousand, or so in the first two months of the quarter and remember that's four states that make up about sixty five percents of the total US auto market. Tesla probably penetrates a little bit higher in those markets. Markets, because it does include California, so if we assume that that's about seventy five percent, then that can point to a number of about eighteen thousand five hundred vehicles registered in the United States in April, and met now I'm not putting much weight into these numbers, but that number does seem extremely reasonable. We know that Tesla began the quarter with about thirty thousand vehicles. Vehicles in inventory, so if we assume about half of that inventory, or about fifteen thousand vehicles were in the United States at the end of March then for us to have eighteen thousand vehicles registered in the US in April, and may sounds like a pretty reasonable number, if tussle were to sell off some of that inventory mentor, and then we add in deliveries from. That are probably not entirely allocated for Europe as well as Mata. Why if anything I see this report? As a low weight indicator that things are roughly on track. One less thing. I wanted to point out on this. The street did run article separate from my page on this topic and I didn't really love the headline. They reach out me, gave me the opportunity to add some context, and then actually included all of my comments in the article on this

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