Falling Wait Times After Shanghai Upgrade is a ‘Scary Thought’ for Tesla’s Peers – Analyst

By Senad Karaahmetovic

A Piper Sandler analyst took note of the falling delivery wait times in regions that are supplied by Tesla’s Shanghai factory.

Tesla (NASDAQ:) managed to produce nearly 77,000 electric vehicle (EV) units in August, a record production that was driven by the recent upgrade. The analyst sees even higher monthly production totals in the coming months.

“As production ramps and wait times fall, we think Tesla will remain singularly capable of quickly meeting consumer EV demand at palatable price points. While other brands struggle to ramp production, Tesla will (presumably) start cutting prices, thereby boosting market share at everyone else’s expense,” he said in a client note.

While the output is surging, the margin expansion is likely to get capped by price cuts. Hence, investors shouldn’t expect gross margins to “sustainably exceed 30%” like they did in the second half of the last year and early 2022, the analyst added.

“If Tesla’s upstream supply bottlenecks truly are breaking, we think it’s a scary prospect for other brands,” he concluded.

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