Last month, Tesla saw a significant increase in vehicle deliveries in Turkey and Norway, selling ten times more cars in these countries compared to Germany, despite their smaller size in the European economy. This surge in sales helped Tesla meet their Q2 delivery targets, but also raised concerns about potential overproduction at plants like the gigafactory near Berlin. Investors are puzzled by the sudden appearance of tens of thousands of cars, speculating that smaller markets might be absorbing excess inventory from Tesla’s Berlin factory. The unexpected spike in deliveries has led to questions about the true demand for Tesla vehicles, particularly in markets not traditionally known for high sales volume. Analysts are cautiously optimistic about the positive reception of these deliveries but are uncertain about the specific regions where the sales occurred. Notably, Turkey reported a significant increase in Tesla sales in June, capturing a large market share and setting new records for electric vehicle penetration. Norway also saw strong Tesla sales, with the brand accounting for a third of all car sales in the country last month. The remarkable performance in these markets suggests they may be absorbing surplus inventory from Tesla’s Berlin factory amidst declining demand in other European regions.
A strategy focused on targeting smaller markets may lead to challenges in maintaining high production volumes consistently. For instance, as countries like Norway reach market saturation quickly, sustaining demand could become difficult for Tesla. This could potentially result in production halts at the Berlin factory due to lack of demand.
Similarly, in more established markets like the United States, the outlook is also concerning. Analysts note a significant decline in Tesla’s market share in the U.S., with the only saving grace being their limited exposure to tariff risks as their vehicles are manufactured domestically.
This article was initially published on Fortune.com.
