Tesla avoided the chip issues that plagued GM and other automakers. Here’s how.

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is growing as other automakers struggle to build cars due to a shortage of microchips. How to come?

The data is easy to grasp, although the reason for the results remains a mystery.


General Motors

(ticker: GM) U.S. dealerships delivered 446,997 vehicles to the United States in the third quarter of 2021, down from 218,195 units, or nearly 33%. Tesla (TSLA) delivered 241,300 vehicles in the third quarter, more than investors expected and up about 73% from the third quarter of 2020.

Tesla investors expected growth and got it. For GM, it was a steep fall, but not unexpected. GM warned investors in the middle of the quarter that unit shipments would be down by about 200,000 units. The chip shortage is the reason GM management saw the decline coming. A global automotive semiconductor shortage has rocked the industry all year round and will eventually reduce global light vehicle production by around 5-6 million units.

For Tesla, the third quarter was another record. The company delivered around 627,000 vehicles in the first three quarters of the year, up almost 100% from the first three quarters of 2020. Tesla is essentially operating at full capacity while other automakers are closing their operations. factories due to lack of parts.

Demand, earnings and industry size could be three reasons for the third quarter conundrum.

The demand for all cars in 2021 is strong, but the demand for electric vehicles in the world is exceptional. Chinese electric vehicle sales through August rose about 220% year-over-year, according to Citi analyst Jeff Chung. And electric vehicles tend to be more expensive vehicles than traditional cars in comparable vehicle segments. In addition, electric vehicles still represent only a small part of the global total of new vehicle sales. Taken together, this could be the reason chipmakers are sending more chips, relatively Tesla’s way. It is simply easier and more cost effective to supply manufacturers of electric vehicles.

There are a few other reasons, however.

The supply chain is one of them. “Tesla has a more efficient supply chain,” Wedbush analyst Dan Ives said. that of Barron. Additionally, Ives points out that Tesla manufactures vehicles at only two factories at the moment: Fremont, California and Shanghai, China. He thinks Tesla has a better chance of sourcing chips from China. ”


Ford

and GM, among others, have very complex supply chains that put them in the eye of the storm, ”he explains.

Geography is another. Chinese electric vehicle manufacturers had a good September. The chip shortage in China was not as acute as it had been in previous months.


NIO

(NIO),


XPeng

(XPEV), and


Li Auto

(LI) —three Chinese electric vehicle manufacturers listed in the United States — delivered more than 28,000 vehicles in September. That’s a record month for the three-plus, up from around 10,000 vehicles in February 2021, when the Chinese Lunar New Year and chip shortage took a toll on results.

China-based production appears to have helped Tesla. And more plants and more complexity could harm others. But the chip shortage appears to be affecting different carmakers at different times as chipmakers struggle to fill orders. Timing is the last potential reason.

GM had a bad quarter, but the others were OK. In the United States, sales of the Lexus division of Toyota, Hyundai,


Kia
,


Bmw
,

and a handful of other automakers were all up year over year, said Benchmark analyst Mike Ward Barron “Despite the market [being] down 13%.

The good news for GM and the rest is that it looks like things are getting better. “The semiconductor supply disruptions that affected our wholesale and third quarter customer shipments are improving,” said Steve Carlisle, executive vice president and president of GM North America, in a press release of the society. “As we look into the fourth quarter, a steady stream of vehicles held in factories will continue to be distributed to dealerships, we are restarting production in major crossover and car factories, and we look forward to a more favorable environment. ‘more stable operation until the fall. “

More stable production is what all auto investors are also hoping for. Tesla investors, however, will be looking for more growth. Analysts are currently forecasting around 230,000 Tesla vehicle deliveries for the last three months of the year. After the third quarter figure, Tesla investors will expect more than that, a chip shortage or no chip shortage at all.

Tesla’s stock is up after reporting heavy deliveries on Saturday. The shares are near $ 800 in pre-market trading, up about 3%.


S&P 500

and


Dow Jones Industrial Average

futures are both down about 0.4%.

Write to Al Root at [email protected]


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