Tesla’s July sales dropped by 60% in its third largest market, Norway. The electric car maker sold just 64 units this year compared to 160 units the company sold in July last year. But before we jump to conclusions we also need to look at the fact that Tesla’s sales in the first seven months increased by 63% this year compared to last year.
Between January 2018 and July 2018, Tesla has sold 4,110 Model S and Model X, compared to 2,520 units the company sold during the same period last year. It’s bit way too early to call out the company and say they are losing their grip in Norway’s EV market.
Tesla’s Service Capacity in Norway is not yet there to match up to its sales growth
Norway is one market where Tesla witnessed a huge spurt of growth. Tesla doubled its sales in the country in 2017 and followed it up by recording another 63% growth in the first seven months of 2018 compared to 2017. If Tesla ends up doubling its sales again in 2018 then Tesla would have moved from selling 3,481 units in 2016 to 8,460 units in 2017 to +16,000 in 2018.
Tesla was obviously not ready to handle the pace of growth as service capacity didn’t catch up to the steady increase of Teslas on Norwegian roads. Tesla CEO Elon Musk had to step in and accept that Norwegians had every right to be mad at Tesla.
Norwegians are right to be upset with Tesla. We are having trouble expanding our service facilities in Oslo especially. Can solve quickly with Tesla mobile service vans, but awaiting govt permission to do so.
— Elon Musk (@elonmusk) July 5, 2018
“They’ve hired many people already,” said Satheesh Varadharajan, head of the Tesla Owners Club Norway (TOCN), which has more than 3,000 members. “It’s not like they’re standing still. They’re pushing like crazy.” – CleanTechnica
As Tesla works over time to increase its service capacity in Norway and reduce wait times, the company may have chosen to divert deliveries from Norway to other countries. Why add more cars into the mix and further stress the already stretched service footprint?
Tesla has capped production of Model S and Model X at 100,000 units for 2018. This allows some room for Tesla to prioritize deliveries in regions as and when it chooses. Not an ideal place to be from a customer point of view, but that’s something Tesla has to accept as a shortcoming for being a small auto manufacturer trying to scale.
The second factor to note here is Tesla always starts slow during the first month of the quarter and finishes on a high during the last month. I still have no clue why they have to do it that way, so please share your thoughts in the comments section if you have an opinion in this.
Tesla may be planning to recover sales in August and September and cover for its July shortfall.
But whatever the way we slice it, Tesla has plenty of work to be done in Norway. To choke a market when its absorbing sales at a tremendous rate is not a great thing to do. Neither is allowing their service capacity to get stretched, what ever the reason might be.