Mid-week Auto News Update - April 19, 2023
Tesla Q1 earnings will be announced at the end of play today, and of course the session will be a newsmaker. The fact Tesla had a fantastic quarter as measured by sales volume is of little consequence, and revenue will be scrutinized, but Tesla earning calls are more often dominated by the CEO’s visions of alien dreadnaughts, grand promises of product capability, and fantastical expectations of company value. Ah, in praise of Elon Musk: He is a force.
And yet, even without the Musk factor, Tesla would be a company worth watching. According to the latest counts from Kelley Blue Book, Tesla continues to be the U.S. market leader in electric vehicle sales by a long mile. Last quarter, EV sales in the U.S. marked an all-time high and so too did Tesla sales, which were up an envious 25% year over year in Q1.
Price cuts certainly helped drive higher volume, and Tesla’s EV market share of 62% was lower year over year, but the bottom line is still good: The company with a four-vehicle lineup is the #1 seller of luxury units in the U.S. and continues to pull away from its competitors. An alien dreadnought, indeed.
But Wait There’s More
If it often feels that Tesla and Elon Musk are the only auto industry stories worth covering, you are not alone. But look beyond Mr. Musk and his magic machines and you’ll see an entire auto industry spinning a fantastic narrative as well. As Cox Automotive Senior Economist Charlie Chesbrough shared in a recent note, “The big story right now is the dichotomy in the new and used markets. New sales appear to be gaining steam in April, while used sales stumble.”
Supply is the story here. As reported last week, new-vehicle inventory continues to climb and new-vehicle buyers – who are more affluent and less impacted by changing economic conditions – are still very much in market and defying expectations.
And then there is the used-vehicle market. After a surprisingly strong performance in Q1, the market is showing signs of losing steam. Inventory levels are tightening, retail prices are increasing, and demand is waning.
As reported yesterday, the Manheim Used Vehicle Value Index (MUVVI) turned over in the first two weeks of April. Dealers are likely feeling the slowdown and, of late, are less enthused about acquiring inventory – according to the latest MUVVI measure, used-vehicle values in the first 15 days of April trended downward, after four months of gains.
As our team described late last month, Q1 had more surprises than a Tesla earnings call. Later this month, we will begin to see Q1 financial reports from other major players. The Cox Automotive team will be tracking numbers for the Big Seven – General Motors, Toyota, Ford, Stellantis, Hyundai/Kia, Honda, Nissan – which account for well more than 75% of new-vehicles sales each year. Look to the Cox Automotive Newsroom for topline reports on transaction prices, incentives and sales in the all-important U.S. market. General Motors goes first, early next week.
As always, we appreciate your ongoing interest in Cox Automotive. If you’d like to connect with our analysts or experts, feel free to reach out. The Cox Automotive PR team is happy to help.
Cheers, Mark Schirmer
Director | Corporate Communications