Tesla Faces Overcapacity and Inventory Build-Up

TapTechNews June 9th news, the once-fiery scene where Tesla cars were sold out as soon as they rolled off the production line seems to be gone forever, and the company is currently facing a dilemma of overcapacity and mountains of unsold cars. According to SherwoodNews, in order to store these unsold cars, Tesla has piled them up in parking lots and can even be seen from space.

In the first quarter of 2024, Tesla reported producing 433,371 cars but only sold 386,810. This means that 46,561 cars couldn't be sold, resulting in severe inventory build-up. This situation can be attributed to the slowdown, or even stagnation, of the overall electric vehicle market. However, Sherwood points out that Tesla itself is also to blame: The main reason for the inventory increase is the misalignment between production and orders, explains Vaibhav Taneja, Tesla's chief financial officer, about the reason for the company's free cash flow of -$2.5 billion (the expenditure on artificial intelligence computers is also partly to blame), We expect the inventory to improve in the second quarter and the free cash flow to turn positive again.

So where exactly are these mountains of Teslas stored? The answer is open-air parking lots. Sherwood used the images provided by SkyFi (a satellite image trading market) to discover the storage locations of Tesla cars. By comparing the satellite images of the Texas Gigafactory in October 2023 and March 2024, it can be seen that the parking lots around the factory have changed from a partially or almost full state to completely filled.

TapTechNews noticed that Tesla also stores vehicles in parking lots in other places in the US. There are nearly 500 Teslas piled up in a parking lot outside the St. Louis Chesterfield Mall, and hundreds of Model Y cars are also parked outside a Sears store in Moreno Valley, California.