Tesla's Lead Times Longer Than Ford, GM Due To This Reason, Says Munster

Tesla Inc TSLA has a lead time twice as long as those of the top legacy automakers General Motors Co GM and Ford Motor Co F, Loup Funds analyst and founder Gene Munster said on Thursday.

Huge Demand: Austin, Texas-based Tesla’s higher lead times are due to the outsized demand on top of a tight supply chain, the analyst said in a note.

“While some view the long lead times for Tesla as an outcome of the supply chain, my view is that half of the lead times are related to Tesla’s outsized demand,” Munster said.

Tesla’s deliveries in the first quarter grew by 72%, compared to the industry average of an 18% fall, including Ford, GM, and other legacy rivals, as per Munster. 

“This gap is similar to that of the December 2021 quarter, when Tesla grew deliveries by 71% and the industry was down 20%.”

See Also: Tesla Prices Will Come Down In A Rare Event, Says Munster — Here's His Theory

What Are Lead Times Like?: Tesla has an average delivery time of 135 days, or 4.5 months, as per Loup Funds, a research-driven venture capital firm.

In comparison, deliveries from GM and Ford dealers in the U.S. could take two months.

“We called a handful of dealers in the U.S. and were quoted lead times of 45-70 days, with an average of about 2 months. In other words, you can get a car from a traditional carmaker in the US in about half the time it takes to get a Tesla.”  

2.3M Vehicles By Mid-2023: Munster estimates Tesla’s two new factories — Giga Berlin and Giga Texas — could help add significant capacities, and the EV maker could produce about 2.3 million vehicles by mid-2023. 

See Also: Tesla Zips Past The Million Mark For Both Output And Deliveries Over Past 12 Months

Tesla CEO Elon Musk has in the past said the electric vehicle maker has no demand problem and that it faces a “very much production ramp problem.” 

Price Action: Tesla stock closed 1.1% higher at $1,057.3 a share on Thursday, according to Benzinga Pro.

Photo: Courtesy of Tesla