Tesla’s production numbers are a key indicator of the company’s operational strength, and prediction markets have turned them into a trading opportunity.
The U.S. electric vehicle manufacturer produced 459,445 vehicles in Q4 2024, over 10,000 fewer than the previous quarter, according to its latest earnings report.
Increasing production also means rising material costs, especially in a tariff-sensitive industry.
“As is well-known, China has the world’s cheapest EVs,” said Pavel Molchanov, an analyst at Raymond James. “A consumer in China can buy a new EV for less than the equivalent of $15,000, whereas the lowest-cost EV in the U.S. market is currently $27,000. This translates into higher volumes but lower margins for Chinese automakers.”
New policies under a second Trump administration could bring both opportunities and risks for Tesla. While a protectionist approach may limit foreign competition, it could also increase production costs as many raw materials are imported.
Kalshi’s market on Tesla production
The market is closely watching Tesla’s Q1 2025 production numbers. If Tesla falls short of expectations, it could signal a slowdown in consumer demand or deeper operational challenges, impacting stock performance and investor sentiment. Kalshi traders are reflecting these concerns.
Currently, the market outlook is pessimistic, with only 18% of traders predicting production will exceed 410,000 vehicles. The official Q1 2025 production numbers will be revealed in Tesla’s next earnings call around late April.
Tesla’s global supply chain
Potential tariff increases present new hurdles for Tesla. These policies could drive up costs for imported materials, particularly battery components from China and aluminum sourced from Canada.
Tesla’s vertically integrated model has given it a competitive edge in manufacturing, but its reliance on foreign materials remains a challenge. The upcoming Giga Mexico facility, expected to begin operations later this year, depends on Chinese suppliers for battery modules and electronic components.
Additionally, Tesla sources a significant portion of its aluminum and steel from Canada for U.S. production, while battery cells from Panasonic’s Nevada plant require lithium from China and nickel from Australia.
On the other hand, rising import costs could deter foreign competitors from entering the U.S. market.
“The U.S., as the most protectionist market, has the highest EV prices,” Molchanov said, noting how regional pricing strategies play a critical role in automakers’ decisions.
“Europe is in the middle of the price spectrum,” he added. “Because of these differences, automakers need to modulate their pricing carefully across these three geographies (China, Europe and the U.S.).”
