Tesla misses delivery estimates for first quarter
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Tesla delivered 422,875 vehicles, compared with analyst expectations for 430,008 vehicles.
PHOTO: REUTERS
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TEXAS – Tesla on Sunday missed estimates for first-quarter deliveries as a bleak economic outlook and rising competition weighed on the electric automaker’s sales.
Tesla delivered 422,875 vehicles, a record for the automaker but lower than analyst expectations for 430,008 vehicles, according to Refinitiv data.
Investors have been watching chief executive Elon Musk’s gamble that cutting prices would stimulate sales, making up for the profit hit from eroding margins.
Tesla has attempted to bolster demand with price cuts at a time when orders are under pressure from a turbulent economy and rising competition from start-ups such as Lucid Group and legacy players including Ford Motor.
If Tesla had not done the price cut, it “would have been ugly”, Mr Gene Munster, managing partner at Deepwater Asset Management, said on Sunday. “I think what it tells you is the economy is getting tough.”
He added that the sales “showed an acceleration, but they did not accelerate to the level that Elon had suggested it would”.
Mr Musk, who has missed his own ambitious sales targets for Tesla in recent years, said in January that 2023 deliveries could hit two million vehicles, absent external disruption, from 1.3 million in 2022.
Tesla delivered 6 per cent more of its mainstay Model 3/Model Y vehicles in the first three months of this year than in the previous quarter. But the number of deliveries for its higher-priced Model X/Model S vehicles slumped by 38 per cent.
The carmaker produced more cars than it delivered, manufacturing 440,808 vehicles for the first three months of this year.
The automaker ramped up production at new factories in Texas and Berlin, and as China production recovered from a Covid-19 lockdown hit.
More price cuts?
Some analysts reckon Tesla may be pressured to lower prices further as many automakers have matched the cuts and concerns about a weakening economy persist.
Further clouding the demand outlook are United States electric vehicle subsidies, which may fall on some models starting on April 18.
In January, Tesla slashed prices globally by as much as 20 per cent, unleashing a price war after missing Wall Street delivery estimates for 2022.
Tesla’s cuts in China ignited a price war, with a number of Chinese rivals including BYD and Xpeng dropping prices to defend market share amid weakening demand.
Market leader BYD accounted for 41 per cent of so-called new energy car sales in the world’s biggest auto market for the first two months of the year. Tesla, by contrast, had a share of 8 per cent.
Mr Musk had warned that the prospect of recession and higher interest rates meant the EV maker could lower prices to sustain growth at the expense of profit. In January, he said the price cuts had stoked demand.
Tesla shares have soared more than 68 per cent this year on the hope that the company will win the price war it started, although the stock remains more than 50 per cent below its November 2021 peak.
Shares have fallen since Tesla’s investor day on March 1 when Mr Musk said little about how soon the EV maker might launch a more affordable, mass-market vehicle. REUTERS
