Tesla’s quarterly vehicle deliveries hit a record, but growth has been modest despite recent price cuts — prompting some analysts to forecast further price cuts as the global economy continues to wobble.
The electric-car maker delivered 422,875 vehicles in the first three months of this year, up 4% sequentially and up 36% from the same period last year.
Tesla cut prices by as much as 20% globally in January, sparking a price war after the company failed to meet Wall Street’s 2022 supply estimates.
The base Model Y, which used to sell for $65,990, is now $54,990.
CEO Elon Musk said in January that Tesla could hit 2 million vehicle deliveries this year, up 52% year-on-year, Reuters reported Monday.
The Tesla billionaire was betting that lower prices would boost sales growth, but investors are worried about eroding margins.
“If they hadn’t made the price cut, it would have been ugly. I think what it’s telling you is the economy is going to be tough,” Gene Munster, managing partner at Deepwater Asset Management, said Sunday.
“They showed acceleration, but they didn’t accelerate to the level that Elon suggested.”
The 422,875 deliveries fell short of previous analyzes by many financial institutions, including Refinitiv’s 430,008 and Wall Street’s 432,000, but slightly above analysts polled by Bloomberg, who forecast 421,164 vehicles to be shipped, according to Reuters.
Analyst consensus is “everywhere,” Munster added.
The company delivered 6% more of its flagship Model 3 and Model Y vehicles in the first three months of this year, compared to the previous quarter. But deliveries for the higher-priced Model X and Model S vehicles plummeted 38%.
The automaker produced more cars than it shipped, making 440,808 vehicles in the first quarter.
It tweeted on Sunday that its Texas plant had built 4,000 Model Y vehicles that week, while it reported in late February that its German plant was producing 4,000 cars a week.
Barclays analyst Dan Levy expected Tesla could come under pressure to cut prices further as other automakers also implemented price cuts amid concerns about a deteriorating economy.
Musk warned that the possibility of an economic recession and rising interest rates could cause the EV maker to cut prices to maintain growth, even if it means sacrificing profit.
Tesla’s cuts in China sparked a price war, with Chinese rivals like BYD and Xpeng slashing prices to defend market share amid flagging demand.
In addition, US EV subsidies could fall for some models starting April 18.
In the first two months of this year, BYD, the market leader, held 41% of new car sales in the world’s largest auto market.
But Tesla accounted for just 8% of the market share.
Tesla’s shares are up over 68% this year on expectations that the company would win the price war it initiated, despite remaining more than 50% below its November 2021 peak.
Tesla did not immediately respond to the Post’s request for comment.
With mail wires
https://nypost.com/2023/04/03/tesla-car-deliveries-miss-forecasts-despite-price-cuts/ Tesla car deliveries miss forecast despite price cuts