Tesla said on Saturday that auto deliveries from April through June were down 18 percent from the first quarter of the year, a rare slowdown for the company due to production problems in China.
Tesla sells more electric cars than any other company, and until recently, it was expanding rapidly in China, Europe and the United States as the price of gasoline increased the appeal of battery power. The company continues to withstand supply chain disruptions better than competitors such as General Motors and Toyota, both of which reported sharp sales drops on Friday.
There is a lot of demand for cars, especially electric cars, but shortages of semiconductors and other key components are forcing buyers to wait several months for delivery.
Tesla More than 254,000 vehicles delivered in the quarter versus 310,000 in the first quarter. It was the first quarterly drop in deliveries since the start of 2020, when the onset of the pandemic slashed auto sales worldwide.
Tesla suggested on Saturday that deliveries could rebound in the coming months as it grapples with supply chain problems, saying it built more cars in June than at any time in its history.
Shutdowns and shortages of components related to the epidemic have hampered operations at the company’s factory in Shanghai. China has the world’s largest car market and accounts for about 40 percent of Tesla’s sales.
Production in China was an “absolute disaster in April and May,” Daniel Ives and John Katsingris, analysts at Wedbush Securities, said in a note to investors last week.
Despite the slowdown in deliveries, Tesla is still doing better than other automakers. Compared to the first quarter of 2021, Tesla deliveries are up 26 percent. That’s much better than General Motors, which said Friday that its shipments of new cars in the United States in the second quarter fell 15 percent from a year earlier. Similarly, Toyota Motor reported a 23 percent drop in US sales.
Tesla has more demands than it can meet, but demand could slow if the global economy experiences speed bumps. Tesla CEO Elon Musk warned in an interview with Bloomberg News In June a recession was “inevitable at some point” and “probably” soon. Tell employees that the company will cut 10 percent of its salaried workforce.
It seems unlikely that Tesla will match its growth compared to last year, when deliveries rose 90 percent to 940,000 vehicles. Wedbush analysts said a 50 percent increase for 2022 is more realistic.
It remains an “impressive achievement” given that China has been “essentially on lockdown for two months,” they said in a note on Saturday.
The slower growth rate is one factor that has led investors to reassess Tesla’s chances of dominating the auto business. Tesla shares are down more than 40 percent from their peak in November, even as more and more buyers opt for electric cars because of their higher energy efficiency.
Depending on local utility rates, the cost of operating an electric vehicle is much lower than the cost of operating a fossil-fueled vehicle. The Tesla Model 3 has a standard range of 142 miles per gallon and costs $450 per year for fuel, according to the Environmental Protection Agency. By comparison, a Honda Accord with a gasoline engine delivers 33 mpg and costs $2,200 a year for fuel.