Tesla said on Saturday that vehicle deliveries from April to June fell 18% from the first quarter of this year, a rare slowdown for the company due to production problems in China.
Tesla sells more electric vehicles than any other company, and until recently it was expanding rapidly in China, Europe and the United States as rising gasoline prices increased the appeal of battery power. Other automakers envy Tesla’s growth rate.
Tesla Over 254,000 vehicles delivered This quarter compared to 310,000 in the first quarter. It was the first quarterly drop in deliveries since early 2020, when the outbreak of the pandemic dented global auto sales.
Tesla’s sales could have been higher were it not for the pandemic-related shutdowns and supply chain issues that have hampered operations at the company’s Shanghai factory. China has the world’s largest auto market, accounting for about 40% of Tesla’s sales.
Production in China “was an absolute disaster in April and May,” Wedbush Securities analysts Daniel Ives and John Katsingris said in a note to investors last week.
Tesla said it had overcome production problems and said it built more cars in June than at any time in its history.
Tesla has more orders than it can produce, but demand could slow if the global economy hits a speed bump.Tesla CEO Elon Musk warns in interview Bloomberg News In June, a recession was “inevitable at some point” and “very likely” soon. He told employees that the company would cut 10% of its salaried workforce.
It seems unlikely Tesla will match last year’s growth, when deliveries jumped 90% to 940,000 vehicles. Wedbush analysts say 50% growth in 2022 is more realistic.
They said in a report on Saturday it was still an “impressive feat” considering China was “essentially shut down for two months.”
Slowing growth is one factor leading investors to reassess Tesla’s chances of dominating the auto business. Tesla shares have fallen more than 40% from their November peak, even as buyers increasingly opt for electric vehicles because of their superior energy efficiency.
Based on local utility rates, electric vehicles have significantly lower operating costs than fossil fuel vehicles. According to the Environmental Protection Agency, the standard range of the Tesla Model 3 is equivalent to 142 miles per gallon and the annual fuel cost is $450. By comparison, a Honda Accord with a gasoline engine gets 33 miles per gallon and costs $2,200 a year in fuel.