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Tesla posts record quarterly deliveries after price cuts, up 4% from Q4

Published 04/02/2023, 12:12 PM
Updated 04/03/2023, 07:46 AM
© Reuters. FILE PHOTO: Visitors check a Tesla Model 3 car next to a Model Y displayed at a showroom of the U.S. electric vehicle (EV) maker in Beijing, China February 4, 2023. REUTERS/Florence Lo/File Photo

By Akash Sriram and Hyunjoo Jin

(Reuters) - Tesla (NASDAQ:TSLA) Inc on Sunday posted record quarterly vehicle deliveries, but quarter-on-quarter sales growth was modest despite price cuts as rising competition and a bleak economic outlook weighed.

Tesla delivered 422,875 vehicles for the first three months of this year, up 4% from the previous quarter. This was 36% higher than a year ago. In January, Chief Executive Elon Musk said Tesla could achieve 2 million vehicle deliveries this year, up 52% from last year.

Investors have been watching Musk's gamble that cutting prices would stimulate sales, although they worry about eroding margins.

In January, Tesla slashed prices globally by as much as 20%, unleashing a price war after missing Wall Street delivery estimates for 2022. The basic Model Y that used to sell for $65,990 now costs $54,990.

"If they wouldn't have done the price cut, it would have been ugly. I think what it tells you is the economy is getting tough," Gene Munster, managing partner at Deepwater Asset Management, said on Sunday.

"They showed an acceleration, but they didn't accelerate to the level that Elon had suggested it would."

Musk, who has missed his own ambitious sales targets for Tesla in recent years, said in January that 2023 deliveries could hit 2 million vehicles, absent external disruption, from 1.3 million in 2022.

The first-quarter deliveries compare with analyst expectations of 430,008 vehicles, according to Refinitiv data based on seven analysts.

According to a mean of estimates compiled by FactSet as of Friday, Wall Street was expecting Tesla to report deliveries of around 432,000 vehicles for the quarter, the Wall Street Journal and CNBC reported.

Tesla missed the figure analysts surveyed by Refinitiv and FactSet were expecting. Other estimates show Tesla beat Wall Street expectations with its 422,875 vehicles delivered.

Analysts surveyed by Bloomberg expected 421,164 vehicles would be shipped.

Tesla said a consensus of more than 20 analysts called for 421,500 vehicles delivered, Tesla investor Gary Black said in a tweet. Reuters could not independently confirm that figure.

The consensus is "all over the place," Munster said.

Tesla delivered 6% 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%.

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. Tesla tweeted on Sunday that its Texas factory built 4,000 Model Y this week, while the automaker said in late February that its German plant was producing 4,000 cars per week.

Tesla's Frankfurt-listed shares were down 0.6% at 0801 GMT, lagging the broader European market but inline with weaker tech stocks as rising crude oil prices revived worries about inflation.

The pan-European STOXX 600 was up 0.2%.

MORE PRICE CUTS?

Barclays (LON:BARC) analyst Dan Levy expected Tesla may be pressured to lower prices further as many automakers have matched the cuts and concerns about a weakening economy persist.

Tesla did not immediately respond to Reuters' questions about whether further cuts are in store.

Further clouding the demand outlook are U.S. electric vehicle subsidies, which may fall on some models starting on April 18.

Tesla's cuts in China ignited a price war, with Chinese rivals including BYD and Xpeng (NYSE:XPEV) dropping prices to defend market share amid weakening demand.

Market leader BYD accounted for 41% 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%.

Musk 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, Musk said the price cuts had stoked demand.

Tesla shares have soared more than 68% this year on hopes the company would win the price war it started, although the stock remains more than 50% below its November 2021 peak.

© Reuters. FILE PHOTO: Visitors check a Tesla Model 3 car next to a Model Y displayed at a showroom of the U.S. electric vehicle (EV) maker in Beijing, China February 4, 2023. REUTERS/Florence Lo/File Photo

Shares have fallen since Tesla's investor day on March 1 when Musk said little about how soon the EV maker might launch a more affordable, mass-market vehicle.

(Graphic: Tesla shares have lost almost 50% since 2021 peak - https://fingfx.thomsonreuters.com/gfx/mkt/zjvqjnrdnpx/tesla.PNG)

Latest comments

But Ford is doing really well with their EV's.  Oh wait.  They just lost $3 billion on EV's.  Never mind.
even with the price cut tesla couldn't hit analysts forecast lol
deliveries maybe up but how about the actual profit margins? or do we still care about profits anymore?
Tesla's market share in China, the largest global auto market, is at 7.6% down from 7.8%. BYD is at 40.5% with double the growth rate and expanding worldwide. TSLA is definitely overpriced... or BVD massively underpriced.
NAS Fit is down. a record delivery is not helping it?
What a joke. Part of the fake news party and democratic party these people are lost.
These people are lost. Ford? Is losing money. What did they deliver plus wont be profitable till 2026. Fake news Tesla beat the Consensus estimate.Wow.
They had to edit this since they got caught sayin consensus was 430k when it was really 420k
dude it's everywhere. do a Google search
Even with historical discount, still missed the delivery?
Agee with MrChong below…especially in this macro roller coaster. But, if you don’t like it, then short it or wait for a bounce off of 200 or 195 back up.
there were a few not so good news on Fri but the stock rised anyway. people were betting on this report and a bubble was built.
Tomorow this bubble going under 195
They actually didn't miss . Reuters is not being truthful .
For the quarter, Tesla delivered 422,875 vehicles globally, which is an all-time record for the EV-maker. That figure barely topped street estimates —as complied by Bloomberg —of slightly over 421K deliveries. Tesla also produced 440,808 cars for the quarter, easily topping estimates of 432.5K vehicles. While Tesla doesn’t break out sales by region, global sales of the Model 3 and Model Y SUV surged, following price cuts for both vehicles both in the U.S. and abroad.
tesla did not top out on WS estimates. even says so in this article. they missed by about 10k vehicles. that also includes the loss of 5% revenue per vehicle sold
It's easy to say Tesla could hv done better and stuff. Despite already done so well. Be real. Look at those that even struggles to deliver 22k units a year and worse at a lost. This is not an easy feat. Kudos to Tesla. Tesla has won in all categories, in terms of efficiencies, technology, big data, manufacturing integration and leadership. Bears missed out the run but if continue to be stubborn, one will missed the stock of the century.
BVD is miles ahead of musk
The part about "rising competition from Lucid and Ford" is hilarious. Reuters needs to replace their tech writers LOL!
Expectations are 421k I think you better check your work.
Be real, A new car is manufactured every 17 secs and sold every 18. Expectations were sales of 421,000 and have been exceeded by 422,875 Sales. Success
Enron Musk’s ponzi scheme is collapsing
unless that can price cut competitors to out of business, don't expect beating profit estimate in the future
what bank will finance anyone anymore without 800 credit , or backing of borrowing against your own equity
Record deliveries but not good enough lmao ok
it will be diving till cyber truck is out
missed delivery estimate + price cuts = profit margin pain
Except thats the deliveries were a record for the company
a that should sober up some enthusiasts
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