Tesla said on Saturday that vehicle deliveries between April and June fell 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 was expanding rapidly in China, Europe and the United States as rising gasoline prices made battery power more attractive. The company continues to weather supply chain disruptions better than its competitors General Motors and Toyotaboth reported sharp sales declines on Friday.
Demand for cars, especially electric cars, is high, but shortages of semiconductors and other key components are forcing buyers to wait months for supplies.
Tesla More than 254,000 cars have been delivered in the quarter compared to 310,000 in the first quarter. It was the first quarterly decline in shipments since the pandemic began to reduce car sales worldwide in early 2020.
Tesla on Saturday said it produced more vehicles in June than ever in its history, suggesting supplies could recover in the coming months as it overcomes supply chain issues.
Pandemic-related shutdowns and shortages of components have halted operations at the company’s Shanghai factory. 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,” Wedbush Securities analysts Daniel Ives and John Katsingris said in a note to investors last week.
Despite the slowdown in supplies, Tesla is still doing better than other automakers. Compared to the first quarter of 2021, Tesla deliveries increased by 26 percent. That’s better than General Motors, which on Friday reported a 15 percent drop in U.S. new car deliveries in the second quarter from a year earlier. Similarly, Toyota Motor reported a 23 percent drop in U.S. sales.
Tesla has more orders than it can fill, but demand could slow if the global economy takes a hit. Tesla CEO Elon Musk warned in an interview Bloomberg news In June, he said a recession was “inevitable at some point” and “most likely” coming soon. He told his employees that the company would Reduce by 10 percent its salaried workforce.
Tesla won’t be able to match last year’s growth, when deliveries jumped 90 percent to 940,000 vehicles. According to Wedbush analysts, a 50 percent increase for 2022 is more realistic.
That’s still an “impressive feat” considering China was “essentially shut down for two months,” they said in a note on Saturday.
The slow growth rate is one of the factors driving investors to do so Reassess Tesla’s chances of dominating the car business. Tesla shares are down more than 40 percent from their peak in November, even as more buyers choose electric vehicles for their superior energy efficiency.
Depending on local utility rates, an electric car costs less than a gas-powered car. According to the Environmental Protection Agency, the Tesla Model 3 standard range gets the equivalent of 142 miles per gallon and costs $450 a year to fuel. By comparison, a Honda Accord with a gasoline engine gets 33 miles per gallon and costs $2,200 a year to fuel.
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