Tesla sales rise 36% in Q1 after price cuts, but miss estimates
Tesla Inc missed estimates for first-quarter deliveries on Sunday, as increased competition and a gloomy economic outlook overshadowed the electric vehicle maker’s efforts to support demand with price cuts.
Tesla delivered 422,875 vehicles, a record for the automaker, but less than analysts expected for 430,008 vehicles, according to data from Refinitiv.
Investors have been watching CEO Elon Musk’s gamble that cutting prices would stimulate sales, even as they worry about shrinking margins.
Tesla’s shipments increased 4% from the previous quarter and were 36% higher than a year ago.
“Membership growth continues even in the first quarter,” Tesla investor relations manager Martin Viecha said in a tweet.
Tesla delivered 6% more of its flagship Model 3/Model Y vehicles than the previous quarter. But deliveries of its more expensive Model X/Model S vehicles fell 38%.
The automaker produced more cars than it delivered, producing 440,808 vehicles in the first three months of this year.
The automaker ramped up production at new plants in Texas and Berlin, as production in China recovers from the COVID-19 lockdown.
In January, Tesla dropped prices globally by as much as 20%, triggering a price war after Wall Street missed delivery estimates for 2022.
Tesla’s cuts in China ignited a price war, with several Chinese rivals including BYD and Xpeng cutting prices to defend their market share as demand weakens.
Market leader BYD’s share of so-called new energy car sales in the world’s largest car market during the first two months of the year was 41 percent. Tesla’s share, on the other hand, was 8 percent.
Musk warned that the possibility of a recession and higher interest rates meant the electric vehicle maker could cut prices to sustain growth at the expense of profits. Musk said in January that the price cuts have boosted demand.
Some analysts expect Tesla may be pressured to cut prices further, as many automakers have accepted cuts and concerns about a weakening economy persist.
The demand outlook is further clouded by US electric vehicle subsidies, which may drop for some models starting April 18.
Tesla shares are up more than 68 percent this year on hopes the company will win the price war it started, although the stock remains more than 50 percent below its November 2021 peak.
Shares have fallen since Tesla’s investor day on March 1, when Musk said little about how soon the electric vehicle maker might introduce a more affordable, mass-market vehicle.
Read all the Latest Tech News here.
