Tesla’s quarterly deliveries miss expectations despite 6% rise

Tesla deliveries rose, but not by as much as analysts had been expecting. Photo / Getty Images

Tesla’s quarterly vehicle deliveries fell short of market expectations, damping hopes for a robust rebound on the back of a recovery in Chinese car demand.

The company delivered 462,890 vehicles globally in the three months to September, up 6.4% from a year earlier. The increase was the first this year but missed Wall Street expectations for 463,000 vehicles. That pushed down its shares by more than 6% on Wednesday.

However, Tesla retained its position as the top electric vehicle maker. This week, China’s BYD reported that third-quarter deliveries of EVs totalled 443,426 – a 2.7% rise from the previous year.

The gain in battery-powered cars was modest for BYD but the group reported a 75.6% increase in the sales of plug-in hybrids after it unveiled its latest hybrid technology in May.

Growth in EV sales has slowed globally but prospects in China, the world’s largest car market, have improved after Beijing in July doubled the subsidies offered to consumers who switched from a petrol vehicle to an EV or a plug-in hybrid.

Tesla did not provide a geographical breakdown of its deliveries, but industry data and analyst forecasts show that sales were weak in Europe while deliveries in China were up nearly 25% compared to the previous quarter.

In recent weeks, analysts said there was growing enthusiasm among investors that a boost in Chinese demand would allow the Austin-based company to beat market expectations.

For much of the past two years, Tesla has wrestled with increased competition from the cheaper offerings of EVs as well as plug-in hybrids from Chinese rivals, forcing it to slash prices on some of its models including lease prices.

Mercedes-Benz and Porsche have also recently warned of lower-than-expected profits as sales of luxury cars in China have been hit by sluggish consumer spending.

Barclays analyst Dan Levy said in a note that the miss in Tesla deliveries appeared to have been led by weakness in its premium Model S and X vehicles. The Cybertruck, an off-roader that was launched last year, and which has suffered from manufacturing issues and faulty part recalls, also affected the numbers.

The rising expectations for higher deliveries had also come as Tesla prepared to unveil its first “robotaxis” – a fleet of self-driving taxis – next week in an event Elon Musk described as “one for the history books”.

Musk has made a radical strategic pivot towards autonomous driving, artificial intelligence and robotics, telling investors that these technologies would be Tesla’s main revenue sources and drive up its valuation.

But there are concerns over how and when the company will monetise its autonomous taxis with uncertainties around the technology itself, insurance coverage, vehicle cost as well as the regulatory environment.

Tom Narayan, an analyst at RBC Capital Markets, said the focus was now on the new opportunities for Tesla from the “robotaxi” and its self-driving software, known as full-self driving, or FSD.

“I don’t see robotaxis being ubiquitous for several years, if not maybe even decades,” Narayan said. “But the reason why it’s so exciting is ... when it happens, it has the potential to dramatically increase the size of the auto industry.”

Written by: Kana Inagaki in London, Stephen Morris in San Francisco and Gloria Li in Hong Kong

© Financial Times