The Austin, Texas-based company reported Tuesday that it sold 443,956 vehicles from April through June, down 4.8% from the 466,140 vehicles sold in the same period last year. But sales were better than the 436,000 expected by analysts.
The better-than-expected deliveries pushed Tesla’s stock up nearly 9% in midday trading on Tuesday. The stock is down about 8% so far this year, but it has nearly erased big losses from previous months. Tesla shares were down more than 40% at the start of the year but have risen more than 60% since hitting a 52-week low in April.
Demand for electric vehicles is slowing worldwide, but it is still growing for most automakers. Tesla, with an older model lineup and relatively high average selling prices, is struggling more than other manufacturers. Yet it retains the title of the world’s best-selling electric vehicle maker.
Tesla sold 830,766 electric vehicles worldwide in the first half of the year, far ahead of China’s BYD, which sold 726,153 electric vehicles.
Tesla sold 33,000 more vehicles than it produced during the second quarter, which will reduce the stock available at the company’s stores.
Tesla’s sales decline comes as competition heats up from legacy and startup automakers that are trying to eat away at the company’s market share. Most other automakers will release U.S. sales figures later on Tuesday.
Tesla did not offer an explanation for the drop in sales, which is a sign of expectations to come when it reports second-quarter earnings on July 23.
Nearly all of Tesla’s sales came from the smaller and less expensive Model 3 and Y, while the company sold only 21,551 of its more expensive models, including the X and S as well as the new Cybertruck.
In April, Tesla cut prices on three of its five models in the US by $2,000, but sales still fell. The company also cut prices on the Model Y, Tesla’s most popular model and the best-selling electric vehicle in the US, and the Model X and S.
The cuts in April brought the starting price of the Model Y down to $42,990, the Model S to $72,990 and the Model X to $77,990. Last week, Tesla cut the base price of some newly revised Model 3s shipped to its stores by $2,340, to $38,990.
Additionally, in May, Tesla offered 0.99% financing for up to six years on the Model Y. In June, it offered interest rates as low as 1.99% for three years on the rear-wheel-drive Model 3. Interest rates typically average a little more than 7% for new vehicles, according to Edmunds.com.
Also during the quarter, Tesla cut the price of its “Full Self Driving” system — which cannot drive itself and therefore requires drivers to be alert and ready to intervene — by about a third, dropping its price from $12,000 to $8,000, according to the company’s website.
Jessica Caldwell, head of insights at Edmunds.com, said Tesla is having trouble in a market where most early-stage consumers already own electric vehicles, and mainstream buyers are more skeptical that electric cars can meet their needs.
He said Tesla’s “sudden” price cuts are no longer as effective as they once were because consumers now expect them. “We’ve seen the automaker try all of its tricks by lowering prices and increasing incentives to boost demand, but without much success in the U.S. market,” Caldwell said.
Plus, Tesla’s older model lineup doesn’t look much different than it did years ago. And with the price cuts, used Tesla prices have fallen. Caldwell said anyone who wants a Tesla can get a much better deal by buying a used car.
Caldwell doesn’t see any major catalysts boosting Tesla’s sales this year unless gasoline prices rise, and he said Musk’s move to the right since taking over Twitter has hurt the brand’s image.
Wedbush analyst Dan Ives said in a note to investors Tuesday that second-quarter sales were a “huge comeback” for Tesla. “In short, the worst is behind us for Tesla,” he wrote, noting that the company has cut 10% to 15% of its workforce to reduce costs and maintain profitability. “It appears better days are ahead as the growth story is coming back,” Ives wrote.
In its letter to investors in January, Tesla predicted “significantly lower” sales growth this year. The letter said Tesla is in the midst of two big growth waves, one from the global expansion of the Model 3 and Y, and the other from the Model 2, a newer, smaller and less expensive vehicle whose release date is unknown.
Tesla is scheduled to unveil the custom-built robotaxi at an event on August 8.
,
This story has been revised to correct Tesla’s first-half global sales number, which was 830,966, not more than 910,000. It has also been revised to note that Tesla’s second-quarter sales number was 443,956, not 436,956.
This article is generated from an automated news agency feed without any modifications to the text.
First Publication Date: 03 July 2024, 00:24 AM IST