Tesla’s summertime deliveries of electric vehicles surged 27% from last year but still fell below analyst projections as Elon Musk’s car company navigated through softening customer demand as well as factory upgrades.
The Austin, Texas, automaker sold 435,059 vehicle s during the July-to-September period, up from 343,830 at the same time last year. Analysts had predicted Tesla would sell about 461,000 vehicles during the latest quarter, according to FactSet Research.
As usual, Tesla’s sales consisted primarily of its Model 3 and Model Y vehicles, which have been made even more attractive by rounds of price cutting that have eaten into the company’s profit margins. The third-quarter sales also marked a step back from Tesla’s 466,140 vehicle deliveries during the April-to-June period.
The company blamed the sequential sales decline on planned downtime to upgrade its factories.
Tesla said it made 430,488 vehicles in the latest quarter, slightly below the number it delivered.
Despite large price cuts, sales of the aging models S and X fell 14% year over year to 15,985.
The company will need a big finish to 2023 to realize CEO Musk’s stated goal of increasing its sales by 50% annually. To hit that target, Tesla will have to sell 1.97 million vehicles this year. Through the first nine months of the year, Tesla has delivered just over 1.3 million vehicles. Analysts are anticipating Tesla will sell 1.84 million vehicles for the full year.
Tesla has been slashing prices most of this year to keep attracting buyers who now have a wider selection of electric vehicles as more automakers shift away from gasoline-powered cars and trucks. The discounts range from $4,400 on Tesla’s top-selling vehicles to as much as $20,000 on its most expensive models.
Just how much the latest round of cost cutting has trimmed Tesla’s profit margins will be detailed Oct. 18 when it plans to release its third-quarter earnings.
Shares of Tesla rose slightly at midday Monday to $251.35. Despite the squeeze that already has occurred on Tesla’s profits, the company’s stock price has doubled so far this year. Part of the run-up has stemmed from a deal allowing rivals General Motors and Ford to join its charging network.
Tesla also could be an indirect beneficiary from a labor strike that began last month and continues to close down factories operated by GM, Ford and Stellantis. The United Auto Workers labor union is demanding major wage increases that would likely drive up the prices of their cars and trucks — a pain point that Tesla isn’t facing with its non-union workforce.
The UAW is also fighting for higher wages and union representation at factories that make the batteries for electric vehicles, demands that the U.S. automakers are resisting in a battle they say they need to win to remain competitive with Tesla and foreign companies.