Tesla’s Deliveries Fall Short of Expectations

By Akash Sriram

(Reuters) – Tesla handed over fewer vehicles than analysts expected in the third quarter as stiff competition in China and Europe hit demand for its aging models, putting the electric-vehicle maker at risk of its first-ever decline in annual deliveries.

Shares of the world’s most valuable automaker fell more than 6% in morning trading on Wednesday and were on track to erase nearly all their gains for the year.

Growing consumer interest in hybrids over EVs, a lack of European subsidies, and strong competition from Chinese automakers such as BYD and Xpeng were significant factors affecting Tesla’s deliveries in the world’s largest automotive market, where local government subsidies have aided local firms.

Tesla reported a 6.4% increase in deliveries during the July-September period, totaling 462,890 vehicles, marking its first quarter of growth this year. However, this figure fell short of the expected 469,828 deliveries according to 12 analysts surveyed by LSEG.

“Falling short of expectations could indicate difficulty in meeting overall delivery targets for 2024 and prospects for sustainable growth beyond the current lineup,” said Gadjo Sevilla, senior tech analyst at eMarketer.

To maintain its 2023 delivery levels of 1.81 million vehicles, Tesla now needs to achieve a record-breaking 516,344 deliveries in the fourth quarter. A shortfall could result in the company’s first annual drop in deliveries.

This report comes ahead of a closely watched event on October 10 in Los Angeles, where Tesla is expected to unveil its robotaxi product, shifting its strategy towards AI-powered autonomous technologies.

Tesla’s Q3 deliveries included 439,975 Model 3 and Model Y vehicles, along with 22,915 units of other models such as the Model S sedan, Cybertruck, and Model X premium SUV. In total, the company produced 469,796 vehicles in the July-September period.

In July, BMW led the European battery electric vehicle market for the first time, surpassing Tesla, which has been losing market share to domestic firms according to a report by JATO Dynamics.

Despite these challenges, some analysts view the return to growth as a positive sign for Tesla, indicating that new incentives to boost demand, such as offers on insurance and zero-interest financing, especially in China, are having an effect.

Furthermore, Tesla’s deliveries exceeded those of rival BYD, which delivered 443,426 battery electric vehicles in the third quarter, aided by a significant increase in plug-in hybrid vehicle deliveries, which jumped over 75% in the same period.