Tesla reported a decline in electric-vehicle sales in the third
quarter, attributing it to production stoppages resulting from factory
upgrades.
In the period from July to September, Tesla delivered 435,000 cars
globally, a drop from the 466,000 cars delivered in the second
quarter. Tesla stated that the decrease resulted from scheduled
factory downtime, and it kept the goal of selling 1.8 million vehicles
by the end of 2023 unchanged.
Number of Tesla vehicles delivered worldwide from 1st quarter 2016 to 3rd quarter 2023(in 1,000 units)
Chief Executive Elon Musk attributed the lower sales volume to high
interest rates, which blunted the impact of price cuts on vehicles.
“If interest rates remain high or if they go even higher, it’s that
much harder for people to buy the car,” he said during a conference
call.
In the U.S., Tesla faces intensified competition not only from
traditional automakers churning out electric vehicles but also from a
newer rival, Rivian Automotive. During the third quarter, Rivian’s
deliveries increased by 16.5% compared with the preceding three
months.
In China, Tesla faces competition from homegrown automakers that are
launching new models more quickly. In September, Tesla delivered
slightly more than 74,000 electric cars manufactured in China, marking
a year-on-year decline of 10.9%, according to data released by the
China Passenger Car Association. In contrast, primary competitor BYD
recorded a 42% surge in deliveries last month, while sales in China
amounted to 240,000 electric cars.
Lower pricing and a wide selection of models are BYD’s strengths. BYD
has released over 30 models in the past 15 years, while Tesla only has
four models on sale in China. In contrast, Tesla’s been focused on
cutting the price of existing models to stimulate more sales, and its
newest model, the Cyber Truck, has been struggling to enter
production.
But analyst Dan Ives of Wedbush said in a note that there are still
some “clear tailwinds” for Tesla going into next year, pointing to the
refresh of its Model 3 and the expected production of the Cybertruck.
“We see better days in Q4 and 2024,” wrote Ives.
Tesla can also potentially benefit from the ongoing strike by the
United Auto Workers union against legacy automakers like Ford, General
Motors and Stellantis. The strike is aimed at winning higher wages for
unionized workers, but these costs might be passed on to consumers.
This can possibly work for Tesla, whose factories are not unionized,
by making its cars more competitive on pricing and sales.
Tesla’s stock gained less than 1% in regular trading.