Tesla Sales Slow as Pandemic Hobbles Production

Tesla said Saturday that vehicle deliveries from April through June fell 18 percent from the first quarter of the year, a rare slowdown for the company caused by production problems in China.

Tesla sells more electric cars than any other company and, until recently, was expanding rapidly in China, Europe and the United States as the rising price of gasoline increased the appeal of battery power. Other carmakers envied Tesla’s growth rate.

Tesla delivered more than 254,000 vehicles in the quarter compared with 310,000 in the first quarter. Sales would probably have been even higher if not for shutdowns and supply chain problems, related to the pandemic, that hobbled operations at the company’s factory in Shanghai. China has the world’s largest car market and accounts for about 40 percent of Tesla sales.

Production in China was “an absolute disaster in the months of April and May” Daniel Ives and John Katsingris, analysts at Wedbush Securities, said in a note to investors this past week.

Tesla suggested that it had overcome the production problems, saying that it built more cars in June than ever in its history.

Tesla has more orders than it can fill, but demand could slow if the global economy hits a speed bump. Elon Musk, Tesla’s chief executive, warned in an interview with Bloomberg News in June that a recession was “inevitable at some point” and that “more likely than not” it would come soon. He has told staff that the company will cut 10 percent of its salaried work force.

Tesla appears unlikely to match its growth from last year, when deliveries rose 90 percent to 940,000 cars. A 50 percent increase for 2022 is more realistic, the Wedbush analysts said.

The slower growth rate is one factor that has caused investors to reassess Tesla’s chances of dominating the car business. Tesla shares have fallen more than 40 percent from their peak in November, even as more and more buyers choose electric cars because of their superior energy efficiency.

Depending on local utility rates, an electric car costs significantly less to operate than a fossil-fuel vehicle. A Tesla Model 3 standard range gets the equivalent of 142 miles to the gallon and costs $450 per year to fuel, according to the Environmental Protection Agency. By comparison, a Honda Accord with a gasoline engine gets 33 miles to the gallon and costs $2,200 per year to fuel.

Source link

Latest

VIDEO: Watch cloudburst over Jamshoro as Sindh receives highest ever rainfall in 24 hours

JAMSHORO: Cloudburst hovered above Jamshoro on Friday as the...

Canadian Cardinal Marc Ouellet denies sexual assault allegations

Ouellet, a prominent figure in the Catholic Church, ‘firmly’...

What is the ‘lesbian breakup curse,’ and why are some TikTok users worried about it?

It started with Sedona and Rylee, who announced their...

Judge Orders Starbucks To Reinstate Seven Fired Union Supporters In Memphis

A federal judge in Tennessee has ruled that Starbucks must offer reinstatement to seven workers in Memphis who were fired amid a union organizing...

Biden Signs Climate, Health Bill Into Law as Other Economic Goals Remain

WASHINGTON — President Biden signed into law a landmark tax, health and energy bill on Tuesday that takes significant steps toward fulfilling his goal...

Biden Signs Expansive Health, Climate and Tax Law

WASHINGTON — President Biden on Tuesday signed a long-awaited bill meant to reduce health costs, reduce greenhouse gas emissions and raise taxes on corporations...