Tesla Q1 deliveries exceed expectations as China helps boost sales

Tesla on Sunday said it delivered 422,875 electric vehicles in the first quarter of 2023, narrowly beating Wall Street estimates of around 420,000 units. The company produced 440,808 vehicles during the same period.

The delivery and production figures are record results for the manufacturer of electric vehicles. In the fourth quarter of 2022, Tesla delivered 405,278 and produced 439,701 units. Those fourth-quarter deliveries were also record results, but they missed Wall Street expectations.

It appears that a large percentage of deliveries came from vehicles produced by Tesla’s gigafactory in Shanghai. The automaker has released price cuts in all markets, including China, where the most recent discounts have sparked a price war among rivals. The result is an increase in Tesla sales in China compared to a year ago, suggesting that the East Asian country is helping to increase the number of global Tesla deliveries.

Tesla does not break down its delivery and production figures by region, but according to data from the China Passenger Car Association (CPCA), Tesla collectively sold 140,453 Chinese-made vehicles in January and February. CPCA has yet to release the March data. If Tesla’s March deliveries in China match February’s numbers, that would mean more than 50% (or nearly 215,000) of Q1 deliveries came from Shanghai.

Tesla began cutting prices for its electric vehicles in China in October. More recently, Tesla slashed prices there again for the Model 3 and Y in January by 6% to 13.5%, adding fuel to the flames of a price war in the country. Competitors Xpeng and Nio, as well as international brands like Volkswagen and Mercedes-Benz, have also slashed prices to compete with Tesla cars, which are now up to 14% cheaper than last year. In some cases they are almost 50% cheaper than in the US and Europe.

The automaker has mirrored similar price cuts in Europe, Mexico and the United States in recent months. This year, Tesla has lowered the prices of Model Y and Model 3 vehicles in the United States by up to 20%, and Model X and Model S vehicles by up to 9%. Last week, Tesla also relaunched its European referral program in an attempt to boost sales before the end of the quarter.

Tesla’s stock price rose 6.24% on Sunday (outside trading hours) following the automaker’s quarterly production and delivery results.

Tesla needed a strong result after a few months of volatile trading. In late 2022, Tesla’s stock price plummeted amid CEO Elon Musk’s Twitter overhaul. Investors were also concerned last year that the numerous discounts Tesla implemented in the markets – including a $7,500 discount for US buyers who took delivery before the end of the year – could indicate weak demand. from customers.

During Tesla’s fourth quarter 2022 earnings call in January, Musk tried to appease investors by saying demand was actually outstripping production. At the time, Tesla acknowledged that lower prices and the general inflationary environment could affect the company’s near-term auto margins, but the company said it was focusing more on its profit margin. operation.

We’ll know more about how global price declines have affected the overall business when Tesla releases its first quarter results on Wednesday, April 19. Late last year, Tesla said it planned to stay ahead of the long-term compound by 50%. annual growth rate with approximately 1.8 million cars for the year.