Tesla Posts First Quarterly Increase In Deliveries, But Shares Slump With Investors Hoping For More

Low-interest financing, sweet leasing arrangements, price discounts, and free charging bolstered Tesla’s global deliveries in the third quarter, marking the company’s first increase of the year.

The Austin, Texas-based business announced Wednesday that it delivered 462,890 vehicles from July to September, aided by loans as low as 1.99% and $299 monthly leases on the Model 3, its least expensive vehicle. It supplied 435,059 autos in the same time period last year.

The results for July through September were somewhat higher than expert forecasts of 462,000 for the period, according to data provider FactSet.

Tesla Posts First Quarterly Increase In Deliveries, But Shares Slump With Investors Hoping For More

Tesla Inc. shares fell nearly 4% in morning trading.

The deliveries were “good and a step in the right direction,” noted Wedbush analyst Dan Ives, but there would be pressure on the company’s shares because investors had expected much greater.

“Overall, this is a clear improvement from the first half and we believe getting in the range of 1.8 million for the year is still the key and important bogey,” Ives told investors.

Tesla has struggled to sell its aging model lineup this year as electric vehicle sales in the United States and Europe have stalled due to concerns about range, pricing, and the ability to charge while traveling.

Falling sales early this year resulted in previously unheard-of discounts for the automaker, reducing its industry-leading profit margins. Analysts believe that Tesla’s average vehicle sales price was $42,500 in the third quarter, the lowest in four years.

The sales reduction is likely to reduce third-quarter earnings when they are published on October 23.

Tesla’s sales are declining as competition from legacy and upstart manufacturers increases, threatening the company’s market share.

Tesla’s sales were almost entirely driven by the smaller and less priced Models 3 and Y, with the company selling only 22,915 of its more premium models, which included the X and S, as well as the new Cybertruck.

In a letter to clients on Tuesday, Wedbush analyst Dan Ives predicted that third-quarter sales will return as China sales continued to rise and prices and demand stabilized.”As China continues to heat up on the demand story for Tesla with favourable leasing/financing terms and pent-up demand in the region, we are confident that we will see a significant growth figure in the region,” the reporter stated.

Tesla Posts First Quarterly Increase In Deliveries, But Shares Slump With Investors Hoping For More

According to Ives, Europe will remain slow due to macroeconomic challenges, but demand in the United States should stabilize.

However, BNP Paribas Exane stated in an investment note that the market’s long-term forecasts for Tesla are somewhat optimistic. The company stated that its revenue forecasts for 2026 and 2027 “remain 10% to 15% below the street, respectively.”

Tesla plans to present a purpose-built robotaxi at an event next week.

SOURCE | AP