Tesla’s deliveries for the second quarter of 2023 are anticipated to have decreased by approximately 3.7%, marking the first consecutive quarterly decline for the prominent electric vehicle manufacturer. This development can be attributed to the intensifying competition within the Chinese market and a slowdown in demand resulting from the absence of new, cost-effective models.
As per the average estimate derived from forecasts provided
by twelve analysts polled by LSEG, the company is projected to deliver
approximately 438,019 vehicles during the April to June timeframe. It is
noteworthy that seven of these analysts have revised their initial expectations
downwards within the past three months. The official announcement of these
results is anticipated to occur on Tuesday.
Tesla, after years of rapid growth that propelled it to the
position of the world’s most valuable automaker, has encountered a temporary
setback. In January, the company issued a cautionary statement indicating that
delivery growth in 2024 is anticipated to be “considerably lower” as the
positive impact of extended price reductions begins to diminish.
In addition to these challenges, a consumer shift towards
more affordable gasoline-electric hybrid vehicles has resulted in an
accumulating inventory of Tesla vehicles. To address this, the company has
implemented price reductions and various incentives, such as more favorable
financing options and leasing arrangements.
In the beginning of this year, Chief Executive Officer Elon
Musk shelved the plans to manufacture an all-new, less expensive electric car
and shifted Tesla’s focus to robotaxis, which raised concerns among certain
investors who apprehend that autonomous technology will be challenging to
perfect. Despite these concerns, investors overwhelmingly voted in favor of his
record-breaking $56 billion compensation package at the annual shareholder
meeting held last month.
Barclays analyst Dan Levy forecasted an 11% decline in
second-quarter deliveries, which would be Tesla’s largest decline to date. He
cautioned that a disappointing delivery result could redirect focus to the
current challenging fundamental environment for Tesla”.
Tesla’s stock has experienced a significant decline in value
this year, resulting in its position as one of the underperforming companies
within the S&P 500 index. This performance stands in contrast to Mr. Musk’s
earlier projection in April, where he expressed optimism regarding Tesla’s
ability to achieve sales growth during the current year. In response to these
challenges, cost-cutting measures have been implemented, including workforce
reductions that have impacted the supercharging team.
OLD DESIGNS
It is anticipated by some analysts that the organization may
experience its inaugural yearly sales decline during the current calendar year.
Deliveries experienced their most significant decline in almost four years
during the January-March timeframe, falling short of expectations established
by Wall Street.
Tesla’s European sales experienced a significant decline of
36% in May. This downturn can be attributed to the reduction of EV subsidies
and a decrease in demand from fleet operators, who contributed to almost half
of the company’s sales in the region during the previous year.
In May, Reuters reported that Tesla was addressing concerns
from European leasing companies. The companies were experiencing financial
losses due to Tesla’s frequent price reductions, which diminished the value of
their fleet. Additionally, Tesla’s slow service and costly repairs were causing
dissatisfaction among corporate customers.
Tesla’s competitors in China have introduced lower-priced
models, and Tesla has been relatively slow in introducing new designs to the
market. In April, Musk announced that Tesla would launch “new models” later in
the year, including affordable vehicles, but did not provide any specific
pricing information.
Tesla recently updated its Model 3 sedan, albeit without
significant design modifications. Notably, the popular Model Y SUV, Model S
premium sedan, and Model X SUV have not undergone substantial changes in
several years.
The organization commenced the distribution of its
Cybertrucks towards the end of the previous year. However, Mr. Musk does not
anticipate the commencement of mass production of the vehicle until 2025. The
pickup has been subject to numerous recalls and quality-related concerns.
In May, Tesla omitted its objective of delivering 20 million
vehicles annually by 2030 in its most recent impact report. This represents a
significant shift from the company’s previous long-term annual growth target of
50% for EV deliveries, which had been widely publicized for several years.
Tesla intends to reveal its robotaxis on August 8th,
aiming to accelerate the adoption of its “Full Self-Driving” software. However,
the commencement of production and the projected quantity remain uncertain.