Tesla Inc announced on Sunday that it had achieved a record quarterly vehicle delivery of 422,875 cars in the first three months of 2023, an increase of 4% from the previous quarter and 36% higher than a year ago. However, the growth in sales was not as high as some had expected, despite the company’s decision to cut prices globally by as much as 20% in January, a move that triggered a price war. Analysts have been monitoring this strategy and are concerned about the impact on Tesla’s profit margins. The company’s CEO, Elon Musk, had previously stated that Tesla could achieve 2 million vehicle deliveries this year, up 52% from last year, but the recent figures fell short of this target.
Tesla delivered 6% more of its Model 3/Model Y vehicles in the first quarter of 2023 compared to the previous quarter, but the number of deliveries for its higher-priced Model X/Model S vehicles decreased by 38%. The company produced 440,808 vehicles for the first three months of this year, more than the number delivered. This increase in production was attributed to new factories in Texas and Berlin and the recovery of production in China following the COVID-19 lockdown.
There are concerns that Tesla may be pressured to further reduce prices as other automakers have matched its price cuts, and the economic outlook is bleak. Additionally, U.S. electric vehicle subsidies may decrease on some models starting on April 18, adding to the uncertainty around demand.
Tesla’s price cuts in China have also triggered a price war, with Chinese rivals such as BYD and Xpeng dropping prices to defend their market share amid weakening demand. BYD is currently the market leader in new energy car sales in China, accounting for 41% of sales in the first two months of this year, while Tesla had a share of 8%.
Despite the positive sales figures, Tesla’s stock remains more than 50% below its November 2021 peak. Investors are concerned that Tesla’s growth may come at the expense of profit, and the company’s recent investor day did little to alleviate these concerns.
