Tesla vehicle deliveries fall short of expectations as competition in China and Europe hits demand

Tesla delivered fewer vehicles in the third quarter than analysts expected as fierce competition in China and Europe hammered demand for its older models, putting the electric carmaker at risk of its first annual delivery decline.

Shares of the world’s most valuable automaker fell more than 6% in early trading on Wednesday and were on track to erase nearly all of their gains this year.

Growing consumer interest in hybrid vehicles has been dragged down by a lack of European subsidies and fierce competition in China as Chinese automakers such as BYD and Xpeng Motors aggressively expand their presence in the world’s largest auto market with the help of local government subsidies. Tesla deliveries.

Tesla said deliveries rose 6.4% to 462,890 vehicles between July and September, marking an increase in the first quarter of this year. But that number fell short of expectations of 469,828, according to an LSEG poll of 12 analysts.

“Meeting estimates could indicate difficulty meeting overall 2024 delivery targets and sustainable growth prospects beyond the current product lineup,” said Gadjo Sevilla, senior technical analyst at eMarketer.

Tesla currently needs to deliver a record 516,344 vehicles in the fourth quarter to maintain its 2023 delivery level of 1.81 million vehicles. The shortage could lead to Tesla’s first annual decline in deliveries.

The report comes ahead of a closely watched event in Los Angeles on October 10, where Tesla is expected to unveil its robotaxi product as it shifts its strategy toward artificial intelligence-powered self-driving technology .

Tesla delivered 439,975 Model 3 and Model Y vehicles, as well as 22,915 other models, including the Model S sedan, Cybertruck and Model X high-end SUV. 469,796 vehicles were produced between July and September.

A report from JATO Dynamics showed that in July, BMW took the lead in the European pure electric vehicle market for the first time, beating Tesla, which has been losing market share to domestic companies.

Still, some analysts say a return to growth is a positive sign for Tesla and suggests some of the incentives the company has rolled out to boost demand are working.

Matt Britzman, senior equity analyst at Hargreaves Lansdown, said: “Taking a step back, the return to growth in deliveries is the most important thing in today’s data, especially given the strong push from promotions and financing terms. to stimulate demand in a tricky auto market,” who owns Tesla stock.

This spring, Tesla rolled out a slew of new incentives, including offering insurance and zero-interest financing, particularly in China, which accounts for a third of its sales.

Tesla’s deliveries are also higher than those of rival BYD, which delivered 443,426 electric vehicles in the third quarter. That’s partly due to the Chinese EV giant’s focus on plug-in hybrids, which saw deliveries jump more than 75% in the latest quarter.

(Reporting by Akash Sriram in Bengaluru; Editing by Anil D’Silva)