Tesla misses forecasts for third-quarter deliveries on stiff competition

Bengaluru — Tesla handed over fewer vehicles than analysts expected in the third quarter as stiff competition in China and Europe hit demand for its ageing models, putting the electric vehicle (EV )maker at risk of its first decline in annual deliveries.

Shares of the world’s most valuable vehicle maker fell more than 6% in morning trading on Wednesday and were on track to erase nearly all its gains for the year.

Growing consumer interest in hybrids over EVs, a lack of European subsidies and strong competition in China were a drag on Tesla’s deliveries, as Chinese vehicle maker such as BYD and Xpeng aggressively expand their presence in the world’s largest automotive market, with help from local government subsidies.

Tesla said deliveries rose 6.4% in July-September to 462,890 vehicles, marking its first quarter of growth this year. But the figure fell short of estimates of 469,828, according to 12 analysts polled by LSEG.

“Falling short of expectations could indicate difficulty in meeting overall delivery targets for 2024 and prospects for sustainable growth beyond the current line-up,” said Gadjo Sevilla, senior tech analyst at eMarketer.

Tesla now needs a record-breaking 516,344 vehicle deliveries in the fourth quarter to maintain its 2023 delivery levels of 1.81-million vehicles. A shortfall could result in Tesla recording its first annual drop in deliveries.

Robotaxi

The report comes ahead of a closely watched event on October 10 in Los Angeles where Tesla is expected to unveil its robotaxi product in a bid to shift its strategy to artificial intelligence (AI)-powered autonomous technologies.

Tesla delivered 439,975 Model 3 and Model Y, and 22,915 units of other models, which include the Model S sedan, Cybertruck and Model X premium SUV. It produced 469,796 vehicles in July-September.