Tesla posts rare drop in sales in second quarter

• Tesla’s completed sales fell by almost 18%, to around 255,000 units, in the second quarter.
• Tesla’s sales and output fell short of expectations for the first quarter of this year.
• Tesla’s stock has decreased 35% so far this year; analysts had forecasted a 46% increase.

Lockdowns at Covid in China caused an unusual decline in Tesla’s second-quarter production and sales.

In comparison to the first three months of the year, the electric car manufacturer revealed that completed sales fell by almost 18%, to around 255,000 units, in the second quarter. Production dropped by 15% to 259,000.

Due to citywide lockdown regulations intended to counteract an uptick in Covid cases, the company’s plant in Shanghai was closed for a number of weeks in April. Even when the plant reopened, Tesla’s output was constrained by issues obtaining parts from its vendors. According to Dan Ives, a tech analyst for Wedbush Securities, the lockdowns probably cost Tesla production of approximately 70,000 vehicles in the quarter.

Also Read

After agreements with Tesla and LG, Liontown signs a contract with Ford

Liontown Resources Ltd signed a lithium supply agreement with Ford Motor. The...

According to the company’s statement, the problems Tesla encountered in the first three months of the quarter are now largely resolved.

The statement read, “June 2022 was the largest vehicle production month in Tesla’s history, despite continued supply chain problems and facility shutdowns beyond our control.”

In its monthly report on sales and manufacturing, Tesla does not provide the breakdown of sales by geography. According to corporate documents, only 45% of its revenue came from US sales last year.

Due to the lockdowns, car sales nationwide in a large portion of China ceased for the majority of the quarter. The majority of Tesla’s sales outside the US came from automobiles made in Shanghai.

Nevertheless, it was the first time since early 2020 that the company’s sales or output fell short of expectations. The lockdowns brought on by the early global Covid outbreak also contributed to that sales fall.

Such decreases have been uncommon at the rapidly expanding corporation. Despite a decline in output and sales compared to the first quarter of 2022, the company reported a 25% gain in production and a 27% increase in delivery, thus both metrics were higher from year-ago levels.

Refinitiv’s survey of analysts had predicted that the business would report a 51 percent increase in adjusted income and a 46 percent increase in revenue for the quarter. These expectations might be tempered by the sales’ more modest year-over-year growth, which would further pressure the stock price of the company. Tesla’s stock has decreased 35% so far this year.

In the quarter, the corporation opened two new facilities, one in Texas and one in Germany. But according to Tesla CEO Elon Musk, the output at those plants was “puny” in the first two months of the quarter due to difficulties scaling up production at those factories.

Also Read

Judge grants a second trial in the race-bias brought by Tesla employee

A federal judge in California ordered a new trial on the damages...