Tesla may have delivered 462,890 EVs in the three months leading up to last Sunday, but this fell short of forecasts, causing shares to drop by 6% at one point on Wednesday.
By the close of trading, the shares were down 3.5%, as analysts noted that the company now faces the prospect of its first annual decline in sales unless it can sell a record number of vehicles in the current quarter to reach a total of just over 1.8 million units for 2023.
While the September quarter figure was 6.4% higher than its year-ago delivery number, it was about 7,000 units short of market estimates.
Sales must reach 516,000 to match last year’s delivery figure of 1.81 million vehicles, which represented a substantial 38% increase from 2022, when production was suppressed by COVID restrictions in China that affected its large factory in Shanghai.
A shortfall would result in Tesla recording its first-ever annual drop in deliveries. However, judging by the discussions in U.S. markets, investors appear less concerned about the potential shortfall and more focused on next week’s unveiling of Elon Musk’s much-hyped robotaxi.
The launch is set for October 10 in Los Angeles, as Musk and Tesla aim to shift attention away from the increasingly challenging sales climate to a focus on AI-powered autonomous technologies.
Musk’s EV manufacturer is falling behind competitors in Europe and especially in China, where automakers like BYD, Li, Leap, Nio, and Xpeng are aggressively expanding their presence in the world’s largest automotive market, aided by government subsidies.
Additionally, in July, BMW surpassed Tesla to become the top-selling EV maker in Europe.
This competitive pressure has led Tesla to implement price cuts and incentives, such as no-interest loans in China, but these measures have negatively impacted profit margins.