American EV giant Tesla reported a fall of 31 per cent in its first-quarter deliveries citing struggles with its first shipments of the Model 3 to Europe and China.
The Silicon Valley carmaker reaffirmed its promise to deliver between 360,000 and 400,000 vehicles this year stating that the US orders for its newly launched Standard Range Model 3 outpaced what the company was able to fulfil in the quarter.
The company’s delivery numbers missed analyst’s expectations delivering only half of the quarter’s numbers by March 21. Close to 10,600 vehicles were still in transit at the end of this year’s first quarter marking a notable increase in comparison to the 1,900 vehicles that were in transit at the end of the fourth quarter last year.
Tesla recently opened the doors to its online retail model with the launch of Standard Range Model 3.
“Overall, the Street was expecting an apocalyptic quarter and Model 3 deliveries were better than feared by many,” said Wedbush analyst Daniel Ives, who noted the overall number was “clearly rocky.”
Due to the $7,500 tax credit that was cut in half at the end of 2018 in North America and the shift to delivering its new Model 3 to China and Europe, Tesla had foreseen a notable slowdown. On Wednesday, the company said that the net income in the quarter would be negatively impacted by the lower delivery and recent price cuts.
Tesla delivered 50,900 units of the new Model 3 in the first quarter, falling short of analyst’s estimates of 58,900, according to IBES data from Refinitiv. The company reported a total sales of 63,000 vehicles including 12,100 Model S sedans and Model X SUVs. That was less than half the 27,550 Model S and Xs delivered in the fourth quarter.
The company recently launched the compact SUV Model Y as its next mass-market model.
Its total production fell 10.92 per cent to 77,100 vehicles from 86,555 vehicles in last year’s final quarter. The company churned out 62,950 Model 3s, up front from a total of 61,394 Model 3s in the fourth quarter. Tesla CEO Elon Musk has been under immense pressure to deliver the Model 3 to international markets efficiently while guarding working capital. This is in addition to the public battle that was engaged with US regulators stemming from his tweets about Tesla’s production estimates.
Although Tesla said in late February that it would soon begin selling its originally promised $35,000 version of its Model 3 sedan to its North American customers, the change came too late to make a marked difference in its quarterly deliveries.