Tesla is facing the real possibility of declining deliveries for a second consecutive quarter after the April-through-June period points to a decline of 3.7%. It would mark the first time that the EV-maker posted back-to-back drops in successive quarters.
For the period ended June 30, Tesla was expected to deliver 438,019 vehicles, Reuters reported. The figure was based on an estimate made by 12 analysts that were polled by LSEG. Out of these 12, seven actually toned down their expectations for the previous quarter. The company is expected to report on the results by Tuesday.
After years of growth, which made it one of the most valuable automakers in the world, the EV company has encountered some minor setbacks after the appeal of price cuts that were implemented for months started waning.
In January, the company already warned about sales in the year 2024, underscoring that it could possibly be lower. During the six months since, Tesla has been forced to contend with tough competition from China, plus sluggish demand due to a lack of new, affordably priced models.
One factor is the shift of many consumers to a more affordable gasoline-electric hybrid vehicles. This did not do well for Tesla since it simply led to an increase inventory, which they tried moving by offering cheaper financing options, as well as incentives.
To address the growing problem, CEO Elon Musk did not pursue plans to make cheaper electric cars, but shifted the company’s focus to robotaxis. The move drew some concern among investors, however, due to his whopping $56 billion pay package during the annual shareholder meeting in June, investors still voted in favor of the proposal concerning robotaxis.
Dan Levy, an analyst of Barclay predicted a drop in the second quarter deliveries, which would be at around 11%. This figure, however, is the biggest of Tesla by far. He also noted that, “a soft delivery result could turn attention back to the currently challenging fundamental environment for Tesla”.
This year, Tesla stock has been regarded as among the worst performers on S&P 500 since it has lost a quarter of its value. This was despite the prediction of Musk in April that the company would be able to increase its sales. Musk has already slashed production costs through layoffs.
