Tesla, the world’s top-selling electric vehicle brand, said it delivered a record 466,140 sedans and crossovers in the second quarter aided by steep price cuts. The results topped analysts’ expectations.
Led by deliveries of new battery-powered Model Ys and 3s, totaling 446,915 units, the overall sales figure was lifted by 83% from a year ago and 10% from 2023’s first quarter, Tesla’s previous high. Production at the Austin, Texas-based company’s four auto-assembly plants rose 86% from a year ago to 479,700 vehicles.
Analysts that cover Tesla expected deliveries of about 448,000 units. Led by billionaire CEO Elon Musk, the company doesn’t provide delivery or production details by global region, making it difficult to tell where demand for its vehicles is highest. North America likely accounted for the biggest share of deliveries during the quarter, followed by China, Europe and the rest of the world, Deutsche Bank equity analyst Emmanual Rossner wrote in a research note last month.
“Price cuts implemented early in 2023 have paid major dividends for Musk & Co. as demand appears to remain very strong and production efficiencies have allowed for the massive deliveries beat this quarter,” Wedbush analyst Dan Ives said in a research note on Sunday. “Overall, we believe Tesla is still on track to hit its 1.8-million-unit delivery bogey for the year with this performance.”
Sales have grown steadily over the past year owing to the ramping up of new plants in Berlin and Austin that opened in early 2022. Tesla is also preparing to build its first plant in Mexico and is considering expanding its manufacturing footprint to India.
The company slashed prices for its top-selling Model Y crossover and Model 3 sedan to help both qualify for $7,500 federal tax cuts, making both products more affordable than they’ve ever been.
The strong quarterly delivery figures come on the heels of recent downgrades of Tesla shares by equity analysts who believe it’s risen too quickly in recent months and in light of growing competition in the EV market, particularly in China where domestic rivals such as BYD continue to gain market share.
Chinese automakers “are the first that may have a shot at disrupting the way investors view Tesla’s EV dominance,” Morgan Stanley analyst Adam Jonas said in a note last month, downgrading the shares to the equivalent of a hold rating from a buy. “Although we acknowledge that there are many factors contributing to Chinese OEMs gaining share in their home market (incentives, increased capacity from multiple players, etc), Tesla has been losing share in China since the peak in 2020. Our message is that investors should get comfortable with Tesla sharing the EV sandbox with China in the quarters and years to come.”
Tesla said it will release financial results for the quarter on July 19, with a conference call with analysts and inventors to follow.