Tesla’s quarterly deliveries up 6% but miss expectations

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Tesla’s quarterly vehicle deliveries fell short of market expectations, damping hopes for a robust rebound on the back of a recovery in Chinese car demand.

The company delivered 462,890 vehicles globally in the three months to September, up 6.4 per cent from a year earlier. The increase was the first this year but missed Wall Street expectations for 463,000 vehicles. That pushed down its shares by more than 6 per cent on Wednesday.

However Tesla retained its position as the top electric-vehicle maker. This week, China’s BYD reported that third-quarter deliveries of EVs totalled 443,426 — a 2.7 per cent rise from the previous year.

The gain in battery-powered cars was modest for BYD but the group reported a 75.6 per cent increase in the sales of plug-in hybrids after it unveiled its latest hybrid technology in May.

Growth in EV sales has slowed globally but prospects in China, the world’s largest car market, have improved after Beijing in July doubled the subsidies offered to consumers who switched from a petrol vehicle to an EV or a plug-in hybrid.

In recent weeks, analysts said there was a growing enthusiasm among investors that a boost in Chinese demand would allow the Austin-based company to beat market expectations, creating a positive momentum.

For much of the past two years, Tesla has wrestled with increased competition from the cheaper EV offerings from Chinese rivals, forcing it to slash prices on some of its models including lease prices.

Mercedes-Benz and Porsche have also recently warned of lower than expected profits as sales of luxury cars in China have been hit by sluggish consumer spending.

Barclays analyst Dan Levy said in a note that the miss in deliveries appeared to have been led by weakness in its premium Model S and X vehicles as well as the Cybertruck, an off-roader that was launched last year.

The rising expectations for higher deliveries had also come as Tesla prepared to unveil its first “robotaxis” — a fleet of self-driving taxis — next week in an event Elon Musk described as “one for the history books”.

Musk has made a radical strategic pivot towards autonomous driving, artificial intelligence and robotics, telling investors that these technologies would be Tesla’s main revenue sources and drive up its valuation.

But there are concerns over how and when the company will monetise its self-driving offering with uncertainties around the technology itself, insurance coverage, vehicle cost as well as the regulatory environment.

Tom Narayan, an analyst at RBC Capital Markets, said it made little sense for shares to drop sharply on the delivery figures alone.

“While we do think it is important for Tesla to sell cars to increase its fleet size to sell full self-driving, whether it beats consensus estimates by a few thousand vehicles or not, says little about the true value of this company,” he wrote in a report.