Tesla posted record quarterly vehicle deliveries on Sunday, but quarter-on-quarter sales growth was modest despite price cuts due to increased competition and a grim economic outlook.
The electric carmaker delivered 422,875 vehicles during the first three months of this year, up 4% from the previous quarter. This was 36% higher than a year ago. In January, CEO Elon Musk said Tesla could achieve 2 million vehicle deliveries this year, up 52% from last year.
Investors have been watching Musk’s bet that cutting prices would spur sales, though they worry about eroding profit margins.
In January, Tesla slashed prices globally by up to 20%, sparking a price war after missing Wall Street delivery estimates for 2022. The base Model Y used to sell for $65,990 (£53,500). it is now $54,990.
“If they hadn’t done the price cut, it would have been ugly. I think what it tells you is that the economy is getting tough,” said Gene Munster, managing partner at Deepwater Asset Management.
“They did show acceleration, but not to the level that Elon had suggested it would.”
Musk, who has fallen short of his own ambitious sales targets for Tesla in recent years, said in January that 2023 deliveries could reach 2 million vehicles, without external disruption, from 1.3 million in 2022.
Analysts had expected 430,008 vehicle deliveries, according to Refinitiv.
Tesla delivered 6% more of its flagship Model 3/Model Y vehicles in the first three months of this year than in the previous quarter. But the number of deliveries of its highest-priced Model X/Model S vehicles plummeted 38%.
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The automaker ramped up production at new factories in Texas and Berlin, and as China production recovered from the Covid-19 lockdown hit. Tesla tweeted Sunday that its Texas factory made 4,000 Model Y vehicles this week, while the automaker said in late February that its German plant was making 4,000 cars a week.
Barclays analyst Dan Levy said Tesla could come under pressure to cut prices further as many automakers have matched the cuts amid lingering concerns about a weakening global economy.
