Tesla electric car sales fell from July to September after the company halted production at some factories to upgrade assembly lines.
The company delivered 435,000 vehicles worldwide in the third quarter, up from 466,000 in the second quarter. Wall Street analysts had expected the drop, which they attributed to a slowdown in production as Tesla retooled factories in the United States and China.
The decline “was caused by planned downtime for factory upgrades,” Tesla said in a statement Monday, adding that it still expects to deliver 1.8 million vehicles this year, down from 1.3 million in 2022.
Still, the drop in sales may renew concerns that demand for Tesla cars is declining even after the company cut prices. In China, Tesla is trying to fend off Chinese automakers such as BYD and Nio, which are launching new models more quickly.
In the United States, Tesla faces increasing competition from established automakers such as Ford Motor, General Motors, Hyundai and Volkswagen. They have been undermining Tesla’s dominance; The company accounted for about 60 percent of the electric vehicle market in the second quarter.
Another new competitor is Rivian, which said Monday that it delivered 15,600 electric vans, pickup trucks and sport utility vehicles in the third quarter, up from 12,600 the previous quarter. Although Rivian is much smaller than Tesla, its trucks pose a competitive threat to Tesla’s Cybertruck truck. Tesla CEO Elon Musk has said the Cybertruck will go on sale by the end of the year.
Tesla significantly reduced prices on all of its models this year to fend off competition and keep its sales growing at a rapid pace. As a result, its profit margin has fallen sharply, although it is still higher than that of more established automakers.
Most recently, the company slowed or stopped production at its Austin, Texas, factory to prepare for production of the Cybertruck. In China, Tesla halted some production while it shifted assembly lines to an upgraded version of its Model 3 sedan known as the Highland.
On an annual basis, Tesla continued to grow faster than traditional automakers. Sales grew 26 percent from the third quarter of 2022, when Tesla delivered 344,000 vehicles.
Tesla could also benefit from the United Automobile Workers’ strike against Ford, GM and Stellantis, the owner of Jeep, Ram and Chrysler. Much higher wages for unionized workers at Detroit automakers would widen Tesla’s cost advantage. Tesla workers do not belong to the UAW, although the union has said it plans to try to organize them.
