Tesla’s sales rose 5 percent in the first three months of the year after it cut prices for its electric cars, helping offset slowing economic growth and rising interest rates.
Tesla said Sunday that it delivered almost 423,000 vehicles from January to March, up from 405,000 in the last quarter of 2022.
The company delivered 310,000 vehicles in the first quarter of 2022. The 36 percent increase over the previous year “indicates that demand for EVs remains strong, with Tesla the safe choice among EV buyers,” it said. Ben Rose, president of Battle Road Research.
“While it is difficult to determine the precise impact of the recent price cuts and tax credits,” Rose said in an email, “both act as tailwinds for the company.”
All automakers are dealing with a sales drag from rising interest rates, which add to the cost of monthly car payments. But Tesla’s sales numbers could disappoint some investors who had expected sales to top 430,000 vehicles in the quarter.
Tesla, which dominates electric vehicle sales in the United States, has regained some of the credibility among investors it lost during a tumultuous 2022, when Elon Musk, the automaker’s chief executive, got sidetracked by the Twitter acquisition. Tesla shares are up 90 percent year to date, though they are still worth about half of what they were in November 2021.
In the United States, Tesla was among the main beneficiaries of changes to the federal tax credits available to buyers of electric cars. Last year, Democrats removed a limit on the number of vehicles from a given manufacturer that qualified for the $7,500 credit. Tesla had used up its quota, but in January purchases of its two most popular cars regained eligibility for the $7,500 tax credit.
The tax credit rules will tighten on April 16, requiring companies to purchase battery components and minerals from the United States or its allies. Tesla has told buyers that its least expensive version of the Model 3 sedan, which uses a Chinese-made battery, will no longer receive full credit.
But Tesla is probably ahead of competitors like Ford Motor in meeting the requirements for other models.
Tesla has also been able to ramp up production at new factories near Austin, Texas, and on the outskirts of Berlin, cutting the time customers have to wait for cars. Tesla said in March that the Berlin factory increased its production capacity to 5,000 cars a week.
Investors remain concerned about Tesla’s sales in China, where it faces intense competition from domestic competitors such as BYD. Tesla did not provide a breakdown of sales in China or other regions in a Press release on Sunday.
And Tesla’s ability to dominate the US market will be tested this year as established automakers introduce new electric models. General Motors plans to start selling three new electric cars in 2023, including a sport utility vehicle with a base price of around $30,000 and a pickup truck starting at around $40,000, both cheaper than Tesla’s most affordable car, which starts at around $43,000.
Mr Musk has promised that the company’s long-delayed Cybertruck will go on sale before the end of the year. But mass production of the futuristic-looking truck won’t begin until 2024. Until then, Tesla won’t have offerings in one of the most popular segments in the United States.
