Tesla said on Sunday that it delivered 422,875 electric vehicles in the first quarter of 2023, beating Wall Street estimates of around 420,000 units. The company produced 440,808 vehicles in the same period.
The delivery and production numbers are record results for the electric vehicle maker. In the fourth quarter of 2022, Tesla delivered 405,278 and produced 439,701 units. Those fourth-quarter deliveries were also record results, but they fell short of Wall Street expectations.
It appears that a large percentage of the deliveries came from vehicles produced by Tesla’s gigafactory in Shanghai. The automaker has been posting price cuts in all markets, including China, where the most recent discounts have caused a price war between competitors. The result is an increase in Tesla’s sales in China since last year, suggesting the East Asian country is helping boost Tesla’s global delivery numbers.
Tesla does not break out its delivery and production numbers by region, but according to data from the China Passenger Car Association (CPCA), Tesla collectively sold 140,453 Chinese-made vehicles in January and February. The CPCA has not yet released the March data. If Tesla’s March deliveries in China match the February figures, it would mean that more than 50% (or nearly 215,000) of Q1 deliveries came from Shanghai.
Tesla Q1 2023 production and delivery figures. Image credit: Tesla, via screenshot
Tesla began cutting prices for its electric vehicles in China in October. Most recently, Tesla again cut prices on the Model 3 and Y there in January for between 6% and 13.5%, adding fuel to the fire of a price war in the country. Rivals Xpeng and Nio, as well as international brands such as Volkswagen and Mercedes-Benz, have also cut their prices to compete with Tesla cars, which are now up to 14% cheaper than last year. In some cases, they are almost 50% cheaper than in the US and Europe.
The automaker has mirrored similar price cuts in Europe, Mexico and the US in recent months. This year, Tesla reduced the prices of Model Y and Model 3 vehicles in the US by up to 20%, and Model X and Model S vehicles by up to 9%. Tesla last week also relaunched its European referral program to try to boost sales before the end of the quarter.
Tesla’s stock price rose 6.24% on Sunday (after-hours) following the automobile manufacturer quarterly production and delivery results.
Tesla needed a strong result after a volatile past few months in trading. In late 2022, Tesla’s stock price plunged amid CEO Elon Musk’s Twitter review. Investors were also concerned last year that the many discounts Tesla implemented in all markets, including a $7,500 discount for US buyers who received delivery before the end of the year, could signal low customer demand.
During Tesla’s fourth-quarter 2022 earnings call in January, Musk tried to reassure investors that demand actually exceeded production. At the time, Tesla acknowledged that price declines and the general inflationary environment could affect the company’s near-term auto margins, but that the company said it is more focused on its operating margin.
We’ll know more about how the global price decline has affected overall business when Tesla reports first-quarter earnings on Wednesday, April 19. Late last year, Tesla said it expects to stay ahead of the 50% compound over the long term. annual growth rate with about 1.8 million cars for the year.
