Tesla shares sink as car deliveries drop

Some of Tesla's Model 3 cars were delayed entering ChinaImage copyright
Getty Images

Image caption

Some of Tesla’s Model 3 cars were delayed entering China

Tesla’s share price closed down 8.2% after the electric carmaker warned on profits following a 31% drop in vehicle deliveries during the first quarter.

The firm blamed problems with shipments to Europe and China, where it began selling its Model 3 car for the first time.

Total deliveries hit 63,000 in the three months to March, below analysts’ forecasts which had already been cut.

Tesla now expects quarterly profits to be “negatively impacted”.

The company encountered problems shipping the Model 3 to China in March after customs authorities suspended clearance because of misprinted labels on certain cars.

Tesla also saw shipments disrupted in Europe following strike action at the port of Zeebrugge, where its vehicles are delivered before being distributed to a number of countries in the EU.

Image copyright
Getty Images

Image caption

Tesla chief executive Elon Musk

Tesla said that it had only delivered half the entire quarter’s vehicles by 21 March, and that 10,600 cars were still “in transit” at the end of the quarter.

The carmaker’s shares dropped nearly 9% in early trading in New York to $265.9 each.

‘Very disappointing’

Analysts had expected Tesla to deliver 82,000 vehicles between January and March, but this was then reduced to 71,350.

In the fourth quarter, Tesla delivered 90,700 cars.

The Model 3 is key to Tesla’s future. It is the company’s lowest-priced car and Tesla is building a manufacturing site in China which will allow it to cut shipment costs.

Image copyright

However, analysts were also spooked by a sharp fall in deliveries of Tesla’s Model S and Model X vehicles.

In the fourth quarter, Tesla delivered 13,500 Model S models and 14,050 Model Xs.

But in the first quarter, that dropped to a combined 12,100 cars, which analysts at banking group RBC said was “very disappointing”.

Meanwhile. lawyers acting for Elon Musk will appear in a court on Thursday to argue that Tesla’s chief executive did not violate the terms of a fraud settlement with the US Securities and Exchange Commission (SEC) when he tweeted about car production numbers in February.

The SEC is asking that Mr Musk be held in contempt of court for allegedly violating an agreement which restricted his use of social media to talk about Tesla.

It followed a tweet last August by Mr Musk that he could take Tesla private for $420 per share.

In a subsequent tweet, Mr Musk said he expected Tesla to produce 500,000 cars this year.

He argues that the figure was already revealed in a conference call with analysts and did not violate the agreement.

Source link

Leave a Reply