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Tesla Sales Climb But Miss Expectations

October 20, 2022

Supply shortages, logistics bottlenecks and rising costs are hitting Tesla as it rapidly ramps up production of its electric cars.

While the problems have improved in recent months, they remain immediate challenges, Tesla said in a financial update for investors.

Revenue was lower than expected in the three months ending in September, as car sales fell short of expectations.

But at $21.45bn (£19.12bn), it remained more than 50% higher than a year ago.

Tesla, led by billionaire Elon Musk, has been growing aggressively in recent years, opening new factories in the US, China and Germany and boosting output.

The company delivered 343,000 cars in the quarter - a record that was up more than 40% from the same period last year.

The firm produced more cars than were sold, raising fears that demand may be slowing, as rising prices, higher borrowing costs and a major economic slowdown in the key China market discourage buyers.

Mr Musk conceded there was weakness in China but beat back suggestions that demand was cooling.

When Tesla shared the delivery figures earlier this month, the company said the gap was due to difficulty finding vehicles to transport cars to customers.

"There weren't enough boats, there weren't enough trains there weren't enough car carriers," he said on a conference call to discuss the results, adding that the firm expects to sell every car it makes.

Deliveries of its own much anticipated electric truck are due to start in December, the firm said. The company reported $3.3bn in profit, up significantly from a year ago.

But questions about Tesla's growth path, as well as billions of dollars in stock sales by Mr Musk as he prepares a $44bn takeover of Twitter, have weighed on the company's shares in recent months.

The share price has dropped 40% this year, wiping billions of dollars off the company's value. Its shares fell a further 4% in after-market trading on Wednesday.

"I think Tesla's had a hard quarter and the market is responding to that," Sarah Kunst, managing director of Cleo Capital, told the BBC's Today programme.

"The auto industry in general right now is having a very hard time because supply chain problems persist and the batteries - particularly for electric vehicles - are hard to come by," she said.

"And the reality is that Tesla used to be the only place to go to buy a higher-end electric car and that's increasingly not the case."

Tesla dominates the electric vehicle market in the US, but it faces far more competition in Europe and China, where such cars are more popular.

In the US, rivals have also been ramping up their efforts.

German carmaker BMW said on Wednesday that it would spend $1.7bn to expand its electric vehicle production in the US.


























Source: BBC
Image source: Electrek