Tesla delivered 63,000 vehicles to customers in the first quarter of 2019, the company announced on Wednesday evening. That's a dramatic 31 percent decline from the previous quarter, when Tesla delivered 90,700 vehicles.
Analysts have been expecting that Tesla would announce a quarter-to-quarter decline in deliveries, but this drop exceeded Wall Street's expectations. Wall Street analysts were expecting Tesla to deliver around 75,000 cars.
Analysts expected Tesla to have a down quarter because the US tax credit for buying a Tesla was scheduled to fall from $7,500 to $3,750 on January 1. So Americans thinking about buying a Tesla late last year made sure take delivery by December 31, causing US demand to dry up in January.
To compensate, Tesla focused on overseas markets. But there was a problem.
"Due to a massive increase in deliveries in Europe and China, which at times exceeded 5x that of prior peak delivery levels, and many challenges encountered for the first time, we had only delivered half of the entire quarters numbers by March 21, ten days before end of quarter," Tesla writes. As a result, 10,600 vehicles were in transit to customers at the end of the quarter—and those cars weren't counted in Tesla's delivery stats.
Model S and X numbers massively underperformed
Delivery challenges aside, Tesla simply produced fewer vehicles in the first quarter than it did in the quarter before. Tesla says it delivered 77,100 vehicles in Q1 2019 compared to 86,555 vehicles in Q4 2018. Production of Model 3 actually rose slightly, though Tesla is still slightly below Elon Musk's long-stated goal to produce 5,000 Model 3 cars per week.
Meanwhile, production of Tesla's pricy Model S and Model X cars plunged from a combined 25,161 units in Q4 2018 to 14,150 units in Q1 2019. The numbers for deliveries of the Model S and Model X were even worse. They fell 56 percent, from 27,550 to 12,100.
It's not surprising that deliveries of the Model S and X declined relative to the Model 3. Tesla was trying to offset lower US sales with a surge in European and Chinese sales. Most of that increase naturally came from the Model 3, which only became available for sale overseas earlier this year.
Still, these numbers were a huge departure from the guidance Tesla provided less than three months ago. "We are expecting our Model S and Model X deliveries in Q1 2019 to be slightly below Q1 2018," Tesla wrote in late January. In reality, last quarter's Model S and X deliveries were less than half the 24,728 vehicles Tesla delivered in the first quarter of 2018.
And that's going to be bad for Tesla's bottom line—especially when it's coupled with Tesla's recent price cuts.
Tesla's quarterly financial results will likely be grim
Tesla began the quarter with an across-the-board $2,000 price cut to help offset the $3,750 fall in the federal tax credit. Then in February the company announced its long-promised $35,000 version of the Model 3. So Tesla not only sold fewer vehicles overall laRead More – Source