Tesla’s second-quarter sales fall due to supply chain issues and the Covid pandemic

Tesla’s April-June sales fell to their lowest quarterly level since last fall as supply chain issues and pandemic restrictions in China hampered production of its electric vehicles.

The company revealed on Saturday that it sold more than 254,000 cars and SUVs from April to June, down 18% from the first three months of this year and also well below the pace of the last quarter of the year. ‘last year.

The last time Tesla sold fewer vehicles globally was in the third quarter of 2021, when it delivered 241,000.

On Friday, the rest of the industry reported a 21% drop in second-quarter sales as the average vehicle price soared to a record $45,844 amid runaway inflation, according to JD. Power.

Tesla’s sales slump could be a harbinger of weaker second-quarter profit for the Austin, Texas-based company, which is the world’s top seller of battery-powered vehicles and has been posting net profits for nearly of three years. Tesla plans to release full results for the April-June period on July 20.

Like many other stocks, Tesla shares have been hit hard this year. But the 35% drop in Tesla’s share price wasn’t entirely related to the company’s rocky fortunes.

Tesla CEO Elon Musk also made a $44 billion bid for Twitter, which he put on hold after complaining that there were too many non-human spambot users. Much of Tesla’s value erosion has occurred since Musk became Twitter’s largest shareholder and then launched a takeover bid that raised concerns he has too much on his already crowded plate. .

Musk took to his own Twitter account, which now has more than 100 million followers, to discuss the pandemic restrictions that forced the Shanghai factory to temporarily close during the quarter. Wedbush analyst Dan Ives estimates that more than 40% of Tesla’s sales come from China and that the Shanghai plant has produced around 70,000 fewer vehicles due to the closures.

But Tesla signaled things were looking up on Saturday, saying it produced more vehicles in June than in any other month in its history. The company did not disclose the number of vehicles manufactured in June.

As of early Saturday afternoon, Musk had not tweeted about Tesla’s second-quarter sales. But he caused a stir on Friday night by ending an unusual nine-day silence on Twitter. His Friday tweets included one with him and four of his children meeting Pope Francis.

Tesla’s latest delivery numbers came out a week after an interview with Musk was published in which he described new factories in Austin and Berlin as money furnaces that were losing billions of dollars because of power outages. supply chain limited the number of cars they could produce.

In a May 30 interview with a Tesla Owners Club that was just published last week, Musk said the commissioning of the Berlin and Austin factories was a big part of our concern. Everything else is a very small thing, Musk said, but added that it would all be sorted out very quickly.

Musk also discussed the return of salaried workers to offices and a possible 10% reduction in Tesla’s workforce due to a possible recession.

Supply chain outages since the start of COVID-19 two years ago have been particularly debilitating for automakers, which source parts from all corners of the globe. The lack of computer chips needed to run car computers has compounded automakers’ problems and sent new and used car prices skyrocketing.

As the pandemic broke out in the United States in 2020, automakers had to shut down factories for eight weeks to help prevent the virus from spreading. Some parts companies have canceled semiconductor orders. At the same time, demand for laptops, tablets and game consoles has skyrocketed as people stuck at home upgrade their devices.

By the time automotive production resumed, chipmakers had shifted production to consumer goods, creating a shortage of weatherproof automotive-grade chips. Although Tesla has done better than other automakers, the industry still can’t get enough chips.

(Only the title and image of this report may have been edited by Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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