Tesla Sales Slow as the Pandemic Hobbles Production

Tesla Sales Slow as the Pandemic Hobbles Production

Tesla said on Saturday that car supplies fell 18 percent from April to June from the first quarter of the year, a dramatic slowdown for the company due to production problems in China.

Tesla sells more electric cars than any other company and, more recently, was expanding rapidly in China, Europe and the United States as rising gasoline prices increased battery power. The company withstands supply chain upheavals better than its competitors. General Motors and ToyotaBoth reported a sharp drop in sales on Friday.

There is a huge demand for cars, especially electric cars, but the lack of semiconductors and other key components is forcing buyers to wait months for delivery.

Tesla Provided more than 254,000 vehicles. 310,000 in the quarter compared to 310,000 in the first quarter. This was the first quarterly decline since the start of 2020, when epidemics began in car sales around the world.

Tesla suggested on Saturday that deliveries could be restored in the coming months by overcoming supply chain problems, saying it had built more cars in June than at any time in its history.

The shutdown and shortage of epidemiological components at the company’s factory in Shanghai halted work. China has the world’s largest car market and accounts for about 40% of Tesla’s sales.

Production in China was “a complete disaster in April and May,” Daniel Aves and John Kitsingress, analysts at Wadebush Securities, said in a note to investors last week.

Despite the slowdown in delivery, Tesla is still performing better than other carmakers. Compared to the first quarter of 2021, Tesla’s shipments grew by 26%. That’s much better than General Motors, which said Friday that U.S. delivery of its new vehicles fell 15 percent in the second quarter from a year earlier. Similarly, Toyota Motor reported a 23% decline in US sales.

Tesla has more orders than it can fill, but demand could fall if the global economy crashes faster. Elon Musk, Tesla’s chief executive, warned in an interview. Bloomberg News In June, the recession was “inevitable at some point” and “not very likely” to come soon. He told staff that the company would. Cut 10% Of its paid workforce.

Tesla does not appear to have matched its growth since last year, when deliveries rose 90 percent to 940,000 cars. Wedbush analysts say a 50% increase for 2022 is more realistic.

That, he said in a note on Saturday, is still an “impressive achievement” considering that China was “basically shut down for two months.”

The slow growth rate is a factor that has hurt investors. Take a look at the possibilities of dominating Tesla’s car business.. Shares of Tesla fell more than 40% from their peak in November, with more and more buyers opting for electric cars because of their high energy efficiency.

Depending on local utility rates, an electric car costs significantly less than a fossil fuel vehicle. According to the Environmental Protection Agency, the standard range of the Tesla Model 3 is 142 miles per gallon and costs $ 450 annually on fuel. In comparison, the Honda Accord with gasoline engine travels 33 miles per gallon and spends $ 2,200 a year on fuel.

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