Tesla Hits Record Number of Deliveries in Q1 After Steep Price Cuts
Tesla hit record deliveries in the first three months of the year after slashing prices on its most popular electric vehicles in January.
The company produced 440,808 vehicles and delivered 422,875 to customers—up 36% from this time last year. Tesla conducts all sales online, making deliveries the closest proxy for sales.
In January, Tesla dropped prices by as much as 20%. The base Model Y, for example, is now $54,990 instead of $65,990—$11,000 cheaper for the same vehicle. These price cuts fueled record EV sales in the broader US in January as well, with EVs making up 7.1% of new US car sales. The Model Y was the top seller.
Despite the discounts, deliveries only rose a modest 4% compared to last quarter. Wall Street analysts were expecting about 10,000 more deliveries than Tesla achieved, Reuters reports(Opens in a new window).
"If they wouldn't have done the price cut, it would have been ugly. I think what it tells you is the economy is getting tough," Gene Munster, managing partner at Deepwater Asset Management, tells Reuters. "They showed an acceleration, but they didn't accelerate to the level that Elon had suggested it would."
Looking model by model, Tesla delivered 6% more of the Model 3 and Model Y than last quarter. But its higher-end vehicles, the Model X and Model S, slumped by 38%.
A tough economy and increased competition may be to blame. Ford, Chevrolet, Rivian, Kia, and many other brands now offer electric vehicles, some of which are even cheaper than the base Model 3. Tesla's market share dropped from 74% in January 2022 to 57% in January 2023.
Tesla still sells far more EVs than other brands, though Musk will need to find a way to keep sales steady without continual price cuts that eat into margins
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