Quiver Quantitative - Tesla Inc. (NASDAQ:TSLA) reported a miss in its third-quarter deliveries, attributing the shortfall to planned factory upgrades essential for launching an updated version of the Model 3 sedan. Despite the dip, analysts predict that these enhancements could position Tesla to compete more effectively with rivals like Ford in the U.S. and BYD in China. Deliveries for the revamped, higher-priced Model 3 are set to commence in the upcoming quarter, coinciding with the much-anticipated Cyber-truck launch event.
In total, Tesla delivered 435,059 vehicles in the third quarter, a decline of almost 7% from the prior quarter. Still, the automaker maintains its objective to hit 1.8 million vehicle deliveries for the year. This miss initially triggered a nearly 3% dip in Tesla's stock, which eventually saw a slight recovery. Amidst growing competition and a decelerating EV market, Tesla has been proactively adjusting its pricing strategy. Notably, prices for its premium Model S and Model X vehicles were slashed by up to 21% in major markets, including China and the U.S. Simultaneously, Tesla provided discounts on the Model 3 and Model Y in the U.S. and reduced Model Y prices in China, further supplementing these cuts with other incentives.
In the face of this competition, Thomas Martin, a senior portfolio manager at Globalt Investments, believes Tesla might introduce even deeper price cuts. For context, Tesla's production numbers for the third quarter stood at 430,488 vehicles, compared to 479,700 in the preceding quarter. In contrast, electric-pickup manufacturer Rivian Automotive ((RIVN) exceeded third-quarter delivery expectations and reiterated its annual production goal of 52,000 vehicles.
Despite the temporary setback, Tesla's influence in the U.S. EV market remains unparalleled for 2023. However, as Ashwin Amberkar, an analyst at Canalys Research, points out, a diversifying consumer appetite for electric vehicles may drive demand for a broader EV selection. Although Tesla's premium vehicles, the Model S and Model X, saw an uptick in deliveries to about 16,000 units for the third quarter, they represent a mere 4% of the company's overall deliveries.
This article was originally published on Quiver Quantitative