Tesla’s quarterly vehicle deliveries rose for the first time this year, giving the company some welcome good news after a bumpy road that nonetheless left investors underwhelmed.
Elon Musk’s electric car company delivered 462,890 vehicles in the third quarter, a 6.4% increase over the same period last year. Price cuts and offers of free charging for new owners helped drive sales, and the company was free of production issues that had dragged down delivery numbers last year.
Although the results were more or less in line with analysts’ expectations, investors were unimpressed. Tesla shares were trading at about $249 on Wednesday afternoon, down more than 3% for the day.
Shareholders and Tesla executives alike hope the increase in deliveries marks a turning point for a company that has struggled this year.
The third-quarter increase in deliveries was “good and a step in the right direction,” wrote Dan Ives of Wedbush. Ives cautioned that there would be pressure on the company’s stock because investors had been hoping for even better.
“Overall, this is a clear improvement from the first half and we believe getting in the range of 1.8 million [vehicles delivered] for the year is still the key,” Ives said.
Tesla sales fell early in 2024 amid flagging demand and an increasingly competitive electric vehicle market, in which newer companies such as Rivian are giving buyers more options at varying price points. Traditional vehicle makers such as Hyundai and Ford have also released lines of electric options, crowding the market further.
Electric vehicle sales are down in California after years of growth, a trend that has hit Tesla particularly hard. The number of all-electric cars registered in the state dropped from 102,730 in the second quarter of 2023 to 101,443 over the same period in 2024, a 1.2% decrease. As recently as summer 2023, the growth rate of the number of all-electric cars in the state was 55%.
Consumer concerns over range, charging time and ability to complete long trips have contributed to faltering sales of electric vehicles even as Tesla has lowered its prices. Analysts estimated that Tesla’s average vehicle sales price was $42,500 in the third quarter this year, the lowest price in four years.
A large portion of Tesla’s sales come from its least expensive models, 3 and Y, indicating a consumer focus on price point. The company sold only 22,915 of its more expensive models in the third quarter, including Models X and S and the Cybertruck.
Musk’s company got a boost this quarter, however, from a Chinese government incentive program that encouraged drivers to trade in older vehicles for electric models. Tesla has also been in the spotlight for Musk’s highly anticipated robotaxi, which is scheduled to be unveiled at an event next week.
The Associated Press contributed to this report.
