Tesla’s First Quarter Losses Mount as Sales Slower than Expected [News]

[Photo: Tesla]

Tesla’s sales slump 21 percent from projected consensus; losses continue to mount

Car sales have slowed down across the industry, after years of gains and records on the books. Tesla has been a leader among electric car sales for the past several years. However, the company’s quarterly figures haven’t matched projections among experts in the field. According to a source close to TFLcar, Tesla’s sales totaled 29,980 in the first quarter of 2018. Compared to Q4 2017 sales of 29,967, that’s a marginal increase. As it stands, projections slated Tesla making between 38,000 to 42,000 units, driven by deliveries of the Model 3. Due to production slowdowns with the company’s newest model, sales haven’t quite measured up to those original projections.

Tesla Model 3 Production

Deliveries of the Tesla Model 3 have shifted to later dates, according to a recent Bloomberg Report. Our source points out Tesla delivered 8,180 units last quarter, per their recently released quarterly sales results. Those close to the action figured the company would shift 13,800 units last month as production picked up, but it was not to be. In fact, last month’s sales slumped 40% from those projections. Model 3 production is picking up, however, as the company built 2,020 Model 3s in the past week. Tesla’s preliminary first quarter results show the Model 3 is still on target to hit 5,000 units per week by June. So while the results were lower than expected, the trend is moving upward.

Tesla's first quarter 2018 sales weaker than expected
[Photo: Tesla]

Model S and X sales plateau

So how about the Model S and Model X? Demand for both of these models have dropped as the Model 3’s sales have increased. Tesla delivered 11,730 units in the first three months of 2018 – a 13% drop over last year. The Model X also dropped by an equal amount, with 1o,070 examples seeing their way to waiting customers. Not only that, but cars in transit – those on their way to customers, also decreased over the past quarter compared to the first months of 2017.

In the main, what does this all mean? Tesla, like any other automaker, needs to shift units to survive. While the Model 3 is gaining some momentum, it needs to hit its production targets to stay afloat. In the last quarter of 2017, they posted a $675 million loss. Model 3 production numbers are going up, but the company is currently running on a negative gross margin – meaning they’re losing money on each car they sell at this point. By contrast, the Model S and X are making a positive gross margin, but Tesla’s not selling as many units.

Our source estimates Tesla’s losses will amount between $800 million and $900 million for the first quarter of 2018. Still, stocks were up 5% in light of the preliminary results of the Model 3 gaining traction in production, trading around $266 a share. We should see full sales results soon. Stay tuned to TFLcar.com for more updates!

In the meantime, check out the images below of Tesla’s latest impending model, the upcoming Roadster [Photo credit: Tesla]