Tesla’s price cuts seem to have worked, as it set new quarterly records through March 31.
Electric car share continues to grow quarter-over-quarter, and Tesla remains at the front of the sales pack. The automaker reported record production and delivery numbers, totaling nearly 441,000 and 423,000 vehicles respectively.
While Tesla only groups sales by its large cars (Model X/S) and small cars (Model Y/3), its less expensive models proved explosively popular in the first three months of 2023. According to figures it published Sunday, Tesla produced 421,371 examples of the Model 3 and Model Y. Of those, it delivered 97.8% to customers, or 412,180 vehicles.
As for the Model X and Model S, Tesla produced 19,437 vehicles and delivered 10,695.
On its face, it seems the substantial price cuts the company rolled out in January did indeed boost demand. That said, we will have to wait until Tesla announces its financial results to see whether the higher demand offset the lower prices, especially for its less expensive models. While it did raise prices again after the initial 20% cut, they’re still lower than they were at the end of 2022.
Tesla will announce its full financial results during an earnings call on April 19.
The EV automaker still faces headwinds with shareholders, regulators
Even with the record-setting numbers, though, shareholders seem to be worried about margins related to the price cuts. As such, stock prices actually dropped 7% in Monday trading, after Tesla announced production outpaced deliveries. Also despite the higher output, the manufacturer fell short of analysts’ expectations, which averaged 432,000 deliveries by Friday, March 31.
Tesla still faces regulatory scrutiny, too. Multiple investigations into the company are underway, including whether its Autopilot and Full Self-Driving software is responsible for recent high-profile crashes, and whether there are serious issues with vehicles’ seat belts and steering wheels. It’s Semi truck also had some issues, including a recall due to parking brake problems.
Moving forward, its unclear whether the Treasury Department’s updated guidance on the $7,500 federal tax credit will also impact Tesla’s sales. With new rules going into effect April 18, the rear-wheel drive Model 3 will no longer qualify for the full credit.