Tesla’s sales from April to June fell to their lowest quarterly level since last autumn as supply chain issues and pandemic restrictions in China hobbled production of its electric vehicles.
The company on Saturday disclosed it sold more than 254,000 cars and SUVs from April until June – an 18% drop from the first three months of this year and well below the pace in last year’s final quarter.
The last time Tesla sold fewer vehicles globally was in the third quarter of 2021 when it delivered 241,000.
On Friday, the rest of the industry reported a 21% drop in sales during the second quarter as the average price for vehicles rocketed to a record of 45,844 US dollars (£37,872) amid soaring inflation, according to JD Power.
Tesla’s sales drop may be a harbinger of weaker second-quarter earnings for the Texas company, which is the world’s top seller of battery-powered vehicles and has posted net profits for nearly three years.
Tesla plans to release its full results for the April-June period on July 20.
Like many other stocks, Tesla shares have been hard hit this year.
But the 35% decline in Tesla’s stock price has not been entirely tied to the company’s see-sawing fortunes.
Tesla CEO Elon Musk has also made a 44 billion dollar (£36.4 billion) bid for Twitter, which he placed on hold after complaining it has too many spam bot users who are not humans.
Much of the erosion in Tesla’s value has occurred since Musk became Twitter’s largest shareholder and then launched a takeover bid that has raised concerns he has too much on his already crowded plate.
Musk has used his own Twitter account, which now has more than 100 million followers, to discuss the pandemic restrictions that forced the Shanghai factory to temporarily close during the quarter.
Wedbush analyst Dan Ives estimates that more than 40% of Tesla’s sales come from China, and that the Shanghai factory produced about 70,000 fewer vehicles due to the shutdowns.
But on Saturday, Tesla signalled things are getting better, saying it produced more vehicles in June than in any other month in its history.
The company did not disclose the number of vehicles made during June.
As of early Saturday afternoon, Musk had not tweeted about Tesla’s second-quarter sales.
But he created a bit of a stir late on Friday when ending an uncharacteristically long nine-day silence on Twitter.
His Friday tweets included one with him and four his children meeting Pope Francis.
Tesla’s latest delivery numbers came out a week after the release of an interview with Musk in which he described new factories in Austin and Berlin as “money furnaces” that were losing billions of dollars because supply chain breakdowns were limiting the number of cars they can produce.
In a May 30 interview with a Tesla owners’ club that was just released last week, Musk said that getting the Berlin and Austin plants functional “are overwhelmingly our concerns. Everything else is a very small thing”, adding that “it’s all gonna get fixed real fast”.
Musk has also discussed making salaried workers return to offices and a possible 10% cut in Tesla’s work force due to a possible recession.
Supply chain breakdowns since the onset of Covid-19 two years ago have been especially debilitating for car makers, who get parts from all corners of the globe.
A lack of computer chips needed to run cars’ computers compounded manufacturers’ problems and sent prices for used and new cars skyrocketing.
As the pandemic erupted in the US in 2020, car makers had to shut factories for eight weeks to help stop the virus from spreading.
Some parts companies cancelled orders for semiconductors.
At the same time, demand for laptops, tablets and gaming consoles rocketed as people stuck at home upgraded their devices.
By the time car production resumed, chip makers had shifted production to consumer goods, creating a shortage of weather-resistant automotive-grade chips.
Although Tesla has fared better than other manufacturers, the industry still cannot get enough chips.