# Tesla posts record quarterly deliveries after price cuts, up 4% from Q4
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2023-04-03
Category: NEWS
Category URL: https://financedigest.com/category/news
Meta Title: Tesla 1st Quarter Deliveries Hit Record High Amid
Meta Description: Despite record deliveries, Tesla faces modest growth and price wars due to stiff competition and economic challenges. Find out more here.
URL: https://financedigest.com/tesla-posts-record-quarterly-deliveries-after-price-cuts-up-4-from-q4html

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By Akash Sriram and Hyunjoo Jin

(Reuters) – Tesla Inc on Sunday posted record quarterly vehicle deliveries, but quarter-on-quarter sales growth was modest despite price cuts as rising competition and a bleak economic outlook weighed.

Tesla delivered 422,875 vehicles for the first three months of this year, up 4% from the previous quarter. This was 36% higher than a year ago. In January, Chief Executive [Elon Musk](https://www.financedigest.com/elon-musk-and-others-urge-ai-pause-citing-risks-to-society.html "Elon Musk and others urge AI pause, citing ‘risks to society’") said Tesla could achieve 2 million vehicle deliveries this year, up 52% from last year.

[Investors have been watching Musk’s gamble that cutting prices](https://www.financedigest.com/oil-prices-steady-as-news-of-saudi-russia-meeting-calms-investors.html "Oil prices steady as news of Saudi, Russia meeting calms investors") would stimulate sales, although they worry about eroding margins.

In January, Tesla slashed prices globally by as much as 20%, unleashing a price war after missing [Wall Street](https://www.financedigest.com/weary-wall-street-cheers-improved-consumer-confidence.html "Weary Wall Street cheers improved consumer confidence") delivery estimates for 2022. The basic [Model Y that used to sell](https://www.financedigest.com/this-is-the-best-week-for-cash-savvy-iphone-fans-to-sell-their-6s-models.html "This is the best week for cash-savvy iPhone fans to sell their 6s models") for $65,990 now costs $54,990.

If they wouldn’t have done the [price cut](https://www.financedigest.com/tesla-cuts-u-s-model-s-and-model-x-prices-between-4-and-9.html "Tesla cuts U.S. Model S and Model X prices between 4% and 9%"), it would have been ugly. I think what it tells you is the economy is getting tough,” Gene Munster, managing [partner](https://www.financedigest.com/exclusive-crypto-giant-binance-moved-400-million-from-u-s-partner-to-firm-managed-by-ceo-zhao.html "Exclusive-Crypto giant Binance moved 0 million from U.S. partner to firm managed by CEO Zhao") at Deepwater Asset Management, said on Sunday.

“They showed an acceleration, but they didn’t accelerate to the level that Elon had suggested it would.”

Musk, who has missed his own ambitious sales targets for Tesla in recent years, said in January that 2023 deliveries could hit 2 [million vehicles](https://www.financedigest.com/sainsburys-pays-524-million-for-full-ownership-of-store-investment-vehicles.html "Sainsbury’s pays 4 million for full ownership of store investment vehicles"), absent external disruption, from 1.3 million in 2022.

The first-quarter deliveries compare with analyst expectations of 430,008 vehicles, [according to Refinitiv data](https://www.financedigest.com/most-sales-and-marketing-teams-struggle-to-activate-data-in-their-organisation-according-to-new-international-study.html "Most Sales and Marketing teams struggle to activate data in their organisation, according to new international study") based on seven analysts.

According to a mean of estimates compiled by FactSet as of Friday, Wall Street was [expecting Tesla to report deliveries of around](https://www.financedigest.com/around-40-of-german-companies-expect-output-decline-in-2023-iw-institute.html "Around 40% of German companies expect output decline in 2023 – IW institute") 432,000 vehicles for the quarter, the Wall Street Journal and CNBC reported.

Tesla [missed the figure analysts surveyed by Refinitiv and FactSet were expecting](https://www.financedigest.com/ericssons-quarterly-core-profit-misses-expectations.html "Ericsson’s quarterly core profit misses expectations"). Other estimates show Tesla beat [Wall Street](https://www.financedigest.com/asian-stocks-edge-up-before-u-s-jobs-data-defying-wall-street-selloff.html "Asian stocks edge up before U.S. jobs data, defying Wall Street selloff") expectations with its 422,875 vehicles delivered.

Analysts [surveyed by Bloomberg expected](https://www.financedigest.com/ecb-survey-shows-rising-inflation-expectations-despite-energy-price-falls.html "ECB survey shows rising inflation expectations despite energy price falls") 421,164 vehicles would be shipped.

Tesla said consensus of more than 20 analysts called for 421,500 vehicles delivered, Tesla investor Gary Black said in a tweet. Reuters could not independently confirm that figure.

The consensus is “all over the place,” Munster said.

Tesla delivered 6% more of its mainstay Model 3/Model Y vehicles in the first three [months of this year](https://www.financedigest.com/independent-study-finds-infinidat-storage-can-provide-customers-125-roi-over-three-years-and-payback-in-less-than-six-months.html "Independent Study Finds INFINIDAT Storage Can Provide Customers 125% ROI Over Three Years and Payback in Less than Six Months") than in the previous quarter. But the number of deliveries for its higher-priced Model X/Model S vehicles slumped by 38%.

The carmaker produced more cars than it delivered, [manufacturing 440,808 vehicles for the first three months](https://www.financedigest.com/spanish-manufacturing-output-down-for-6th-straight-month-in-dec-pmi.html "Spanish manufacturing output down for 6th straight month in Dec -PMI") of this year.

The automaker ramped up production at new factories in Texas and Berlin, and as [China production recovered from a COVID-19 lockdown hit](https://www.financedigest.com/asia-shares-weigh-china-risks-yen-hits-6-month-high.html "Asia shares weigh China risks, yen hits 6-month high"). Tesla tweeted on Sunday that its Texas factory built 4,000 Model Y this week, while the automaker said in late February that its [German plant was producing 4,000 cars](https://www.financedigest.com/stellantis-to-invest-130-million-euros-in-german-plant-for-new-opel-electric-car.html "Stellantis to invest 130 million euros in German plant for new Opel electric car") per week.

MORE [PRICE CUTS](https://www.financedigest.com/carrefour-unveils-30-euro-shopping-basket-in-spain-after-government-price-cut-proposal.html "Carrefour unveils 30 euro shopping basket in Spain after government price cut proposal")?

Barclays analyst Dan Levy expected Tesla may be [pressured to lower prices](https://www.financedigest.com/oil-prices-dip-on-u-s-crude-reserve-release-inflation-pressure.html "Oil prices dip on U.S. crude reserve release, inflation pressure") further as many automakers have matched the cuts and concerns about a weakening economy persist.

Tesla did not immediately respond to Reuters’ questions about whether further cuts are in store.

Further clouding the [demand outlook](https://www.financedigest.com/lights-maker-signify-cuts-annual-outlook-on-lower-consumer-demand-china-woes.html "Lights maker Signify cuts annual outlook on lower consumer demand, China woes") are U.S. [electric vehicle](https://www.financedigest.com/tax-credits-for-eu-electric-vehicles-to-dominate-mondays-trade-talks-with-u-s.html "Tax credits for EU electric vehicles to dominate Monday’s trade talks with U.S") subsidies, which may fall on some models starting on April 18.

[Tesla’s cuts in China ignited a price](https://www.financedigest.com/tesla-expands-discounts-with-price-cuts-in-europe-singapore-israel.html "Tesla expands discounts with price cuts in Europe, Singapore, Israel") war, with Chinese rivals including BYD and Xpeng dropping prices to defend market share amid weakening demand.

Market leader BYD accounted for 41% of so-called new energy [car sales in the world’s](https://www.financedigest.com/top-luxury-car-brands-in-the-world.html "Top luxury car brands in the world") biggest auto market for the first two months of the year. Tesla, by contrast, had a share of 8%.

Musk warned that the prospect of recession and [higher interest rates meant the EV maker could lower prices to sustain growth at the expense of profit](https://www.financedigest.com/polish-e-commerce-firm-allegro-eyes-higher-q1-profit.html "Polish e-commerce firm Allegro eyes higher Q1 profit"). In January, [Musk said the price cuts had stoked demand](https://www.financedigest.com/musk-says-tesla-price-cuts-triggered-demand-2023-sales-could-hit-2-million-vehicles.html "Musk says Tesla price cuts triggered demand, 2023 sales could hit 2 million vehicles").

Tesla shares have soared more than 68% this [year on hopes the company would win the price](https://www.financedigest.com/germany-home-prices-to-sink-nearly-6-this-year-reuters-poll.html "Germany home prices to sink nearly 6% this year – Reuters Poll") war it started, although the stock remains more than 50% below its November 2021 peak.

Shares have fallen since Tesla’s [investor day on March](https://www.financedigest.com/uk-investors-add-1-2-billion-to-equity-funds-in-march-calastone.html "UK investors add .2 billion to equity funds in March – Calastone") 1 when Musk said little about how soon the EV maker might launch a more affordable, mass-market vehicle.

(Reporting by Akash Sriram and Urvi Dugar in Bengaluru and Hyunjoo Jin in [San Francisco; Editing by Lisa Shumaker)](https://www.financedigest.com/paul-jasper-joins-rimon-laws-san-francisco-office-as-partner.html "Paul Jasper joins Rimon Law’s San Francisco Office as Partner")


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