Due to pandemic restrictions in China and supply chain issues, Tesla sales have dropped to their lowest quarterly level
By announcing that it built more automobiles in June than in any previous month in its history, Tesla provided a sign that business is improving.
Due to production problems with its electric vehicles due to regulatory restrictions in China and supply chain concerns, Tesla’s sales from April through June were at their lowest quarterly level since last fall.
The business announced on Saturday that it sold over 254,000 vehicles and SUVs from April through June, a decrease of 18% from the first three months of this year and a significant decline from the pace in the fourth quarter of last year.
Tesla delivered 241,000 vehicles in the third quarter of 2021, which was the last time it sold less vehicles globally.
According to J.D. Power, the remainder of the sector on Friday recorded a 21% decline in second-quarter sales as the average price for vehicles soared to a record $45,844 (approximately Rs. 36,23,900) amid skyrocketing inflation.
The Austin, Texas-based business, Tesla, which is the world’s leading seller of battery-powered vehicles and has reported net profits for almost three years, may have poorer second-quarter earnings as a result of its declining sales. On July 20, Tesla intends to announce its complete results for the months of April and June.
The value of Tesla stock has suffered this year, much like many other stocks. However, the stock price decrease of 35% at Tesla isn’t solely attributable to the company’s volatile financial situation.
Elon Musk, the CEO of Tesla, also submitted a $44 billion (approximately Rs. 3,47,800 crores) bid for Twitter, which he later withdrew because he believed it had an excessive number of spam bot users. Since Musk became Twitter’s largest shareholder and then launched a takeover effort, much of the decline in Tesla’s value has occurred, raising fears that he has too much on his already full plate.
Musk has spoken about the pandemic constraints that caused the Shanghai plant to temporarily close during the quarter on his personal Twitter account, which has over 100 million followers as of right now. More than 40% of Tesla’s sales, according to Wedbush analyst Dan Ives, are made in China, and the Shanghai factory produced 70,000 fewer vehicles as a result of the shutdowns.
Tesla, though, provided a glimmer of improvement on Saturday by announcing that June was the busiest month in its history for vehicle production. The amount of vehicles produced in June was kept a secret by the corporation.
Musk had not tweeted about Tesla’s second-quarter sales as of early Saturday afternoon. However, he caused some controversy late on Friday by breaking a nine-day Twitter silence that was unusually protracted. On Friday, he tweeted about meeting Pope Francis with himself and four of his children.
A week after the publication of an interview with Musk in which he called the new facilities in Austin and Berlin “money furnaces” that were losing billions of dollars because supply chain failures were restricting the amount of cars they could make, Tesla released its most recent delivery figures.
Making the Berlin and Austin factories operational was said by Musk in an interview with a Tesla owners’ club on May 30 that was just recently made public. Everything else is a pretty little issue, according to Musk, who also predicted that “it will all be fixed very quickly.”
Musk has also talked of forcing salaried employees back into the office and a potential 10% reduction in Tesla’s workforce owing to a potential recession.
Since COVID-19 first appeared two years ago, supply chain failures have been particularly crippling for automakers, who rely on parts from all over the world. Automakers’ issues were made worse by a shortage of computer chips required to power automobiles’ computers, which drove up the cost of both new and used vehicles.
Automakers had to close plants for eight weeks to help stop the virus from spreading as the pandemic broke out in the U.S. in 2020. Orders for semiconductors were cancelled by some component companies. At the same time, consumers stranded at home upgraded their devices, driving up demand for laptops, tablets, and gaming consoles.
Chip manufacturers had switched their output to consumer items by the time auto production began, resulting in a lack of weather-resistant automotive-grade chips. Even if Tesla has done better than other automakers, there is still a chip shortage in the market.