Tesla rolled out a record number of cars in the first quarter of the year following Elon Musk’s decision to cut prices of his electric vehicles.
The electric car manufacturer delivered 422,875 vehicles in the first three months of 2023, up 4 per cent on the previous quarter. Tesla also produced a record 441,000 cars in the period, the company announced on Sunday.
Mr Musk, Tesla’s chief executive, dropped prices for the company’s range of vehicles by as much as 9 per cent last month, aiming to bolster sales in a harsher economic climate and see off competition from established carmakers and electric vehicle companies including Rivian and Polestar.
Still, his company has continued to lose ground to rivals in some competitive markets, including China.
At Tesla’s investor day in early March, Mr Musk said: “The desire for people to own a Tesla is extremely high. The limiting factor is their ability to pay for a Tesla.”
The company’s share price has almost doubled to $207 (€193) in the year to date, with investors welcoming Mr Musk’s price cuts and efforts to ratchet up production – though shares remain far below their November 2021 peak of $407.
The company has benefited from changes to the tax regime for electric vehicles introduced in the US last year. The Democrats removed a cap on the number of vehicles from a single manufacturer which would be eligible for a $7,500 tax credit, aiming to stimulate the electric vehicle market.
The price cuts “have paid major dividends” for the company, according to Daniel Ives, an analyst at Wedbush Securities.
“We believe China consumer demand improved during the quarter for Tesla and was key to the company exceeding [delivery expectations]. The big question will be margins as cutting prices will have an impact on this front,” Mr Ives said.
[ Tesla cars losing value faster than rival models following price cutsOpens in new window ]
Tesla has set a target of raising production by more than 10 times to 20 million vehicles a year by 2030. That could cost as much as $175 billion (€163 billion) to achieve, according to Zach Kirkhorn, chief financial officer.
Mr Musk has indicated that the Tesla will expand its range of vehicles with a more affordable model and has been increasing production levels at the company’s new factories in Germany and in Austin, Texas, where Tesla is headquartered. – Copyright The Financial Times Limited 2023
