Martin Viecha, Tesla’s head of investor relations, said the company had continued to experience sequential growth even in the first quarter. The electric car maker delivered six percent more of its Model 3 and Model Y vehicles compared to the previous quarter. In contrast, the deliveries of its higher-priced Model X and Model S vehicles dropped by 38 percent.
The company delivered over 420,000 vehicles worldwide from January to March, up from last year’s 310,000. This increase in production was due to the company’s ramping up of production at new factories in Texas and Berlin, as well as China’s recovery from its COVID-19 lockdowns.
In January, Tesla reduced prices globally by up to 20 percent after missing Wall Street’s delivery projections for 2022. The automaker also lowered the prices of its more expensive models, the Model S and X, by $5,000 to as much as $10,000 in early March.
$TSLA delivered 423K EVs in 1Q, ahead of WS ests of 421K and easily a new quarterly record (4Q 405K). 1Q Production was 440.8K, or DIO of 16 (up from 13 in 4Q), which is respectable given efforts to smooth the delivery wave. 1Q delivs up +36% vs YA of 310K. pic.twitter.com/JqG5OgbXY8
— Gary Black (@garyblack00) April 2, 2023
These price cuts spurred a price war in China, with several Chinese competitors, including BYD and Xpeng, lowering prices to protect their market share amid weakening demand. While Tesla has an eight percent share in the world’s largest auto market’s so-called new energy car sales for the first two months of the year, BYD accounted for 41 percent of these sales.
Despite the price cuts, analysts are monitoring Tesla’s profit margins per vehicle. The company is scheduled to release its first-quarter results after the markets close on April 19. While some analysts speculated that demand might be slowing, others suggested that Tesla used its higher profit margins to grab market share from other automakers.
Tesla’s shares have risen over 68 percent this year due to expectations that the company will win the price war it initiated, although the stock remains more than 50 percent below its November 2021 peak.