Tesla Stock Slips After EV Maker Misses Estimates on Deliveries

Tesla Inc. faced a significant setback as its stock price dropped over 6% following the announcement of its third-quarter vehicle deliveries, which fell short of analysts’ expectations. Despite delivering 462,890 vehicles, slightly above the anticipated 462,000, the company is now under pressure to achieve record-breaking deliveries in the fourth quarter to avoid an annual decline.

Key Takeaways

• Tesla delivered 462,890 vehicles in Q3, a 6.4% increase year-over-year.
• The delivery numbers fell short of the 469,828 expected by analysts.
• The stock price dropped over 6% in response to the news.
• Tesla needs to deliver 516,344 vehicles in Q4 to maintain annual growth.
• Price cuts and incentives are squeezing profit margins.

Delivery Performance

In the third quarter, Tesla’s deliveries included:

• Model 3 and Model Y: 439,975 units
• Other Models: 22,915 units (including Model S, Cybertruck, and Model X)

This marked the first quarterly growth after two consecutive quarters of declining sales. However, the numbers were not enough to meet the heightened expectations set by investors and analysts, leading to a sharp decline in stock value.

Market Reactions

The market’s reaction was swift, with Tesla’s shares on track to erase all gains made in 2024. Analysts had anticipated a stronger performance, especially with the upcoming unveiling of Tesla’s robotaxi product on October 10, which was expected to shift focus towards AI-powered autonomous technologies.

Challenges Ahead

Tesla is now facing several challenges:

1. Increased Competition: The EV market is becoming increasingly crowded, particularly in China, where local manufacturers are launching new models.
2. Profit Margin Squeeze: Price cuts and incentives aimed at boosting sales have led to reduced profit margins, raising concerns about long-term sustainability.
3. Demand Fluctuations: While sales in China showed relative strength, demand in the U.S. and Europe has been weak, complicating the company’s growth trajectory.

Future Outlook

To avoid its first-ever annual decline in deliveries, Tesla must achieve record-breaking numbers in the fourth quarter. Analysts suggest that while the return to growth in Q3 is a positive sign, the company needs to introduce fresh models to attract customers and maintain momentum.

In summary, while Tesla’s third-quarter delivery numbers showed some growth, the overall performance fell short of expectations, leading to a significant drop in stock price. The company now faces a critical fourth quarter, where it must deliver over 516,000 vehicles to sustain its growth trajectory and investor confidence.

Sources

• Why Tesla’s stock is falling despite a beat on delivery numbers – MarketWatch, MarketWatch.
• Tesla’s quarterly deliveries disappoint ahead of robotaxi unveiling | Reuters, Reuters.