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Elon Musk’s Tesla posted its second consecutive decline in vehicle deliveries in the April to June period as the EV group deals with slowing demand and stiff competition from China.
The company delivered 443,956 vehicles globally in the three months to June — down 4.7 per cent from a year earlier but above Wall Street expectations.
The deliveries were higher than those of China’s BYD, which earlier reported that second-quarter deliveries totalled 426,000 — a 21 per cent rise from the previous year. Investor focus has been on whether BYD can overtake Tesla by sales once again, as it did in the last quarter of 2023.
Tesla is facing a new era of lower sales growth and margins after years of rapid expansion as mainstream buyers remain sceptical of electric vehicles. The US company has slashed prices on some of its models in the face of increased competition from Chinese rivals such as BYD.
In January it warned that deliveries growth in 2024 would be “notably lower”, as a boost from months-long price cuts dwindled. This quarter the company beat analysts’ expectations of 439,302 vehicles for the April to June period, according to Bloomberg consensus estimates.
The EV sector has become more cut-throat, with sales growing at slower rates than expected as mass market customers have balked at higher prices compared with petrol alternatives.
Adding to the troubles for Tesla is a consumer shift to cheaper hybrid models. Unlike legacy manufacturers, the EV maker does not make petrol or hybrid models it can fall back on. Meanwhile, its inventories are growing — increasing more than 136 per cent over the past two years.
According to analysts at Jefferies, Tesla’s market share in EV has plateaued. Even though its software remains ahead of most “slow moving” peers, this is not the case in China. “A stagnant Tesla is a lesser threat to other manufacturers until EV demand accelerates again,” said Philippe Houchois in a note.
Tesla shares have fallen 15 per cent this year.
Additional reporting by Gloria Li in Hong Kong
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