Shares of Tesla plunged Thursday in premarket trading after the electric-car marker disclosed that first-quarter deliveries of its vehicles plummeted 31 percent from the previous three-month period and warned that its first-quarter income will “be negatively impacted.”
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The company placed some of the blame on “pull forward” demand from the first quarter of 2019 to the fourth quarter of 2018 and also challenges of beginning to deliver its Model 3 compact car to customers in China and Europe for the first time.
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“Due to a massive increase in deliveries in Europe and China, which at times exceeded 5x that of prior peak delivery levels, and many challenges encountered for the first time, we had only delivered half of the entire quarter’s numbers by March 21, ten days before end of quarter,” the compay said in a statement. “This caused a large number of vehicle deliveries to shift to the second quarter. At the end of the first quarter, approximately 10,600 vehicles were in transit to customers globally.”
Despite the delivery challenges Tesla said it had “sufficient cash on hand.”
The Palo Alto,California, company said that while deliveries were approximately 63,000 vehiclies in the first three months of this year, which was 110 percent more than the same quarter last year, they were 31 percent less than last quarter.
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“Despite pull forward of demand from Q1 2019 into Q4 2018 due to the step down in the federal tax credit, US orders for Model 3 vehicles significantly outpaced what we were able to deliver in Q1. We reaffirm our prior guidance of 360,000 to 400,000 vehicle deliveries in 2019,” Tesla said.
“Given that Tesla vehicle production currently occurs entirely from one factory in the San Francisco Bay Area, but must be delivered to customers all around the world, production could be significantly higher than deliveries, as it was this quarter, when production exceeded deliveries by 22 percent.”
The weak delivery results were not entirely unexpected.
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CEO Elon Musk in September said on Twitter that the automaker had transitioned from “production hell” to “delivery logistics hell.” The latter, Musk noted, was a far more tractable issue.
In its fourth-quarter financial report, Tesla had said it expected to deliver between 360,000 to 400,000 vehicles in 2019, an increase of as much as 65 percent when compared with last year. Musk confirmed the higher-end figure in a now-contested tweet, where regulators allege he violated a court order.
