Tesla Sales Slip as It Readies Factories for New Models
Sales of Tesla electric cars slipped from July through September after the company paused production at some factories to upgrade assembly lines.
The company delivered 435,000 vehicles worldwide in the third quarter, down from 466,000 in the second quarter. Wall Street analysts had expected the decline, which they attributed to production slowdowns as Tesla refitted factories in the United States and China.
Still, the dip in sales may renew concerns that demand for Tesla cars is slackening even after the company cut prices. In China, Tesla is trying to fend off Chinese carmakers like BYD or Nio that are rolling out new models more quickly.
In the United States, Tesla faces increased competition from established carmakers like Ford Motor, General Motors, Hyundai and Volkswagen. They have been chipping away at Tesla’s dominance; the company accounted for about 60 percent of the electric vehicle market in the second quarter.
Tesla this year cut prices significantly on all of its models, to fend off competition and keep its sales growing at a rapid clip. As a result, its profit margin has fallen sharply, though it remains high in comparison with more established carmakers.
More recently, the company has slowed or stopped production at its factory in Austin, Texas, to prepare for production of the Cybertruck pickup. In China, Tesla paused some production as it switched assembly lines to an upgraded version of its Model 3 sedan known as the Highland.
On an annual basis, Tesla continued to grow faster than the traditional carmakers. Sales grew 26 percent compared with the third quarter of 2022, when Tesla delivered 344,000 vehicles.
Tesla could also benefit from the United Automobile Workers union strike against Ford, G.M. and Stellantis, the owner of Jeep, Ram and Chrysler. Sharply higher wages for unionized workers at the Detroit carmakers would widen Tesla’s cost advantage. Tesla workers do not belong to the U.A.W., although the union has said it plans to try to organize them.