Electric vehicles manufacturer, Tesla delivered 17.9% fewer electric automobiles in the second quarter than the previous quarter, as the China factory shutdown disrupted its production and supply chain. The company announced on Saturday that it delivered 254,695 automobiles in the April to June period, compared with 310,048 vehicles in the preceding quarter, ending a nearly two-year-long run of record quarterly Tesla deliveries.
Musk Reduced Tesla Deliveries Due to Shanghai Factory Getting Overrun by COVID
With renewed strength in COVID-19 cases in China forced Tesla to temporarily discontinue production at its Shanghai factory and also impacted suppliers’ facilities in the country. Tesla is ramping up production at the Shanghai factory with the easing of the COVID-19 lockdown, which will help boost Tesla deliveries in the second half. Back in June, CEO Elon Musk had stated that he had a “super bad feeling” about the economy and needed to cut about 10% of staff at the electric car maker.
In June, Tesla again increased prices for some of its models in the United States and China after Musk had cautioned of considerable inflationary pressure on raw materials and logistics. June 2022 was the highest Tesla deliveries month in the company’s history, Tesla said in a news release. Analysts had anticipated Tesla to report deliveries of 295,078 vehicles for the April to June period, according to Refinitiv data.
Tesla Had a Very Rough Quarter Induced by Production and Supply-Chain Challenges
Several analysts had reduced their calculations further to about 250,000 due to China’s prolonged lockdown. Musk stated in April that Tesla’s overall vehicle production in the second quarter would be “roughly on par” with the first quarter, driven by a China rebound and China factory shutdown. But he recently stated Tesla had a “very tough quarter,” mentioning production and supply-chain challenges in China.
Musk further stated Tesla’s new factories in Texas and Berlin are “gigantic money furnaces” losing billions of dollars as they struggle to increase production quickly after the China factory shutdown. Tesla shares have fallen 35% so far this year, hit by Musk’s $44 billion proposed acquisition of Twitter Inc, the China lockdown, and macroeconomic apprehensions.