Tesla, the world’s top-seller of electric vehicles, said its deliveries jumped 36% in the year’s first quarter, coinciding with big price cuts in North America and China and the temporary availability of federal tax credits for U.S. customers.
The Austin-based company said it sold a record 422,875 vehicles, up by about 113,000 units from a year ago. Production also reached a best-ever level of 440,808 units owing to the addition of new plants near Berlin, Germany, and Austin, Texas, that weren’t fully operational in the first quarter of 2022. The delivery figure generally aligned with analyst expectations of about 420,000 units.
Tesla shaved thousands of dollars off the base price of its vehicle lineup months ago, spurred by tougher competition from competitors in China and to ensure that its top-selling Model Y crossover and Model 3 sedan were cheap enough to qualify for a U.S. tax credit of $7,500 created by the Inflation Reduction Act signed into law last year. The U.S. Treasury Department last week tightened requirements for vehicles to qualify for the incentive starting on April 18. At that point, Tesla vehicles may, at best, qualify for only a portion of the credit.
“Clearly, since the Model Y/3 price cuts were implemented early this year demand has been robust during the course of 1Q led by the key China region, which should enable Tesla to at least hit the ~420k bogey for the quarter with possible upside,” Dan Ives, an equity analyst for Wedbush Securities, said in a research note last week. “That said, the macro (environment) remains uncertain and we would not be surprised to see more slight price cuts around the edges both in the U.S. and China over the coming months for Tesla to further stimulate consumer demand.”
U.S. sales of electric vehicles grabbed about 6% of the market last year, a record share, and likely topped that level in the first quarter owing to the reasonably generous tax credit. New rules for the incentive—including a requirement that key battery materials and battery components like anodes and cathodes come from within North America or designated trading partners—will be tough for any EV maker to meet in the near term as China remains the top global supplier.
Tesla’s deliveries in the quarter were dominated by the Model Y and 3, which accounted for 97% of its quarterly total. The company appeared to have an unusually high supply of Model 3s in late March in its inventory, making it possible to take delivery in as little as a week before the end of the month. That’s a big change for a company that CEO Elon Musk says has no shortage of demand and which typically takes weeks or months to fill an order for its vehicles.
As usual, Tesla provided no details about demand for its electric vehicles by global region, making it impossible to tell where sales are most robust and where they’re slowing. The company also included no information about Tesla Semi, which it began delivering in December 2022. A recall of the battery-powered truck was announced last week owing to a parking brake fault.
Separately, Tesla said it would release quarterly financial results on April 19, after the close of regular trading.
The company’s shares closed up 6.2% on Friday at $207.46, gaining 92% in 2023’s first quarter.
