Tesla reports rare drop in second-quarter sales

The electric car maker said completed sales fell nearly 18% to 255,000 vehicles in the second quarter compared to the first three months of the year. Production fell 15% to 259,000.

The company’s Shanghai plant was closed for several weeks in April due to the city’s lockdown rules aimed at combating a surge in Covid cases. Problems getting parts from Tesla’s suppliers also limited Tesla’s production even after the factory opened. According to Dan Ives, technical analyst at Wedbush Securities, the lockdowns likely cost Tesla about 70,000 vehicles in the quarter.

The company said in a statement that the problems that Tesla faced in the first months of the quarter are now largely behind them.

“Despite ongoing supply chain issues and factory shutdowns beyond our control, June 2022 was the highest month of vehicle production in Tesla history,” the post reads.

Tesla does not publish a geographic breakdown of sales in its monthly sales and production report. Only 45% of its revenue last year came from US sales, according to company filings. Industry auto sales in much of China stalled for most of the quarter due to lockdowns. Most of Tesla’s sales outside the US come from cars made in Shanghai.

However, for the first time since the start of 2020, the company experienced a drop in sales or production compared to the previous quarter. This is a drop in sales. has also been linked to lockdowns associated with the early global Covid outbreak.

Such falls were rare in a rapidly growing company. Even with the decline in production and sales compared to the first quarter In 2022, both figures were up year-on-year as the company reported a 25% increase in production and a 27% increase in shipments.

Analysts polled by Refinitiv had expected the company to report 46% year-over-year revenue growth and 51% growth in adjusted earnings for the quarter. A more modest year-on-year sales growth could dampen those expectations and put additional pressure on the company’s share price. Tesla shares are down 35% this year.

The company opened two new plants this quarter, one in Germany and one in Texas. But problems ramping up production at those plants meant output from those plants was “paltry” in the first two months of the quarter, Tesla CEO Elon Musk said in a recent interview.

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