Tesla reported lower-than-expected third-quarter deliveries on Wednesday, leading to a 3.5% drop in the company’s shares.
Despite offering incentives and financing deals, the EV giant struggled to attract enough buyers for its aging electric vehicle models, raising concerns about its potential first-ever annual decline in deliveries after years of rapid growth.
Tesla delivered 462,890 vehicles in the July-September period, marking a 6.4% increase compared to the same quarter last year and its first quarterly delivery growth after two consecutive quarters of decline. However, the figure fell short of the 469,828 vehicles expected.
The weaker-than-expected numbers come at a crucial time for Tesla, which is facing stiff competition from both U.S. and international automakers, particularly in China.
While the company’s sales in China have remained strong, thanks to price cuts and incentives such as zero-interest financing and insurance offers, demand in the U.S. and Europe has softened.
Investors had been optimistic in recent weeks, with Tesla’s stock rising ahead of the company’s highly anticipated robotaxi unveiling event on October 10 in Los Angeles. The event is expected to shift focus to the company’s AI-driven autonomous technology, a potential new growth area for the EV maker.
However, the Q3 delivery miss has clouded expectations, as Tesla now requires a record-breaking 516,344 vehicle deliveries in the fourth quarter to avoid its first annual delivery decline in 2024.
Tesla’s ongoing price cuts and incentives have squeezed its profit margins, a trend that some investors fear could prove harmful in the long term.
Despite Tesla's challenges, it still outperformed rival BYD, which delivered 443,426 battery-electric vehicles in the third quarter.