Tesla reports drop in auto sales, Toyota sees US surge
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Analysts predict overall sales to climb by roughly 6% in the quarter, indicating a continuing strong labor market and an improved supply picture that has relieved pricing pressures.
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Workers walk in front of a German Tesla plant (AFP)
Tesla announced dramatically lower first-quarter car sales on Tuesday, citing an unimpressive demand for electric vehicles, while traditional manufacturers like Toyota increased sales thanks to improving US inventories.
Elon Musk's automaker recorded 386,810 global deliveries during the year, an 8.5% decrease, owing in part to a sluggish sales market in China, where it confronts stiff competition from domestic electric vehicle (EV) manufacturers.
General Motors reported a modest drop in sales, while Toyota saw a spike in sales compared to the previous year when it was restricted by severe inventory concerns caused by Covid-19 supply chain problems.
Analysts predict overall sales to climb by roughly 6% in the quarter, indicating a continuing strong labor market and an improved supply picture that has relieved pricing pressures.
However, industry analysts warn that many customers are still feeling the impact of increasing borrowing rates.
In explaining the reduction, Tesla cited an impact from the manufacturing ramp-up of an upgraded Model 3 at its California facility, factory shutdowns owing to shipping diversions caused by the Red Sea crisis, and the attack on Gigafactory Berlin, its only European manufacturing plant.
The drop, according to Morningstar, "points to a slowdown in demand for Tesla's vehicles, as the company's competitors, particularly in China, may have cut prices more than Tesla to win consumers."
Growth in EVs in other areas, particularly the US, has prompted Tesla to reduce prices, lowering the company's profit projection.
Wedbush analyst Dan Ives called the quarter an "unmitigated disaster."
"We view this as a seminal moment in the Tesla story for Musk to either turn this around and reverse the black eye 1Q performance. Otherwise, some darker days could clearly be ahead that could disrupt the long-term Tesla narrative."
