Tesla on Wednesday reported a massive drop in auto sales for last quarter, though the company said it’s confident it will still reach its annual sales goal.
Electric carmaker Tesla’s output slowed down 31% during a rocky start to the new year, a development that will likely magnify nagging doubts about whether the electric car pioneer will be able to make the mass-market leap.
According to a new report from Business Insider, the Palo Alto, California-based company churned out 77,100 vehicles from January to March, well behind the pace it must sustain to fulfill the CEO Elon Musk’s pledge to manufacture 500,000 cars annually.
“We had only delivered half of the entire quarter’s numbers by March 21, ten days before end of quarter,” Tesla said in a press release Wednesday night. “This caused a large number of vehicle deliveries to shift to the second quarter.”
The most dramatic drop-off was for Tesla’s highest-profit-margin vehicles, its Model S sedan and Model X SUV, which saw combined deliveries fall 56% from the previous quarter. Tesla delivered 50,900 newer Model 3 cars and 12,100 older-model S and X vehicles in the first quarter. In the previous quarter, the company delivered 90,700 total vehicles to customers, including 63,150 Model 3 cars and 27,550 Model S and X vehicles.
However, the company reaffirmed full-year guidance of 360,000 to 400,000 vehicle deliveries in 2019, which should reassure investors given this quarter’s miss. It also said that approximately 10,600 vehicles were in transit to customers, reflecting unexpectedly big demand in China and Europe.
Musk had already let slip on a call with journalists last month that the company would report a loss for the quarter due to one-off charges linked to restructuring the company’s retail operations. That marked a worsening in outlook compared with an early January warning the company would be lucky to make any profit at all in the period.
That suggests that Tesla‘s first quarter financial results — due to be released in the coming weeks — will likely be grim. Indeed, while Tesla didn’t share any financial numbers in Wednesday’s press release, it signalled that Wall Street should expect the worst when the numbers do come out.
“Because of the lower than expected delivery volumes and several pricing adjustments, we expect Q1 net income to be negatively impacted,” the company wrote. “Even so, we ended the quarter with sufficient cash on hand.”
