Tesla, the electric vehicle pioneer, announced on Sunday that Tesla delivered a record 422,875 cars in the first quarter, but missed the target set by CEO Elon Musk of achieving 50% annual growth. Despite the record sales, the results were considered a disappointment for Tesla, as Musk had stated on the last earnings call that the company aimed for 50% delivery growth. The sales figure was, however, in line with the consensus numbers among analysts, according to Gene Munster, managing partner of Deepwater Asset Management. He added that the company would need to pick up the pace to meet its Tesla delivery targets for the rest of the year.
Exceeding the Expectations
Tesla cut prices early this year to attract consumers, as inflation and interest rates continued to rise. The overwhelming majority of sales were of the Model 3 sedan and Y crossover. The company produced 440,808 vehicles in the quarter, more than the expected 432,513, according to analysts. On the last earnings call, Musk said Tesla aims to produce 1.8 million to 2 million vehicles this year. Tesla doesn’t break down its sales by region, but the US and China are its largest markets.
Tesla’s record quarterly sales received a muted reaction in Asia, where shares of the company’s key suppliers and rivals were mixed. Chinese battery giant Contemporary Amperex Technology (CATL) fell up to 2.5%, while South Korea’s LG Energy Solution rose 0.5%. According to Bloomberg data, Tesla Delivered accounts for 12% of CATL’s sales and 25% of LG Energy’s sales.
Despite the mixed reaction in Asia, Ben Kallo of Robert W. Baird viewed Tesla’s first-quarter numbers positively, considering everything going on in the macro environment. He said there were different consensus figures among analysts, and people would quickly switch to talking about what the margins would be for the quarter. There had been a lot of focus on price cuts hurting margins, he added.