(Reuters) – Tesla Inc delivered fewer than expected Model 3 sedans in its first quarter as the electric car maker shifted its sales focus to international markets, where transit times are longer.
FILE PHOTO: A Tesla Model 3 car is displayed at the Canadian International AutoShow in Toronto, Ontario, Canada, February 15, 2019. REUTERS/Chris Helgren
Tesla delivered 50,900 Model 3s in the quarter, falling short of analysts’ estimates of 58,900, according to IBES data from Refinitiv.
Deliveries of all models fell 31 percent from the fourth quarter to 63,000 vehicles, including 12,100 Model S sedans and Model X SUVs.
Tesla said first-quarter net income would be negatively impacted because of the lower-than-expected delivery volumes and several pricing adjustments.
Total production fell 10.92 percent to 77,100 vehicles from 86,555 vehicles in fourth quarter. The company churned out 62,950 Model 3s, up from a total of 61,394 Model 3s in the fourth quarter.
The Model 3 is the linchpin of Tesla’s growth strategy and Chief Executive Officer Elon Musk is under pressure to deliver the vehicle to new international markets efficiently, while guarding working capital.
Musk has been engaged in a public battle with U.S. regulators stemming from his tweets about Tesla’s production estimates.
Tesla focused primarily on delivering the new sedan to buyers in Europe and China in the first quarter.
In late February, Tesla said it would soon begin selling its originally promised $35,000 version of its Model 3 sedan to its North American customers but it was too late to make a marked difference in its quarterly deliveries.
Before Tesla announced its $35,000 version, analysts had expected to see a drop in the number of Model 3s delivered to U.S. customers as demand for the higher-priced versions waned and tax subsidies were halved.
In February, Musk warned that Tesla expected to post a first-quarter loss.
The company also laid off some workers, including about half of the team hired to deliver cars in the United States, and said it would close stores to lower costs. It has since said it would keep higher-volume stores open, while announcing a 3 percent price increase on some models.
Reporting by Alexandria Sage in San Fransisco and Rama Venkat in Bengaluru; Editing by Sandra Maler and Lisa Shumaker