Tesla misses delivery forecast as factory renovations slow production – 10/02/2023 at 5:24 p.m.

(Updated actions in paragraph 6, added context throughout, investor comment in paragraph 10) by Akash Sriram

Oct 2 (Reuters) – Tesla TSLA.O missed market estimates for third-quarter deliveries on Monday as planned upgrades at its factories to roll out a newer version of the Model 3 mainstream sedan forced shutdowns of production.

Some analysts believe the updates could trigger a rebound in deliveries in the fourth quarter by allowing Tesla to refresh its lineup with models that could better compete with offerings from U.S. rivals such as Ford and BYD in China.

Deliveries of the updated and more expensive Model 3 compact sedan are expected to begin in the fourth quarter, while a Cybertruck launch event is also planned later this year.

The electric vehicle maker, which will report its quarterly results on October 18, delivered 435,059 vehicles in the three months to September 30, down almost 7% from the previous quarter, but maintained its target of deliver 1.8 million vehicles this year.

An LSEG poll of eight analysts had estimated deliveries at 459,949 vehicles, with the lowest figure being 442,000 and the highest being 511,405.

Shares of the electric vehicle maker saw an uptick after falling nearly 3% following news of failed deliveries.

Tesla has also cut prices aggressively to counter the effect of the slowing electric vehicle market, while battling competition from new entrants and incumbents.

In the third quarter, Tesla cut prices for its premium Model S and Model X cars by 21% in key markets China and the United States.

It also increased discounts on the Model 3 and Model Y in the United States, while reducing Model Y prices and offering other incentives in China.

“They’re going to keep the pressure on their competitors,” said Thomas Martin, senior portfolio manager at Globalt Investments, which owns Tesla shares, adding that the company could cut prices further.

Tesla produced 430,488 vehicles in the third quarter, compared to 479,700 in the previous quarter.

Meanwhile, electric pickup maker Rivian Automotive RIVN.O reported third-quarter deliveries that topped analysts’ estimates and reaffirmed its annual production target of 52,000 vehicles.

“While Tesla remains a dominant force in the U.S. EV market for 2023, there is growing demand for a broader range of EV options to satisfy growing consumer interest in electric vehicles,” said Ashwin Amberkar, analyst at Canalys Research.

Deliveries of Tesla’s premium vehicles, Model S and Model X, reached around 16,000 units in the third quarter. However, these deliveries only represent around 4% of the total number of vehicles.

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