Tesla on Wednesday reported a huge drop in auto sales for last quarter, though the company stated it’s confident it will still reach its yearly sales goal.
About 63,000 vehicles were delivered to clients in the first three months of 2019 — a 31% decline compared to the prior quarter. The total sales figures consisted about 50,900 Model 3 sedans, Tesla’s best-selling vehicle, and 12,100 luxury Model S sedans and Model X SUVs.
It was the first quarter-to-quarter fall in sales at Tesla in almost two years and the single largest drop ever. The company published its delivery results late Wednesday, and its stock shut down 8.2% Thursday. Investors are also observing a separate piece of Tesla news: A federal judge is set to hear oral arguments in a case that securities regulators submitted against CEO Elon Musk.
Tesla’s reducing sales are a concern as the company needs cash in order to pay down its sizable debts. Tesla counts a sale whenever an automobile is delivered, not when a new order or reservation takes place, because customers only pay the full price whenever they actually receive their car. So, sales figures do not necessarily indicate demand.
The slump in deliveries does not come as a shock: Wall Street analysts expected
Daniel Ives, managing director at Equity Research, stated in an email that Wall Street was currently bracing for “an apocalyptic quarter.”
Ives said total sales were “clearly soft,” but the low number “represents an ‘air pocket’ quarter in our opinion.” He included that he was encouraged because Model 3 deliveries “were better than feared.”