Salem Radio Network News Saturday, January 28, 2023


Tesla slides as logistic issues widen deliveries and production gap

By Akash Sriram and Savyata Mishra

(Reuters) -Tesla Inc shares fell about 7% on Monday after the world’s most valuable automaker sold fewer-than-expected vehicles in the third quarter as deliveries lagged way behind production due to logistic hurdles.

Shares opened at a more than two-month low and if losses hold, Tesla would lose nearly $58 billion in market capitalization in a single day, more than the market value of General Motors Co as well as Ford Motor Co.

Tesla produced a record 365,923 vehicles in the quarter and delivered a new high of 343,830 vehicles, but still missed market expectations, with an unusually large gap between production and deliveries raising investor worries.

The company said it was unable to secure enough transportation during the peak time at a reasonable cost for vehicles made, while Chief Executive Elon Musk vouched “steadier deliveries” in the current quarter to reduce last-minute rush.

The shortfall in deliveries comes amid demand worries among investors and analysts due to increased prices of Tesla vehicles, higher borrowing cost and a dull outlook for global economic growth.

“While Tesla continues to point to supply constraints as limiting deliveries, the potential for demand destruction looms large,” JP Morgan analyst Ryan Brinkman said.

Tesla will need to deliver more than 450,000 vehicles in the fourth quarter to meet its goal of growing deliveries by 50% annually. Reuters reported that it has set a target to produce about 495,000 Model Y and Model 3 in the period.

“The broader concern is more so than just them missing their deliveries, probably just more the going concern for all these smaller upstart EV… That might put us behind the curve in terms of where EV production goes,” said GuideStone Capital Management’s Brandon Pizzurro.

Shares of smaller electric-vehicle makers including Rivian Automotive Inc, Fisker Inc and Lucid Group were also down between 2.7% and 6.8% in early trading.

(Reporting by Akash Sriram, Ankika Biswas and Savyata Mishra in Bengaluru; Editing by Arun Koyyur)


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