Tesla records unusual drop in Q2 sales, here’s the facts

Covid lockdowns in China led to an unusual drop in Tesla’s Q2 production and sales. The electric-car (we call it Tesla) maker reported  completed sales that fell nearly 18% to about 255,000 vehicles in the second quarter compared to the first three months of the year. Production fell 15% to 259,000. The company’s Shanghai factory  was shut down for several weeks in April due to lockdown regulations in the city aimed at tackling a surge in Covid cases. Problems sourcing parts from Tesla suppliers limited Tesla’s production even after the plant reopened. According to Dan Ives, a technology analyst at Wedbush Securities, the lockdowns likely cost Tesla the production of about 70,000 vehicles in the quarter. The company statement states that the problems Tesla faced in the first few months of the quarter are now largely overcome. “Despite ongoing supply chain challenges and plant closures beyond our control, June 2022 was the highest vehicle production month in Tesla history,” he said. Tesla does not publish the geographic breakdown of sales in its monthly sales and production report. According to company documents, just 45% of its revenue last year came from sales in the United States.Industry-wide auto sales across much of China were halted for much of the quarter due to  lockdowns. Most of Tesla’s  sales outside the US have come from vehicles built in Shanghai. Read more : Learn from Indonesia : Startup layoffs storm Read more : Crisis 2022: Early Warning came from  the World Bank Read more : Michael Jordan Approaches Mike D’Antoni to become Hornets Coach Read more : Barcelona MotoGP Game : Aleix Espargaro Mistakes Explain Read more : Ted Pick “Morgan Stanley” : The mindset shift has started in the market  Still, it was the first time since early 2020 that the company had seen a quarter-on-quarter decline in sales or production. That drop in  sales was also  due to  lockdowns related to the early global outbreak of Covid. Such declines were rare for the fast-growing company.Despite the decline in production and sales compared to the first quarter of 2022, both metrics came in above prior-year levels as the company reported a 25% increase in production and a 27% increase in shipments. Analysts polled by Refinitiv expected the company to report a 46% year-over-year increase in revenue  and a 51% increase in adjusted revenue for the quarter. The more modest year-over-year increase in  sales could dampen those expectations and put more pressure on the company’s share price.   Tesla shares are down 35% so far this year and The company opened two new plants during the quarter, one in Germany and one in Texas. But problems ramping up production at those plants meant that production at those plants was “negligible” for the first two months of the quarter, Tesla CEO Elon Musk said in a recent interview.

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