Tesla Inc’s global sales fell for the second straight quarter despite price cuts and low-interest financing offers, another sign of weaking demand for the company’s products and electric vehicles overall.
The Austin, Texas, company said yesterday that it sold 436,956 vehicles from April through June, down 4.8 percent from 466,140 sold the same period a year ago. But the sales were better than the 436,000 that analysts had expected.
Demand for electric vehicles (EVs) worldwide is slowing, but they’re still growing for most automakers. Tesla, with an aging model lineup and relatively high average selling prices, has struggled more than other manufacturers but is likely to remain the EV leader in the US and across the world.
Photo: Florence Lo, Reuters
Tesla gave no explanation for the sales decline, which is a harbinger of what to expect when the company posts second-quarter earnings on July 23.
Nearly all of Tesla’s sales came from the smaller and less-expensive Models 3 and Y, with the company selling only 21,551 of its more expensive models that include X and S, as well as the new Cybertruck.
The sales decline came despite Tesla knocking US$2,000 off the prices of three of its five models in the US in April. The company cut the prices of the Model Y, Tesla’s most popular model and the top-selling EV in the US, and also of the Models X and S.
Last week, Tesla lopped US$2,340 off the base price of some newly revamped Model 3s that were in the inventory shipped to its stores.
In addition, Tesla in May offered 0.99 percent financing for up to six years on the Model Y. Last month, it offered interest as low as 1.99 percent for three years on the rear-wheel-drive Model 3. Typical new-vehicle interest rates average just over 7 percent, according to Edmunds.com.
Also during the quarter, Tesla knocked roughly a third off the price of its “Full Self Driving” system — which can’t drive itself and so drivers must remain alert and be ready to intervene — to US$8,000 from US$12,000.
Jessica Caldwell, head of insights for Edmunds.com, said Tesla is having trouble in a market where most early adopters already have EVs, and mainstream buyers are more skeptical that electric cars can meet their needs.
“They’re more pragmatic. They want to know where am I charging? What will this cost me?” she said.
Tesla also has a set of unique problems, mainly a model lineup that doesn’t look much different than it did years ago. With Tesla’s price cuts, used vehicle prices tumbled. Anyone wanting a Tesla can get a far better deal buying a used one, Caldwell said. “If you’re looking at monthly payments, it’s hard to compete against,” she said.
Caldwell doesn’t see any big catalyst this year that would boost Tesla sales unless gasoline prices spike. The new Cybertruck is being sold only in small numbers, and the rest of the lineup is old.
“Most people would be hard pressed to figure out which one is the newer one and which one is the older one,” she said.
Japanese technology giant Softbank Group Corp said Tuesday it has sold its stake in Nvidia Corp, raising US$5.8 billion to pour into other investments. It also reported its profit nearly tripled in the first half of this fiscal year from a year earlier. Tokyo-based Softbank said it sold the stake in Silicon Vally-based Nvidia last month, a move that reflects its shift in focus to OpenAI, owner of the artificial intelligence (AI) chatbot ChatGPT. Softbank reported its profit in the April-to-September period soared to about 2.5 trillion yen (about US$13 billion). Its sales for the six month period rose 7.7 percent year-on-year
CRESTING WAVE: Companies are still buying in, but the shivers in the market could be the first signs that the AI wave has peaked and the collapse is upon the world Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday reported a new monthly record of NT$367.47 billion (US$11.85 billion) in consolidated sales for last month thanks to global demand for artificial intelligence (AI) applications. Last month’s figure represented 16.9 percent annual growth, the slowest pace since February last year. On a monthly basis, sales rose 11 percent. Cumulative sales in the first 10 months of the year grew 33.8 percent year-on-year to NT$3.13 trillion, a record for the same period in the company’s history. However, the slowing growth in monthly sales last month highlights uncertainty over the sustainability of the AI boom even as
BUST FEARS: While a KMT legislator asked if an AI bubble could affect Taiwan, the DGBAS minister said the sector appears on track to continue growing The local property market has cooled down moderately following a series of credit control measures designed to contain speculation, the central bank said yesterday, while remaining tight-lipped about potential rule relaxations. Lawmakers in a meeting of the legislature’s Finance Committee voiced concerns to central bank officials that the credit control measures have adversely affected the government’s tax income and small and medium-sized property developers, with limited positive effects. Housing prices have been climbing since 2016, even when the central bank imposed its first set of control measures in 2020, Chinese Nationalist Party (KMT) Legislator Lo Ting-wei (羅廷瑋) said. “Since the second half of
Tax revenue from securities transactions last month increased 41.9 percent from a year earlier to NT$30.3 billion (US$975.8 million), rising on an annual basis for the third consecutive month and marking the highest for the month of October as Taiwanese stocks continued to perform strongly, data released by the Ministry of Finance showed yesterday. Last month, the TAIEX surged 2,412.81 points, or 9.34 percent, marking its largest-ever monthly rise for October as market sentiment was buoyed by a nearly 15 percent gain in contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), which accounts for more than 40 percent of the
RSS