Tesla's deliveries drop 31% over shipping issues
Tesla deliveries fell 31% in its first quarter, as it faced problems shipping its Model 3 electric car to Europe and China.
The carmaker struggled with its first shipments to Europe and China, of the Model 3 sedan, due to longer transit times.
Despite the shipping issues, the carmaker has reaffirmed its guidance to deliver between 360,000 and 400,00 cars this year.
Lower first quarter expected
In February, the company’s co-founder and CEO, Elon Musk tweeted that the company encountered "many unexpected challenges" that month when Model 3s came through the Belgian port of Zeebrugge.
The carmaker has said its US order for the Model 3 car has already outpaced what it was able to fulfil in the quarter.
Tesla also said it delivered half of the quarter's numbers by March 21, with 10,600 vehicles still in transit at the end of the quarter.
The company said in a statement ‘Due to a massive increase in deliveries in Europe and China, which at times exceeded 5x that of prior peak delivery levels, and many challenges encountered for the first time, we had only delivered half of the entire quarter’s numbers by March 21.’
The challenges come after Tesla announced earlier in the year, they would reduce the price of the Model 3 sedan to an affordable price of $35,000.
Tesla’s net income in the quarter will in turn impacted by the lower delivery and price cuts, after the company warned in February, it would suffer a first-quarter loss.
Tesla strives to improve margins
Tesla has been striving to improve margins ever since, aiming to post a profit later in 2019. The company has laid off workers and said it would close stores, doing what it can to lower costs.
IBES data from REfinitive shows, Tesla delivered 50,900 Model 3s in the quarter, falling short of analysts' estimates of 58,900.
Tesla delivered a total of 63,000 vehicles, including 12,100 Model S sedans and Model X SUVs. That was less than half the 27,550 Model S and Xs delivered in the fourth quarter.
Tesla, however, has said it ended the quarter with "sufficient cash on hand."
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