Tesla on Wednesday reported a massive drop in auto sales for last quarter, though the company said it’s confident it will still reach its annual sales goal
About 63,000 vehicles were delivered to customers in the first three months of 2019 — a 31% drop compared to the prior quarter. The total sales figures included 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 drop in sales at Tesla in nearly two years and the single largest drop ever. Slowing sales are a concern because Tesla needs to keep its sales pace high to pay down its sizable debts. Tesla counts a sale whenever a vehicle is delivered, not when a new order or reservation is placed, because customers only pay the full price whenever they actually receive their vehicles. So sales figures do not necessarily reflect demand.
Daniel Ives, managing director at Equity Research, said in an email that Wall Street was already bracing for “an apocalyptic quarter.”
Ives said overall sales were “clearly soft,” but the low number “represents an ‘air pocket’ quarter in our opinion.” He added that he was encouraged because Model 3 deliveries “were better than feared.”