Tesla deliveries affected by China’s lockdown against China – 02/07/2022

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by Hyunju Jin and Akash Sriram

(Reuters) – Tesla delivered 17.9% fewer electric vehicles in the second quarter compared to the previous quarter, as China’s COVID-19-related shutdowns disrupted its production and supply chain.

The world’s largest electric carmaker on Saturday said it delivered 254,695 vehicles in the April-June period, compared to 310,048 vehicles in the previous quarter, ending a nearly two-year record quarterly delivery period.

The resurgence of Covid-19 cases in China has forced Tesla to temporarily suspend production at its factory in Shanghai and has also affected supplier facilities in the country.

Tesla is ramping up production at its Shanghai factory as the Covid-19 lockdown eases, which will help boost deliveries in the second half.

In early June, CEO Elon Musk told executives he was “feeling very bad” about the economy and needed to cut the electric carmaker’s workforce by about 10%.

Musk said demand for Tesla vehicles remains strong, but there are still supply chain challenges.

In June, Tesla again raised prices for some of its models in the United States and China after Musk warned of significant inflationary pressure on raw materials and logistics.

Tesla said in a press release that June 2022 was the month of highest vehicle production in the company’s history.

According to Refinitiv data, analysts expected Tesla to deliver 295,078 vehicles in the April-June period. Many analysts cut their estimates to around 250,000 due to China’s prolonged shutdown.

(by Hyunju Jin, Akash Sriram and Maria Ponnezhath in San Francisco)

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