There are new concerns about electric car manufacturer Tesla Inc. (NASDAQ:TSLA)
The company led by Elon Musk has reported a record decline in deliveries of its Model 3 sedan during the first quarter of 2019, raising concerns about demand for the electric vehicle.
In a written statement, Tesla announced that it had delivered 63,000 Model 3 vehicles in the three months that ended on March 31, down from 90,966 in the fourth quarter of 2018. Tesla’s share price fell as much as 8.5% during pre-market trading.
In the U.S., where Tesla introduced the Model 3 in 2017, tax incentives for its vehicles shrank. In Europe and China, the company struggled to get the cars to consumers. The 50,900 Model 3 sedans delivered in the first quarter missed analysts’ average estimate for 51,750 and was less than in the two previous quarters.
The first quarter shortfall is a setback for Chief Executive Officer Musk’s plan to accelerate sales with lower prices as the company targets global markets. Tesla traded as low as $267 U.S. in pre-market trading and was down 6.9% at $271.80 U.S. in New York Thursday morning.
Despite the first quarter disappointment, Tesla reiterated its forecast of 360,000 to 400,000 vehicle deliveries in 2019. But Tesla’s history of missing its own ambitious projections may make it difficult to have confidence in the outlook. The shares have slumped 12% this year amid demand concerns, multiple price cuts, job reductions and an exodus of senior executives.
The company had warned shareholders that first-quarter deliveries of the pricier Model S sedan and Model X sport utility vehicle probably would be lower than a year ago because customers rushed to buy in time to get a $7,500 U.S. incentive on those vehicles.
Tesla ended 2018 with $3.7 billion U.S. of cash but had to pay off a $920-million U.S. convertible bond in February of this year. While Musk warned the company probably would lose money at the start of 2019, and the carmaker has a $566-million U.S. note coming due this November, Tesla has said it has enough money to pay off debt obligations with current cash flow.
