Tesla reg­is­tra­tions drop in key mar­ket

Kuwait Times - - BUSINESS -

Reg­is­tra­tions of Tesla Inc ve­hi­cles in Cal­i­for­nia, by far the largest mar­ket of the lux­ury elec­tric car maker, fell 24 per­cent in April from a year ago, ac­cord­ing to data from IHS Markit. Tesla said in a state­ment on Fri­day that it was ex­tremely mis­lead­ing to look at reg­is­tra­tion data from one month, that de­liv­er­ies var­ied month-to-month for op­er­a­tional rea­sons, and that de­liv­er­ies in­creased by more than 53 per­cent in the sec­ond quar­ter com­pared with a year ear­lier.

“Look­ing at the quar­ter in to­tal is the small­est time frame in which to ob­tain reli­able, mean­ing­ful in­for­ma­tion about our de­liv­er­ies. De­liv­er­ies nat­u­rally fluc­tu­ate from month to month for a va­ri­ety of nor­mal op­er­a­tional rea­sons. “In the first month of the quar­ter, Tesla builds cars pri­mar­ily for over­seas mar­kets, in the sec­ond month for North Amer­i­can mar­kets (not in­clud­ing the West Coast) and in the third month for the West Coast,” Tesla said in the state­ment to Reuters. Fo­cus­ing on April reg­is­tra­tions “cherry picks” data, it said. Tesla ear­lier this week re­ported first-half global de­liv­er­ies of its Model S and its Model X SUV at the low end of its own fore­cast, driv­ing down the stock and rais­ing ques­tions about demand for the older mod­els. The find­ings come as in­vestors worry that demand for Tesla’s lux­ury Model S sedan is wan­ing ahead of the mass mar­ket Model 3 launch.

Tesla’s share price more than dou­bled be­tween early De­cem­ber and late June as in­vestors bet on Chief Ex­ec­u­tive Elon Musk’s strat­egy to trans­form the low-vol­ume lux­ury elec­tric car maker into a di­ver­si­fied producer of mass mar­ket ve­hi­cles, stor­age bat­ter­ies, elec­tric com­mer­cial trucks and rooftop so­lar pan­els. The com­pany’s mar­ket value rose past larger ri­vals Gen­eral Mo­tors Co and Ford Mo­tor Co.

Since June 23, how­ever, Tesla shares have fallen by nearly 20 per­cent amid con­cerns that demand for the com­pany’s ex­ist­ing mod­els is weak­en­ing. Over­all sales of elec­tric ve­hi­cles in the United States re­main stuck at less than 1 per­cent of to­tal ve­hi­cle sales, de­spite a grow­ing num­ber of mod­els fielded by Tesla and other car mak­ers.

Tesla said ear­lier this week that bat­tery pack pro­duc­tion prob­lems held back ve­hi­cle out­put in the sec­ond quar­ter un­til early June. Cal­i­for­nia, a haven for en­vi­ron­men­tal­ists and techies, is one of the com­pany’s lead­ing mar­kets. The com­pany does not break out re­sults by geo­graphic area. IHS an­a­lyst Stephanie Brin­ley cau­tioned that a sin­gle month of data could not fully ex­plain Tesla demand.

“If Tesla had an is­sue with its pro­duc­tion for the month, that could ex­plain” the drop in reg­is­tra­tions, she said, not­ing in par­tic­u­lar the prob­lems with bat­tery pack out­put. Still, she said, Tesla’s Model S, launched in 2012, could be in need of a re­fresh. “They haven’t changed much on the ex­te­rior or much on the pack­age,” and it is a high-fash­ion car, she said. “I can cer­tainly un­der­stand where Model S sales may be soft­en­ing a lit­tle bit be­cause it’s an older prod­uct. That could be con­tribut­ing to the is­sue.”

In­dus­try data re­viewed sep­a­rately by Reuters showed that the Model S reg­is­tra­tions in Cal­i­for­nia were un­even over the first four months of 2017, vary­ing by more than 1,000 units month-to-month. In per­cent­age terms Model S growth peaked in Fe­bru­ary, de­cel­er­ated in March and turned neg­a­tive in April in Cal­i­for­nia.

Brin­ley said it was dif­fi­cult to as­sess whether that re­flected demand or avail­abil­ity. IHS mea­sures ve­hi­cle reg­is­tra­tion, which comes after a sale. Reg­is­tra­tion in Cal­i­for­nia and over­all in the United States rose sharply for the com­bined first four months of the year, but April showed steep de­clines. IHS has not re­leased data for May or June.

Chief Ex­ec­u­tive Musk in May stoked con­cerns that the Model 3 would can­ni­bal­ize demand for the Model S when he told in­vestors that some “con­fused” Tesla buy­ers re­garded the new Model 3 as an upgrade to the Model S, af­fect­ing Model S orders. The new car is a $35,000 mass mar­ket ve­hi­cle, which costs about half the price of the Model S. Tesla re­ported first-half 2017 global de­liv­er­ies rose to 47,100 in 2017. Tesla had pre­dicted 47,000 to 50,000. Musk in May said there would be demand for 100,000 lux­ury Tes­las.

IHS re­ported April Tesla reg­is­tra­tions fell to 2,177 from 2,867 in Cal­i­for­nia. Na­tion­ally they dropped nearly 10 per­cent to 3,911 from 4,334.

For the first four months, Cal­i­for­nia reg­is­tra­tions rose to 6,926 from 5,804 and US reg­is­tra­tions rose to 15,288 from 10,937. Tesla shares fell 5.6 per­cent to close at $308.83 on Thurs­day, al­though the stock is up about 45 per­cent for the year to date. — Reuters

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