Tesla deliveries drop less than expected

Tesla Inc.’s early-year deliveries fell less than expected from levels reached late last year, as the coronavirus pandemic exacerbated challenges Elon Musk warned would be difficult.

Tesla handed over 88,400 vehicles worldwide in the first quarter, down 21 per cent from the last three months of 2019. But the deliveries total beat analysts’ average estimate for about 78,100, sending shares soaring in late trading.

Musk, 48, tried to salvage as much business as possible last month by introducing “touchless” deliveries as authorities around the globe are urging wouldbe car buyers to shelter in place. While Tesla managed to deliver more vehicles than the year-ago quarter, the improvement was small considering it added a new product — the Model Y — and opened a plant in China.

Tesla didn’t give an update on whether it still expects to deliver at least 500,000 vehicles this year. The carmaker’s stock climbed as much as 14 per cent to US$519.

Analysts anticipate Tesla will sustain a significant blow along with all other automakers from the spread of COVID-19. With a global recession increasingly likely, consumers are expected to be less interested in making big-ticket purchases like new vehicles even once they’re able to leave their homes.

The vehicles delivered in the quarter include the first Model Y crossovers that started reaching customers in mid-March. Musk has predicted it will be a big seller, potentially eclipsing the combined volume of all other vehicles in Tesla’s lineup: the Models 3, S and X.

Tesla didn’t say how many vehicles it built during the quarter at its plant near Shanghai, which started production late last year. While the company suspended output when measures to contain the coronavirus forced plant closures across China, government authorities bent over backward to help the company reopen quickly.

Its lone U.S. assembly plant in Fremont, Calif., stopped production on March 23. Local health authorities have since extended “stay-at-home” orders to at least May 3.

Tesla delivered over 14,000 fewer cars than it produced in the quarter, meaning it built inventory.

Musk warned back in July — long before the pandemic — that the first quarter of this year would be “tough.” Tesla’s vehicles are no longer eligible for federal tax credits in the U.S., and buyers also are getting less-generous support in the Netherlands.