Report fuels view Tesla sales are way down
For weeks, analysts have speculated that Tesla has seen a marked drop in sales since the beginning of the year, and the electric carmaker’s recent gyrations on price cuts and cost-saving initiatives have only bolstered their suspicions.
Recently compiled data on new-car registrations from a large portion of the U.S. seems to offer further support for that view. According to the Dominion Cross-Sell Report, a compilation drawn from state motor vehicle records, registrations of new Tesla vehicles fell significantly from January to February in the 23 states the report covers.
The states include California, which accounts for about half of Tesla’s sales, as well as Texas, Florida and Washington, three other big markets for the carmaker.
Last month, 6,252 Teslas were registered with motor vehicle agencies in the 23 states, compared with 23,310 in January and a monthly average of 13,000 to 17,000 in the fourth quarter. (The totals tend to reflect a lag because cars are often not registered until the month after purchase.)
The data for California was even starker, with registrations falling to 2,198 in February from 15,429 in January.
In December, Tesla was scrambling to sell cars before the end of the year because a federal tax credit available to its customers was set to fall by half Jan. 1, to $3,850. So a surge in January registrations would not be unexpected. The question is whether an ensuing downturn like the one reflected in the Dominion data would prove lasting.
A Tesla spokesman said a single month of vehicle registrations did not necessarily reflect the company’s delivery totals. He said registrations in individual states can fluctuate significantly from month to month because the automaker delivers batches of cars to different areas at different times.
But as a placeholder for Tesla’s official sales figures, such data is already having an effect. Jeffrey Osborne, an analyst at Cowen & Co., issued a research note Friday saying his company was lowering its Tesla price target to $180 from $200 “to reflect both state-government and third-party data that suggests deliveries during the quarter will be weaker than our prior expectations even with the typical end-of-quarter frantic push.”
Tesla shares fell nearly 3.5 percent Friday to $264.53.
Analysts believe that Tesla’s sales flagged after Jan. 1 because of the reduced tax credit and because its efforts to accelerate sales in December pulled in customers who likely would have bought cars in the next few months. A slump that follows a sales flurry driven by discounts and incentives is a well-known phenomenon in the auto industry.
Dominion’s data does not yet reflect Tesla’s introduction of a $35,000 version of its Model 3 sedan, its lowestprice offering yet, which is likely to lift sales. Tesla began taking orders for the $35,000 version Feb. 28, but its website says customers will have to wait six to eight weeks for delivery. The company attributed the wait to a wave of orders for the entry-level Model 3.
Still, falling registration totals are another worrisome sign for the company. CEO Elon Musk has said the automaker would report a loss for the first quarter and expected to take charges against earnings to reflect difficulties in ramping up sales in Europe and China and other challenges.
Osborne, the Cowen analyst, said Tesla’s sales were being watched for clues to its cash position in the next few months.