Tesla’s electric car sales dropped from July to September after the company stopped production in some factories for an upgrade of assembly lines.
The company sold 435,000 cars worldwide in the third quarter, down from 466,000 vehicles in the second quarter. Wall Street analysts expected the decline. They attributed it to the production slowdowns that Tesla experienced as they renovated factories in China and the United States.
Tesla stated in a Monday statement that the decline was “caused by planned factory upgrades.” It added that it is still expected to deliver 1.8 million vehicles this year, compared to 1.3 million cars in 2022.
The dip in sales could raise concerns about the demand for Teslas despite the company’s price cuts. Tesla in China is trying to compete with Chinese automakers like B.Y.D., Nio, and Nio, which have more rapid model releases.
Tesla is facing increased competition in the United States from established automakers such as Ford Motor, General Motors, and Hyundai. Tesla’s dominance has been eroded; in the second quarter, the company held about 60 percent market share for electric vehicles.
Rivian is another new competitor. It announced on Monday it had delivered 15,600 electric vans and pickup trucks, as well as sport utility vehicles, in the third quarter, compared to 12,600 the quarter before. Rivian’s pickups are a threat to Tesla Cybertruck, despite being smaller. Elon Musk has stated that the Cybertruck pickup will be available by the end of the year.
Tesla has cut the prices of all its models significantly this year in order to keep up with the competition and maintain a rapid growth rate. Its profit margin is now lower than that of established carmakers, but it remains higher.
In recent months, the company has stopped or slowed production in its Austin, Texas, factory to prepare for the show of the Cybertruck. Tesla stopped some production in China as it changed assembly lines for an upgraded model of its Model 3 sedan, known as the Highland.
Tesla continues to grow faster on an annual basis than traditional automakers. Tesla’s sales grew by 26 percent since the third quarter of 2022 when it delivered 344,000 cars.
Tesla may also be able to benefit from the United Automobile Workers Strike against Ford; G.M. Stellantis is the owner of Jeep Ram and Chrysler. Tesla’s cost advantages would be widened if unionized Detroit automakers paid their workers much higher wages. Tesla workers are not members of the U.A.W., although the union says it will try to organize them.