Home BusinessAutomobile Tesla Deliveries Slipped in Second Quarter Even as Pandemic Hit

Tesla Deliveries Slipped in Second Quarter Even as Pandemic Hit


Tesla reported a modest decline in new-car deliveries for the second quarter, as sales in China and other foreign markets helped the company weather the coronavirus pandemic in the United States.

The company said it delivered 90,650 cars in the quarter, down 5 percent from the 95,365 it sold in the same period in 2019. It sold 88,496 cars in the first quarter of 2020, when most of the company’s operations were largely unaffected by the virus.

Local officials forced Tesla to shut down its main car factory, in Fremont, Calif., in March. Two months later, the company restarted production earlier than it was authorized to do so after its chief executive, Elon Musk, criticized stay-at-home orders as “fascist.”

Analysts said Tesla was able to increase sales in China, where it recently began producing Model 3 sedans at a factory in Shanghai. The new plant allowed Tesla to sell cars in China, the world’s largest market for electric cars, without paying import duties that had limited its sales in that country in the past.

China has also rebounded from its coronavirus outbreak faster than the United States, where auto sales have been slowed significantly by the pandemic. Tesla does not break out U.S. sales, but General Motors and Fiat Chrysler reported on Wednesday that new-vehicle sales in the United States fell by more than a third in the second quarter.

Tesla’s delivery numbers were better than analysts had expected and the company’s stock price was up about 8 percent on the news. The company’s stock has soared in recent months, and has been setting new highs this week. At its current price, Tesla has a market value of nearly $210 billion. That’s more than the value of Toyota Motor, which was previously the world’s most valuable automaker, and three times the combined value of General Motors and Ford Motor.

While traditional automakers sell vastly more cars and earn billions of dollars more in profit than Tesla, Wall Street has grown increasingly optimistic about Tesla’s prospects this year. Some investors consider the company to be at the vanguard of the transition from petroleum-fueled cars and trucks to electric vehicles — a change that they believe older companies like Toyota, G.M. and Ford are ill prepared for.

Tesla has also seemed to overcome problems that had hobbled its ability to bring new cars to market and scale up manufacturing. The company successfully opened a second factory, in Shanghai, and has started building a third, near Berlin. It also started delivering the Model Y, a sport-utility vehicle that is expected to sell well because it starts at about $53,000, which is roughly what comparable luxury gasoline vehicles sell for.

Further, Tesla reported a profit in the first quarter, is generating cash from its operations and appears to have stabilized its financial situation. It ended the first quarter with $8 billion in cash, a dramatic turnaround for a company that had struggled to raise money at favorable terms in 2019.

“If you go back a year and a half, the question was, can these guys make it with the kind of capital expenditures they need to do,” said Joseph Osha, an analyst at JMP Securities. “That’s no longer a question.”

The company is also preparing to accelerate its expansion and is in the early stages of identifying a location for a fourth car factory. Tesla appears to be eyeing a site near Austin, Texas. In a recent county filing, the company said it could begin construction in the third quarter of this year at a 2,100-acre site that is currently occupied by a concrete plant.

  • Updated June 30, 2020

    • What are the symptoms of coronavirus?

      Common symptoms include fever, a dry cough, fatigue and difficulty breathing or shortness of breath. Some of these symptoms overlap with those of the flu, making detection difficult, but runny noses and stuffy sinuses are less common. The C.D.C. has also added chills, muscle pain, sore throat, headache and a new loss of the sense of taste or smell as symptoms to look out for. Most people fall ill five to seven days after exposure, but symptoms may appear in as few as two days or as many as 14 days.

    • Is it harder to exercise while wearing a mask?

      A commentary published this month on the website of the British Journal of Sports Medicine points out that covering your face during exercise “comes with issues of potential breathing restriction and discomfort” and requires “balancing benefits versus possible adverse events.” Masks do alter exercise, says Cedric X. Bryant, the president and chief science officer of the American Council on Exercise, a nonprofit organization that funds exercise research and certifies fitness professionals. “In my personal experience,” he says, “heart rates are higher at the same relative intensity when you wear a mask.” Some people also could experience lightheadedness during familiar workouts while masked, says Len Kravitz, a professor of exercise science at the University of New Mexico.

    • I’ve heard about a treatment called dexamethasone. Does it work?

      The steroid, dexamethasone, is the first treatment shown to reduce mortality in severely ill patients, according to scientists in Britain. The drug appears to reduce inflammation caused by the immune system, protecting the tissues. In the study, dexamethasone reduced deaths of patients on ventilators by one-third, and deaths of patients on oxygen by one-fifth.

    • What is pandemic paid leave?

      The coronavirus emergency relief package gives many American workers paid leave if they need to take time off because of the virus. It gives qualified workers two weeks of paid sick leave if they are ill, quarantined or seeking diagnosis or preventive care for coronavirus, or if they are caring for sick family members. It gives 12 weeks of paid leave to people caring for children whose schools are closed or whose child care provider is unavailable because of the coronavirus. It is the first time the United States has had widespread federally mandated paid leave, and includes people who don’t typically get such benefits, like part-time and gig economy workers. But the measure excludes at least half of private-sector workers, including those at the country’s largest employers, and gives small employers significant leeway to deny leave.

    • Does asymptomatic transmission of Covid-19 happen?

      So far, the evidence seems to show it does. A widely cited paper published in April suggests that people are most infectious about two days before the onset of coronavirus symptoms and estimated that 44 percent of new infections were a result of transmission from people who were not yet showing symptoms. Recently, a top expert at the World Health Organization stated that transmission of the coronavirus by people who did not have symptoms was “very rare,” but she later walked back that statement.

    • What’s the risk of catching coronavirus from a surface?

      Touching contaminated objects and then infecting ourselves with the germs is not typically how the virus spreads. But it can happen. A number of studies of flu, rhinovirus, coronavirus and other microbes have shown that respiratory illnesses, including the new coronavirus, can spread by touching contaminated surfaces, particularly in places like day care centers, offices and hospitals. But a long chain of events has to happen for the disease to spread that way. The best way to protect yourself from coronavirus — whether it’s surface transmission or close human contact — is still social distancing, washing your hands, not touching your face and wearing masks.

    • How does blood type influence coronavirus?

      A study by European scientists is the first to document a strong statistical link between genetic variations and Covid-19, the illness caused by the coronavirus. Having Type A blood was linked to a 50 percent increase in the likelihood that a patient would need to get oxygen or to go on a ventilator, according to the new study.

    • How many people have lost their jobs due to coronavirus in the U.S.?

      The unemployment rate fell to 13.3 percent in May, the Labor Department said on June 5, an unexpected improvement in the nation’s job market as hiring rebounded faster than economists expected. Economists had forecast the unemployment rate to increase to as much as 20 percent, after it hit 14.7 percent in April, which was the highest since the government began keeping official statistics after World War II. But the unemployment rate dipped instead, with employers adding 2.5 million jobs, after more than 20 million jobs were lost in April.

    • How can I protect myself while flying?

      If air travel is unavoidable, there are some steps you can take to protect yourself. Most important: Wash your hands often, and stop touching your face. If possible, choose a window seat. A study from Emory University found that during flu season, the safest place to sit on a plane is by a window, as people sitting in window seats had less contact with potentially sick people. Disinfect hard surfaces. When you get to your seat and your hands are clean, use disinfecting wipes to clean the hard surfaces at your seat like the head and arm rest, the seatbelt buckle, the remote, screen, seat back pocket and the tray table. If the seat is hard and nonporous or leather or pleather, you can wipe that down, too. (Using wipes on upholstered seats could lead to a wet seat and spreading of germs rather than killing them.)

    • What should I do if I feel sick?

      If you’ve been exposed to the coronavirus or think you have, and have a fever or symptoms like a cough or difficulty breathing, call a doctor. They should give you advice on whether you should be tested, how to get tested, and how to seek medical treatment without potentially infecting or exposing others.

Tesla continues to face challenges, however. It still relies on sales of environmental credits to other automakers to generate much of its profit. In a recent email to employees, Mr. Musk said breaking even in the second quarter “is looking super tight.”

Many of Tesla’s customers rave about their cars — and many others pine for the luxury vehicles on social media. But experts have dinged the company for selling cars with obvious flaws and quality problems. Last month Tesla ranked last in a closely watched annual survey of automotive quality by J.D. Power, the first time its cars were included in that report. J.D. Power found customers reported 250 problems for every 100 cars sold, worse than 31 other automakers and well below the industry average of 166.

Further, while sales in China and other overseas markets are holding up, the strength of demand in the critical U.S. market remains unclear, especially as coronavirus cases surge across many states in the West and South, including two big Tesla markets, California and Florida.

In May, when much of California was under stay-at-home orders, Tesla sold just 1,447 vehicles in that state, a drop of 70 percent from a year ago, according to the Dominion Cross-Sell Report.

Tesla is scheduled to report its second quarter earnings later this month.

Niraj Chokshi contributed reporting.

Source Link

Related Posts