Tesla said on Sunday it has been delivered 422,875 electric vehicles in the first quarter of 2023, just slightly better than Wall Street’s estimates of about 420,000 units. The company produced 440,808 vehicles during the same period.
The delivery and production numbers are record results for the EV maker. In the fourth quarter of 2022, Tesla delivered 405,278 and produced 439,701 units. Those Q4 deliveries were also record results, but they missed Wall Street expectations.
It appears that a large percentage of the deliveries came from vehicles produced by Tesla’s Shanghai gigafactory. The automaker has implemented price cuts in all markets, including China, where the most recent cuts have led to a price war among competitors. The result is an increase in Tesla’s sales in China over last year, suggesting the East Asian country is helping Tesla’s global delivery numbers increase.
Tesla does not break down its delivery and production numbers by region, but according to data from the China Passenger Car Association (CPCA), Tesla has sold a total of 140,453 Chinese-made vehicles January And February. The CPCA has not yet published the March data. If Tesla’s March shipments in China match February’s figures, more than 50% (or nearly 215,000) of Q1 shipments would come from Shanghai.
Tesla began cutting prices for its electric vehicles in China in October. Most recently, Tesla lowered Model 3 and Y prices again in January between 6% and 13.5%, adding fuel to the fire of a price war in the country. Rivals Xpeng and Nio, as well as international brands such as Volkswagen and Mercedes-Benz, also lowered their prices to compete with Tesla cars, which are now up to 14% cheaper than last year. In some cases they are almost 50% cheaper than in the US and Europe.
The automaker mirrored similar price cuts in Europe, Mexico and the US in recent months. This year, Tesla reduced prices for Model Y and Model 3 vehicles in the US by up to 20%, and for Model X and Model S vehicles by up to 9%. Last week, Tesla also relaunched its European referral program to try to increase sales before the end of the quarter.
Tesla’s stock price rose 6.24% (after hours of trading) after the quarterly production of the automaker and delivery results.
Tesla needed a strong result after a volatile last few months in trading. In late 2022, Tesla’s share price plummeted due to CEO Elon Musk’s review of Twitter. Investors also worried last year that Tesla’s many rebates in several markets — including a $7,500 rebate for U.S. buyers who took delivery before the end of the year — could indicate low customer demand.
During Tesla’s Q4 2022 earnings call in January, Musk tried to reassure investors by saying demand outpaced production. At the time, Tesla acknowledged that the price drops and general inflationary environment could affect the company’s auto margins in the near term, but the company said it was more focused on its operating margin.
We’ll learn more about the impact of global price drops on overall business when Tesla reports its first-quarter results on Wednesday, April 19. Late last year, Tesla said it expects long-term 50% compound annual growth with about 1.8 million cars for the year.