Daily Management Review

39% Drop In Tesla Sale In Q3 In US, Shows Regulatory Filing


10/29/2019




39% Drop In Tesla Sale In Q3 In US, Shows Regulatory Filing
A regulatory filing by the United States based electric car maker Tesla showed how the company had fared in a break down of its sales by geographical area. The filing showed that the sale of the company’s cars in the United States during the third quarter had tumbled by 39 per cent which was the first drop for the company in its home market in over two years. However that drop was partly offset by the increase of demand for its cars in China, the largest electric car market of the world, and other foreign markets.
 
Despite the drop in the US sale and the increase of sale in foreign markets, Tesla’s revenues generated from the US still accounts for the biggest share of the total revenue of the company. During the third quarter the company generated revenues from its home market of $3.13 billion compared to revenue of $5.13 billion in the same period a year ago.
 
On the other hand, Tesla reported a 64 per cent growth in its sales in China with revenues of $669 million. There was also a rise of more than a billion dollars in revenues for the company from other segment which covers the rest of the globe at $1.83 billion, showed the regulatory filing.
 
An almost 8 per cent drop in its total revenues of the third quarter was reported by Tesla while it presented in earnings report earlier this month which came in at $6.30 billion but missed analysts estimates of revenues of $6.33 billion, according to IBES data from Refinitiv. The earnings report did not provide a breakup of its sale by geographical area.
 
However the company surprised the market and analysts by reporting a profit for the third period which was the second continuous quarter of profit – the first for the company since its inception a decade ago. The company was also able to meet the target of delivering a record 97,000 cars as promised by its Chief Executive Officer Elon Musk.
 
Tesla has said that for the entire of 2019, it has set a target of delivering 360,000 to 400,000 vehicles and added that it was  “highly confident in exceeding 360,000 deliveries this year.”
 
Compared to the drop in sale in the US in the latest quarter, the company had reported a growth of 55 per cent in sale in the second quarter ended June.
 
“The 40% drop in sales shows there is a ton of work to do to meet guidance,” Roth Capital analyst Craig Irwin said.
 
Expansion of its services is being made by Tesla in markets such as China and Europe. There is increasing pressure on Muck form investors to put Tesla on a profitability path as soon as possible even while it continued to spend on major initiatives such as building of its Giga factory in Shanghai. China and setting up of assembly lines for production of its new models such as the Model Y SUV and a Semi commercial truck.
 
(Source:www.nytimes.com)






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