Tesla launched a record number of cars in the first quarter of the year following Elon Musk’s decision to lower the prices of its electric vehicles.
The electric car maker delivered 422,875 vehicles in the first three months of 2023, up 4% from the previous quarter. Tesla also produced a record 441,000 cars during the period, the company announced on Sunday.
Musk, Tesla’s chief executive, cut prices on the company’s range of vehicles by up to 9% last month, aiming to bolster sales in a tougher economic climate and stave off competition from automakers. established automobile and electric vehicle companies such as Rivian and Polestar.
Even so, his company has continued to lose ground to rivals in some competitive markets, including China.
At Tesla’s investor day in early March, Musk said, “People’s desire to own a Tesla is extremely high. The limiting factor is their ability to afford a Tesla.”
The company’s share price has nearly doubled to $207 in the year to date, and investors have welcomed Musk’s price cuts and efforts to increase production, although the shares remain well below their November 2021 high of $407.
The company has benefited from changes in the tax regime for electric vehicles introduced in the US last year. Democrats removed a cap on the number of vehicles from a single manufacturer that would be eligible for a $7,500 tax credit, aimed at stimulating the electric vehicle market.
The price cuts “have paid big dividends” for the company, according to Daniel Ives, an analyst at Wedbush Securities.
“We believe that consumer demand in China improved during the quarter for Tesla and was key to the company’s [delivery expectations]. The big question will be margins as the price cut will have an impact on that front,” he said in a note.
Tesla has set a goal of increasing production more than 10 times to 20 million vehicles a year by 2030. That could cost as much as $175 billion, according to Zach Kirkhorn, chief financial officer.
Musk has indicated that the company will expand its range of vehicles with a more affordable model and has been increasing production levels at the company’s new factories in Germany and Austin, Texas, where Tesla is headquartered.
