Tesla Faces Delivery Challenges Amid Fierce Global Competition

Tesla's third-quarter deliveries fell short of expectations as competition from Chinese and European automakers intensified. The company delivered 462,890 vehicles, missing Wall Street’s predicted 469,828. To avoid its first annual drop in deliveries, Tesla needs to ship a record 516,344 vehicles in Q4. Additional factors such as lack of European subsidies and slowing Chinese consumer spending have also impacted Tesla’s performance.

Tesla missed expectations for third-quarter deliveries on Wednesday, followed by a decline in shares of 3.5% in premarket trading. The global automaker delivered 462,890 vehicles during the quarter ending Sept. 30, a rise of 6.4% from the previous quarter but falling short of Wall Street's forecast of 469,828 vehicles, based on an LSEG poll of 12 analysts.

To match last year's delivery figures of 1.81 million units, Tesla must deliver a record 516,344 vehicles in the fourth quarter. Failure to meet this target could mark Tesla's first annual drop in deliveries. Contributing factors include intense competition in the United States, lack of subsidies in Europe, and diminishing consumer spending in China.

Competition from Chinese automakers like BYD and Xpeng has been particularly fierce, bolstered by local government subsidies. Although BYD sold fewer battery electric vehicles than Tesla in Q3, their plug-in hybrid deliveries surged over 75%. BMW overtook Tesla in European battery electric vehicle sales in July. To adapt, Tesla is pivoting towards AI-powered autonomous technology, with plans to unveil a robotaxi product at an event in Los Angeles on Oct. 10.

(With inputs from agencies.)