Tesla, the maker of electric cars, reported third-quarter deliveries on Friday, delivering 139,300 electric vehicles in the quarter, up more than 50 percent from the second quarter and another record high. Sales across the auto industry were boosted by growing interest in electric vehicles, and electric car maker Tesla’s third-quarter deliveries hit a new high.
The auto industry was particularly hard hit this spring when the spread of the epidemic forced many businesses to close. North American auto plants, which typically produce more than 1 million cars a month, produce less than 5,000 vehicles a month.
As airlines and other industries continue to struggle, the auto industry is beginning to recover. Last month, some big carmakers reported a year-on-year increase in sales in the U.S. market. If that growth continues for a year, the industry as a whole is expected to sell 16m cars and trucks, up from 13m annualized sales in June.
The recovery has been led by electric car maker Tesla. On Friday, the company reported third-quarter deliveries, another record. Steady growth in China and Europe offset weakness in the U.S. market. But Tesla didn’t offer segmented sales results for different regions.
Tesla is reported to have delivered 139,300 electric cars in the third quarter, up more than 50 per cent from the second quarter. The second-quarter outbreak forced Tesla and other automakers to close factories, and many consumers had no plans to buy cars.
Tesla also said it produced 145,036 electric vehicles in the third quarter, up about 76 percent from the second quarter. Tesla was forced to close its plant in Fremont, California, from mid-March to mid-May because of the outbreak. Fortunately, Tesla was able to continue production at the newly built Shanghai superstyser plant in China.
While Tesla did well in the third quarter, other automakers did better than they did earlier this year. Total car sales fell about 11 per cent in the third quarter from a year earlier, but carmakers reported an increase in September from a year earlier. Toyota said sales of light vehicles rose 16 per cent last month.
The recent increase in car sales has clearly been driven by pent-up demand, which has forced people to postpone car purchases as the epidemic spreads. In addition, some models have low inventories due to the carmaker’s two-month shutdown. Car sales are picking up because of the impact of the outbreak on homes and businesses. Some people spend money on cars between travel, restaurants and entertainment. Others buy new cars because they want to avoid public transportation such as subways and buses, or because they have moved from cities to suburbs and small towns.
GM said third-quarter sales improved month-on-month, with September sales outpacing the same month last year. “While the economy rebounded substantially in the third quarter, retail sales rebounded even more strongly,” Elaine Buckberg, GM’s chief economist, said in a statement. “Ultra-low car loan rates have boosted car sales, but the stronger momentum has come from the demand caused by the outbreak.”
But it is unclear how long the recovery in the auto industry will last. Michelle Krebs, executive editor of Cox Automotive, a market research firm, says credit is tightening for some low-income buyers and a surge in confirmed cases could weigh on the auto industry. “The outbreak in the U.S. is not under control, and now the president and first lady of the United States are infected with the virus, which is of great concern to consumers.”
For Tesla, the record quarterly delivery is just the latest in a series of achievements. The company’s share price has risen sharply in recent months and is now the world’s most valuable car company.
However, despite the surge in deliveries, Tesla shares closed down about 7 percent on Friday on concerns about whether the company could meet its goal of selling 500,000 cars this year. In the first nine months of this year, the company delivered 318,000 electric vehicles. To achieve that goal, more than 180,000 cars will need to be sold in the fourth quarter, which will require Tesla to set a new record.
Joseph Spak, an analyst at RBC Capital Markets, said in a note to investors that this was “not an sustainable goal” but that it now “seems increasingly difficult” to achieve.
But in the long run, Tesla’s ability to sell nearly half a million cars a year represents a major shift for the company. More than a year ago, Tesla was busy raising money to allay fears that the company might run out of cash.
But Tesla’s super-factory near Shanghai late last year has boosted car production. The company also unveiled a new SUV, model Y, which has more space than the Model 3, which has many components and the Model 3 is universal.