Tesla tends to pull out all the stops at the end of each quarter, with Chief Executive Officer Elon Musk often rallying the troops to deliver as many vehicles as possible to customers.
This approach probably didn’t work well for Tesla in March, with shelter-in-place orders and distancing guidelines around the globe limiting how many vehicles the company could hand over. While Musk tried to salvage the quarter by introducing a “touchless” delivery option in select locations, the coronavirus pandemic is expected to have done a number on demand for all automakers.
Analysts on average estimate Tesla delivered roughly 77,400 cars worldwide last quarter, the first to include hand-overs of the new Model Y crossover. While that would be a jump from a disappointing result a year ago, it also would mark a more than 30% drop from the record deliveries Tesla reported for the last three months of 2019.
“Tesla typically delivers a disproportionate share of its quarter’s units in the last two weeks of the quarter,” Adam Jonas, an analyst at Morgan Stanley, wrote in a report Monday. “Given the disruption to production and logistics bandwidth, we would be prepared for a weak number.”
The impact the virus has had on the industry has been far more severe and widespread than many were expecting back in January when Tesla predicted it would comfortably exceed 500,000 global deliveries. Business activity in much of the U.S. and Europe has virtually ground to a halt, and Tesla’s factory in Fremont, California, suspended production on March 23. Countless would-be car buyers are staying home, unemployment is rising and consumer confidence is plummeting.
Tesla is far from alone in idling production in the U.S., and the company now has a second plant, near Shanghai, that restarted assembly lines with the help of government authorities in China. The carmaker typically doesn’t give a breakdown in its deliveries reports of results by country or region.
“Given that China was shut down in February and probably slow in March, plus the U.S. froze in March, I’m expecting horrible numbers from everyone,” David Whiston, a Morningstar Inc. analyst, said in an email. “China and the U.S. were 64% of Tesla’s revenue last year for the full year, so a collapse there will be painful.”
Tesla shares, which closed up as much as 112% for the year in mid-February, briefly gave up all 2020 gains when equity markets reached a low point midway through the month. The stock was back up 25% as of Tuesday’s close.