Tesla was able to avoid a huge sink in first quarter sales despite coronavirus-related shutdowns in China and the US, according to new figures that were just released by the company. Other automakers reported big dips in sales earlier this week as the quarter came to a close, though losses are expected to be even more brutal in the second quarter as more of the world stays at home in an effort to suppress the spread of the novel coronavirus.
Tesla delivered 88,400 vehicles in the first quarter of 2020, according to the release. That’s down from its best sales quarter ever at the end of 2019, where Tesla delivered around 112,000 vehicles. But it’s not nearly as low as the 63,000 the company shipped one year ago in the first quarter of 2019, and it beats out most estimates from Wall Street analysts as well as those from some of Tesla’s biggest supporters.
Production did not taper off, either, despite the shutdowns. Tesla says it has made 102,672 cars so far this year, the second most in a financial quarter for the company. Overall, it was the company’s best first quarter ever when it comes to production and sales figures.
Tesla partially attributed the higher-than-expected numbers to the “record levels of production” from the new Gigafactory in Shanghai, China. This was the first full quarter that the new factory was up and running, though it did shut down for around two weeks in February in compliance with a coronavirus-related order from the government, which Tesla said was one of a number of “significant setbacks” it faced. It’s not clear exactly how much of a boost it received, though, as Tesla doesn’t separate out sales and production figures by region.
Tesla has kept making deliveries in the US despite shutting down production at its Fremont, California factory, and it also started delivering the Model Y — its fifth electric vehicle — this quarter as well. The company is coming off its best year ever; Tesla sold more cars in 2019 than it did in the two previous years combined, largely thanks to the strength of the Model 3, which it started shipping to Europe and China at the start of the year.
CEO Elon Musk had warned all the way back in the middle of last year that the beginning of 2020 would be “tough” for Tesla, well before anyone knew that the world would be battling a pandemic. During a call with analysts in July 2019, Musk said “Q1 [2020] will be tough. Q2 will be not as bad, but still tough.” After that, he said, he expected the third and fourth quarters of 2020 to be “incredible.”
Both he and Tesla’s chief financial officer have warned that the company’s sales tend to drop at the beginning of each year due to “seasonality” in the market, but they pick back up by spring. The company saw some of this impact last year when it suffered one of its worst financial losses in history on those 63,000 deliveries. But that delivery drop was also the result of the company running into logistical nightmares as it started shipping the Model 3 to Europe and China for the first time.
