Tesla deliveries fall 18% due to Covid shutdowns in China, supply issues

In a nutshell: Tesla recorded its first sequential decline in vehicle deliveries for more than two years during Q2, but it wasn’t due to a lack of demand. The Covid-related shutdowns in China and parts shortages were the main factors behind the second quarter’s 18% drop.

The electric vehicle giant said over the weekend that it had delivered 254,695 vehicles in the April to June period. While it marks a 26% increase over the 201,250 vehicles delivered in the second quarter of 2021, that figure for the preceding quarter (Q1 2022) stood at 310,048.

At the start of the second quarter, Wall Street analysts had been expecting 350,000 deliveries from Tesla, though that number was revised after Elon Musk said it would be closer to Q1 levels and the impact of the Chinese shutdowns was taken into account.

Tesla’s Shanghai factory was responsible for about half the company’s output last year, but a resurgence in cases combined with China’s zero-tolerance approach to outbreaks saw production temporarily suspended at the facility and those belonging to its suppliers. It led to Tesla increasing output at the Fremont, California, plant to try and make up the shortfall.

Tesla said that the Covid-related/supply issues eased near the end of the quarter, and it output the highest monthly production volume in the company’s history in June.

The world’s largest EV company has found itself hitting the headlines more often than usual recently. Musk said he wanted to cut a percentage of the company’s jobs—a move that has led to lawsuits—due to his “super bad feeling” about the economy. The price of its vehicles increased by $6,000, and employees who returned to the Fremont plant following Musk’s demands found there weren’t enough desks or parking spaces.

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