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Tesla Deliveries Drop as China Covid Shutdowns Take Toll

World’s biggest EV maker blamed resurgence in Covid-19 cases in China for ending a nearly two-year-long run of record quarterly deliveries

Tesla has ramped up production at its factory in Shanghai and is now aiming to make 22,000 EVs a month.
Tesla has cut waiting times for its Model 3 and Y cars in China, thanks largely to its move to expand the size of its factory in Shanghai. This pic shows a truck carrying new Tesla cars from the plant in eastern China, on May 13, 2021. Photo: Aly Song, Reuters.


US EV maker Tesla saw its delivery numbers drop 17.9% in the second quarter, as China’s Covid-19 lockdowns took their toll on production and supply chains.

The world’s biggest electric car maker said on Saturday that it delivered 254,695 vehicles in the April to June period, compared with 310,048 vehicles in the preceding quarter, ending a nearly two-year-long run of record quarterly deliveries.

A resurgence in Covid-19 cases in China had forced Tesla to temporarily suspend production at its Shanghai factory and also affected suppliers’ facilities in the country.

Tesla is ramping up production at the Shanghai factory with the easing of the Covid-19 lockdown, which will help boost deliveries in the second half.


Also on AF: China’s EV Big Three Bounce Back With Strong June Sales


Early in June, Chief Executive Officer Elon Musk told executives that he had a “super bad feeling” about the economy and needed to cut about 10% of staff at the electric car maker.

Musk has said demand for Tesla vehicles remains strong, but supply-chain challenges still remain.

In June, Tesla again hiked prices for some of its models in the United States and China after Musk had warned of significant inflationary pressure in raw materials and logistics.

June 2022 was the highest vehicle production month in the company’s history, Tesla said in a news release.

Analysts had expected Tesla to report deliveries of 295,078 vehicles for the April to June period, according to Refinitiv data. Several analysts had slashed their estimates further to about 250,000 due to China’s prolonged lockdown.

The world’s most valuable automaker has posted record deliveries every quarter since the third quarter of 2020, weathering pandemic and supply-chain disruptions better than most automakers.


China Key to Tesla Production Lift

China has been instrumental in Tesla’s rapid increase of vehicle production, with the low-cost, lucrative Shanghai factory producing roughly half of the company’s total cars delivered last year.

Musk said in April that Tesla’s overall vehicle production in the second quarter would be “roughly on par” with the first quarter, driven by a China rebound.

But he recently said Tesla had a “very tough quarter,” citing production and supply-chain challenges in China. Musk also said Tesla’s new factories in Texas and Berlin are “gigantic money furnaces” losing billions of dollars as they struggle to increase production quickly.

Tesla shares have fallen 35% so far this year, hit by Musk’s $44 billion proposed acquisition of Twitter Inc, the China lockdown and macroeconomic uncertainties.


  • Reuters with additional editing by Sean O’Meara


Read more:

Tesla Layoffs Hit Autopilot Driver-Assistant System Unit

Musk Says Tesla ‘Losing Billions’, Trying Not to Go Bankrupt

Tesla to Suspend Shanghai Production for 2 Weeks, Says Memo



Sean O'Meara

Sean O'Meara is an Editor at Asia Financial. He has been a newspaper man for more than 30 years, working at local, regional and national titles in the UK as a writer, sub-editor, page designer and print editor. A football, cricket and rugby fan, he has a particular interest in sports finance.


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