Tesla delivers record number of cars after price cuts

Electric car company Tesla has delivered a record number of cars in the second quarter – as its strategy to lower prices paid off and US consumers took advantage of tax credits.

The carmaker beat market expectations and delivered 466,140 cars in the three months to the end of June, up 83.5% on a year ago and an increase of 10.4% on the first three months of the year.

It produced an even greater number of vehicles – 479,700 – exceeding its own ambitious targets of turning out an extra 50% of cars a year.

Analysts had expected the company headed by entrepreneur and Twitter owner Elon Musk, to deliver just 445,000 vehicles.

The vast majority of sales were of the Model 3 and Model Y, which came down in price a number of times this year. Combined with US government subsidies, customers could own one of the models for roughly $33,000 (£26,021) when federal tax credits are applied.

Affordability had been identified by Mr Musk as a key factor that was limiting sales.

As a result, the cost of Tesla’s vehicles was brought down in January and March to keep the company competitive with rivals, as traditional carmakers continue to boost their electric vehicle production.

Production and delivery was also up in the first three months of the year, but had failed to reach the 50% increase in deliveries target.

Tesla had struggled with supply chain issues which hampered its ability to get cars to customers late last year. In the final three months of 2022 it delivered 55,760 fewer vehicles than it produced due to logistical problems and slowing demand, fuelled by rising interest rates and recession fears.

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There had been concerns in Tesla that Mr Musk was distracted with his new ownership of Twitter but the record-breaking sales suggest the worries have been overcome. Tesla stock in late December hit a two year low, partly due to the concerns.

In May this year, Mr Musk announced he was stepping down as Twitter chief executive and appointed Linda Yaccarino.

The share price rallied 142% across the first six months of 2023 – and has meant Mr Musk is once again the world’s richest man after being knocked off the top spot in December.