Tesla fell short of third-quarter delivery expectations due to intense competition in China and Europe, causing a 3.5% premarket drop in the company's shares, as the world's most valuable automaker.
The EV maker handed over 462,890 vehicles in the three months to Sept. 30, up 6.4% from the previous quarter. On average, Wall Street had expected the Elon Musk-led company to deliver 469,828 vehicles, according to 12 analysts polled by LSEG.
The company must deliver a record 516,344 vehicles in the fourth quarter to match last year's delivery total of 1.81 million units. Failing to do so could lead to Tesla's first annual drop in deliveries.
Rising competition in the United States, a lack of European subsidies, and slowing consumer spending in China were all factors that negatively impacted Tesla's quarterly deliveries.
Tesla faces strong competition from Chinese automakers such as BYD and Xpeng, which are rapidly expanding in the world's largest automotive market with support from local government subsidies.
BYD's sales of 443,426 battery electric vehicles in the third quarter were lower than Tesla's. The Chinese EV giant focused on plug-in hybrid vehicles, with deliveries increasing by more than 75% in the latest quarter.
In July, BMW took the lead in the European battery electric vehicle market for the first time, surpassing Tesla. This comes as Tesla has been losing market share to domestic firms, as reported by JATO Dynamics. The price cuts and incentives have also put pressure on Tesla's profit margins.
The company is expected to unveil its robotaxi product at a highly anticipated event on October 10 in Los Angeles as it undergoes a shift in strategy, with a focus on AI-powered autonomous technologies.
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