Tesla’s third-quarter revenue fell short of Wall Street expectations on Wednesday, prompting its stock price to drop more than 4% after markets closed.
The company posted $3.3bn in profit and $21.45bn in revenue. The results come two weeks after the electric carmaker said it produced 22,000 more vehicles than it delivered, signaling to some analysts that the company was not able to maintain demand.
The company attributed the delivery shortfall to transportation issues and said in its earnings report that it was becoming increasingly expensive to secure capacity to transport its vehicles.
Wall Street had expected the company to report $3.9m in profit and $21.96bn in revenue on Wednesday. While the company fell short, its financial results do show that Tesla was able to recover from its shaky second quarter of 2022 when it saw a drop in profit after a shutdown of its Shanghai factory and production slow downs.
While some analysts remain bullish about Tesla’s growth, they caution that the company needs to be careful about how much it increases the prices of vehicles given the wider economic slowdown.
The results also come as Elon Musk, Tesla’s chief executive, nears a deal to buy Twitter, which could require him to sell more of his Tesla shares to fund the purchase.
Some experts don’t think the market slowdown, or the Twitter deal, will hurt Tesla’s position as a leader in the electric vehicle industry.
“The market will prove challenging, as it has for all [automakers],” said Alyssa Altman, head of transportation and mobility at the digital transformation consultancy Publicis Sapient. “Inflation is high, energy bills in Europe are increasing and China’s economic slowdown is impacting the rest of the world. The competition is heating up and Tesla will need to work to keep its aura. Nevertheless, short-term losses due to market forces and supply chain realities will not stop Tesla from continuing to be the top market competitor in the EV space.”