Tesla shares closed down 8.6% on Monday, their biggest one-day drop in four months. The company's third-quarter vehicle deliveries fell short of Wall Street expectations due to logistical hurdles, and a slowing economic growth outlook also raised doubts about demand for its vehicles. The slump wiped more than $71 billion off Tesla's market value and dragged down the shares of other electric car makers.
While Tesla delivered another record in the third quarter, it missed market expectations and the gap between production and delivery figures is widening as the company struggles to get enough capacity at a reasonable cost during peak hours. In addition to the shortfall in deliveries, investors and analysts are also concerned about demand for Tesla vehicles due to higher prices for Tesla vehicles, rising borrowing costs, and a gloomy outlook for global economic growth.
"While Tesla points to supply constraints as an important factor limiting deliveries, there is also a strong likelihood of a drop in demand," said JPMorgan analyst Ryan Brinkman.
Analysts warned that auto demand could lose steam in the coming quarters, with Toyota's U.S. sales falling 7.1%. "As far as shipping is concerned, we are not facing any problems," the Japanese automaker said.
Tesla needs to deliver more than 450,000 vehicles in the fourth quarter to meet its target of a 50% increase in annual deliveries. The company has reportedly set a goal of producing about 495,000 Model Y and Model 3 units during the period.
Brandon Pizzurro, an analyst at GuideStone Capital Management, said: "The broader concern is not just that they missed delivery expectations, it may be more of an ongoing concern about all the smaller start-up electric car companies. That could put us behind the curve in EV production."
Still, analysts expect Tesla's manufacturing margins to remain strong in the fourth quarter, thanks to Tesla's pricing power and its ability to use China as an export hub for many countries. Meanwhile, Tesla rival Rivian Automotive said Monday that it produced 7,363 vehicles in the third quarter, up 67% from the previous quarter, and maintained its full-year production target of 25,000 vehicles.