Tesla (TSLA), whose shares are dropping over 5% on today’s early U.S. premarket, yesterday after the market close reported it managed to produce only 430,488 EVs and deliver 435,059 vehicles in Q3 2023. The iconic electric car maker said the sequential sales decline was “due to planned shutdowns for factory upgrades”. Tesla delivered 466,140 electric vehicles in the previous quarter, significantly beating expectations for about 445,000 units. Finally, the company produced 479,700 vehicles during the same period last year. In the first quarter of 2023, Tesla delivered 422,875 vehicles and produced 440,808 vehicles. Crucially, Tesla still expects full-year vehicle deliveries of 1.8 million vehicles to be attainable.

Furthermore, operating margin fell to 7.6%, down from 9.6% last quarter and 17.2% a year ago. Margins were reportedly dragged down by lower average selling prices due to mix and pricing. Total GAAP gross margin was 17.9%, compared with 25.1% in the year-ago quarter and 18.2% in the prior quarter. The gross profit margin is expected to be 18.0%. Previously, the company's chief financial officer said it expected gross profit margins to remain above 20% in fiscal 2023 and average selling prices to be around $40,000, but several price cuts have weakened that number.

Also, Tesla CEO Elon Musk said that he sees the company facing "enormous challenges" regarding its electric ‘Cybertruck’ pickup truck, noting it is likely to take 12 to 18 months to make the product cash flow positive. Musk also noted the company has already received over a million reservations for the vehicle and that the company plans to make around 250,000 Cybertruck a year by 2025. Musk repeatedly complained that high interest rates and multiple wars are taking on consumer sentiment and purchasing power.