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Tesla Deliveries Rose in Quarter Elon Musk Calls Exceptionally Difficult

Tesla is expanding production capacity to meet demand, adding new factories as it tries to maintain growth in deliveries by an average of 50%.
Photo: POOL/via REUTERS

Tesla Inc. vehicle deliveries rose in the first quarter, but missed Wall Street expectations as the company struggled with global supply-chain disruptions and a brief Covid-19 shutdown at its Shanghai factory.

“This was an *exceptionally* difficult quarter due to supply chain interruptions & China zero Covid policy,” Tesla Chief Executive Elon Musk tweeted Saturday morning. Tesla employees and key suppliers “saved the day,” he added.

The…

Tesla Inc.
vehicle deliveries rose in the first quarter, but missed Wall Street expectations as the company struggled with global supply-chain disruptions and a brief Covid-19 shutdown at its Shanghai factory.

“This was an *exceptionally* difficult quarter due to supply chain interruptions & China zero Covid policy,” Tesla Chief Executive
Elon Musk

tweeted Saturday morning. Tesla employees and key suppliers “saved the day,” he added.

The electric-car maker said Saturday that it delivered 310,000 vehicles globally in the first three months of the year, rising about 68% from the same period a year ago. Deliveries were roughly flat from the final quarter of 2021.

Tesla is massively expanding production capacity to meet booming demand, adding new factories as it tries to maintain growth in deliveries by an average of 50%. Wall Street expected Tesla to deliver around 317,000 vehicles in the first quarter to generate what is anticipated to be a record quarterly profit when the company posts earnings in a few weeks.

Other major auto makers reported slowing U.S. sales for the first quarter due to vehicle shortages.

Tesla’s largest factory, located in Shanghai, idled production for the last four days of the quarter due to a Covid-19 outbreak in the city, prompting questions over how it might impact the quarter’s deliveries. The factory builds Model 3s and Model Ys, and last year, Tesla sold more than 470,000 cars that were made at the plant.

The 25-million-person city of Shanghai went into a partial lockdown in recent days amid an outbreak of Covid-19 cases. Residents near the Tesla factory were ordered to stay inside their homes, public transportation was halted and traffic in the area was severely limited.

The China factory also shut down for two days earlier in March while the company tested employees for Covid-19.

“I don’t think it’s going to materially affect deliveries,” Tu Le, managing director of Sino Auto Insights, said ahead of the delivery results. “January, February, March are notoriously slow for vehicle sales in China.”

He said sales figures will continue to be closely watched as the impact of pandemic-related lockdowns on the country is unpredictable.

Model S and Model X vehicle deliveries totaled 14,724. Tesla also delivered a combined 295,324 Model 3 sedans and Model Y compact sport-utility vehicles. The company doesn’t release deliveries by region. Additionally, it said it produced 305,407 vehicles.

The Model 3 and Model Y are Tesla’s bestselling cars and the backbone of its production. Mr. Musk said the company doesn’t plan to introduce any new vehicle models in 2022.

Tesla began delivering Model Ys from a new plant, located in Germany, last month. The company is scheduled to open another factory in Austin, Texas, on Thursday. It says the Germany factory will eventually ramp up to 500,000 vehicles a year, starting with the Model Y.

Global supply-chain issues across industries and record inflation rates could impact Tesla’s growth trajectory.

Mr. Musk last month tweeted that Tesla was seeing “significant recent inflation pressure in raw materials & logistics.” Prices for the Model 3 and Model Y have jumped as much as 30% over the past year, according to Bernstein Research.

Still, analysts predict Tesla will continue its pattern of delivering more vehicles each consecutive quarter for the rest of the year with full-year totals to top 1.5 million cars and SUVs.

Write to Meghan Bobrowsky at Meghan.Bobrowsky@wsj.com

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