By Akash Sriram
(Reuters) -Tesla missed market estimates for third-quarter deliveries on Monday as planned upgrades at its factories to roll out a newer version of the Model 3 mass-market sedan forced production halts.
Some analysts believe the upgrades could spark a rebound in deliveries in the fourth quarter by allowing Tesla to refresh its line-up with models that could compete better with offerings from U.S. rivals such as Ford and BYD in China.
Deliveries of the updated and higher-priced Model 3 compact sedan are expected to start in the fourth quarter, while a Cybertruck launch event is also planned later this year.
The electric-vehicle maker, which will report quarterly results on Oct. 18, handed over 435,059 vehicles in the three months to Sept. 30, down nearly 7% from the preceding quarter, but retained its target to deliver 1.8 million vehicles this year.
An LSEG poll of eight analysts had estimated deliveries of 459,949 vehicles, with the lowest at 442,000 and the highest at 511,405.
Shares of the EV maker reversed course to rise marginally after dropping nearly 3% following the news of the delivery miss.
Tesla has also been cutting prices aggressively to counter the effect of a slowing EV market, while fending off competition from upstarts and legacy players.
In the third quarter, Tesla cut prices of its premium Model S and Model X cars by as much as 21% in main markets China and the United States.
It also boosted discounts on Model 3 and Model Y in the United States, while cutting prices of Model Y and offering other incentives in China.
“They are going to keep the pressure up on their competitors,” said Thomas Martin, senior portfolio manager at Globalt Investments, which holds Tesla shares, adding the company could cut prices even further.
Tesla produced 430,488 vehicles in the third quarter, versus 479,700 in the previous three-month period.
Meanwhile, electric-pickup maker Rivian Automotive reported third-quarter deliveries above analysts’ estimates and reaffirmed its annual production target of 52,000 vehicles.
“While Tesla remains a dominant force in the US EV market for 2023, there is an increasing demand for a wider range of EV options to satisfy the growing consumer interest in electric vehicles,” said Ashwin Amberkar, analyst at Canalys Research.
Deliveries of Tesla’s premium vehicles, Model S and Model X, rose to about 16,000 units in the third quarter. Their deliveries, however, account for just about 4% of the total number.
(Reporting by Aditya Soni and Akash Sriram in Bengaluru; Editing by Arun Koyyur and Anil D’Silva)