Tesla plays ‘whack-a-mole’ with snags as deliveries fall for first time in two years

Tesla said on Saturday it delivered 2,54,695 vehicles in the second quarter, down about 18% from the first quarter

Tesla Inc faces a series of hurdles ranging from production snags to rising inflation that may hit profits, Wall Street analysts said on Tuesday, as the electric-car maker reported a fall in deliveries for the first time in two years.

(Sign up to our Technology newsletter, Today’s Cache, for insights on emerging themes at the intersection of technology, business and policy. Click here to subscribe for free.)

Stung by China's COVID-19 lockdowns and soaring costs, Tesla said on Saturday it delivered 2,54,695 vehicles in the second quarter, down about 18% from the first quarter.

Supply chain snarls at the company's newer facilities in Texas and Germany also hurt production, with analysts warning that these issues may crimp Tesla's profits.

The world's largest electric-car maker's shares fell more than 3% but reversed course to close up 2.6%, benefiting from a rally in growth stocks.

So far this year, the stock has lost about a third of its value.

"Tesla's lustre has dimmed yet again with this latest drop in deliveries coming in lower than expectations," Hargreaves Lansdown analyst Susannah Streeter said, adding that this was a setback to the carmaker's ambitions to stay at the front of the EV pack.