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(Reuters) -Tesla Inc’s third-quarter revenue missed Wall Street estimates on Wednesday as the electric carmaker led by billionaire Elon Musk delivered fewer vehicles than expected, sparking concerns about softening demand.
Tesla (NASDAQ:TSLA) shares slumped as much as 7% after the results.
“Raw material cost inflation impacted our profitability along with ramp inefficiencies” from its new factories in Berlin and Texas, and the production of its new 4680 batteries, according to Tesla’s statement.
It also said it had a negative foreign exchange impact of $250 million on its earnings, as the U.S. dollar strengthened against major currencies.
“Logistics volatility and supply chain bottlenecks remain immediate challenges, although improving,” Tesla said.
Tesla CEO Musk is expected to speak with analysts on a conference all and address questions about whether the world’s most valuable automaker will stick to its target of boosting deliveries by 50% this year. Some have questioned whether demand is softening.
Tesla achieved record quarterly deliveries largely thanks to its rampup in China. But the most prominent proponent of electric vehicles has seen its shares tumble about 50% from record highs last November as investors were spooked by a cooling global economy and Musk’s bid to buy social media company Twitter.
Tesla’s revenue for the third quarter was $21.45 billion, short of analysts’ estimates of $21.96 billion, according to IBES data from Refinitiv.
Early this month, Tesla said it delivered 35% more vehicles in the July-September period than in the previous quarter, but the number was shy of vehicle production and analysts’ estimates.
Tesla blamed challenges transporting vehicles, but some analysts were also concerned that demand may have softened.
Some analysts said Tesla will have a hard time maintaining premium pricing and margins with the global economy cooling and as it ramps up production of new factories.
The company’s third-quarter automotive gross margin was 27.9%, down from 30.5% last year.
This month, Musk raised hopes of a share buyback when he said “Noted” on Twitter in response to a major investor’s call for a buyback.
Musk has been trying to raise cash to fund his $44 billion deal to take Twitter Inc (NYSE:TWTR) private. Some experts say Musk may need to sell about $3 billion more in stock after the earnings announcement to help fund the deal.
Tesla’s revenue for the third quarter was $21.45 billion, compared with analysts’ estimates of $21.96 billion, according to IBES data from Refinitiv.
