by the numbers

Tesla sales fall for second straight quarter despite price cuts, but decline not as bad as expected

The Austin, Texas, company said Tuesday that it sold 443,956 vehicles from April through June, down 4.8 percent from 466,140 sold the same period a year ago. Photo courtesy of Tesla

Tesla's global sales fell for the second straight quarter despite price cuts and low-interest financing offers, another sign of weakening demand for the company's products and electric vehicles overall.

The Austin, Texas, company said Tuesday that it sold 443,956 vehicles from April through June, down 4.8 percent from 466,140 sold the same period a year ago. But the sales were better than the 436,000 that analysts had expected.

The better-than-expected deliveries pushed Tesla's stock up 10 percent Tuesday. The stock is down about 7 percent so far this year, but it has nearly erased larger losses from prior months. Tesla shares had been down more than 40 percent earlier in the year, but are up more than 60 percent since hitting a 52-week low in April.

Demand for EVs worldwide is slowing, but they're still growing for most automakers. Tesla, with an aging model lineup and relatively high average selling prices, has struggled more than other manufacturers. Still it retained the title of the world's top-selling electric vehicle maker.

For the first half of the year, Tesla sold 830,766 electric vehicles worldwide, handily beating China's BYD, which sold 726,153 EVs.

Tesla also sold over 33,000 more vehicles during the second quarter than it produced, which should reduce the company's inventory on hand at its stores.

Tesla's sales decline comes as competition is increasing from legacy and startup automakers, which are trying to nibble away at the company's market share. Most other automakers will report U.S. sales figures later Tuesday.

Tesla gave no explanation for the sales decline, which is a harbinger of what to expect when it posts second-quarter earnings on July 23.

Nearly all of Tesla’s sales came from the smaller and less-expensive Models 3 and Y, with the company selling only 21,551 of its more expensive models that include X and S, as well as the new Cybertruck.

The sales decline came despite Tesla knocking $2,000 off the prices of three of its five models in the United States in April. The company cut the prices of the Model Y, Tesla’s most popular model and the top-selling electric vehicle in the U.S., and also of the Models X and S.

The April cuts reduced the starting price for a Model Y to $42,990 and to $72,990 for a Model S and $77,990 for a Model X. Last week, Tesla lopped $2,340 off the $38,990 base price of some newly revamped Model 3s that were in the inventory shipped to its stores.

In addition, Tesla in May offered 0.99 percent financing for up to six years on the Model Y. In June, it offered interest as low as 1.99 percent for three years on the rear-wheel-drive Model 3. Typical new-vehicle interest rates average just over 7 percent, according to Edmunds.com.

Also during the quarter, Tesla knocked roughly a third off the price of its “Full Self Driving” system — which can’t drive itself and so drivers must remain alert and be ready to intervene — to $8,000 from $12,000, according to the company website.

Jessica Caldwell, head of insights for Edmunds.com, said Tesla is having trouble in a market where most early adopters already have EVs, and mainstream buyers are more skeptical that electric cars can meet their needs.

Tesla's “haphazard” price cuts don't work as well as they once did because consumers now expect them, she said. “We’ve seen the automaker exhaust its bag of tricks by lowering prices and increasing incentives to spur demand without much success in the U.S. market,” Caldwell said.

Also, Tesla's aging model lineup doesn’t look much different than it did years ago she said. And with price cuts, used Tesla prices tumbled. Anyone wanting a Tesla can get a far better deal buying a used one, Caldwell said.

Caldwell doesn’t see any big catalyst this year that would boost Tesla sales unless gasoline prices spike, and she said Musk's shift to the right since taking over Twitter has hurt the brand's image.

Wedbush analyst Dan Ives wrote in a note to investors Tuesday that second-quarter sales were a “huge comeback performance” for Tesla. “In a nutshell, the worst is in the rearview mirror for Tesla,” he wrote. The company, he wrote, cut 10 percent to 15 percent of its workforce to reduce costs and preserve profitability. “It appears better days are now ahead as the growth story returns,” Ives wrote.

In its letter to investors in January, Tesla predicted “notably lower” sales growth this year. The letter said Tesla is between two big growth waves, one from global expansion of the Models 3 and Y, and a second coming from the Model 2, a new, smaller and less expensive vehicle with an unknown release date.

Tesla is scheduled to unveil a purpose built robotaxi at an event on Aug. 8.

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A View From HETI

The world is trending toward producing 82 million metric tons of flame-retardant plastic waste by 2030. Photo via Unsplash

Researchers at Rice University have developed a new technique to efficiently recycle electronic waste and harvest critical minerals using rapid heating.

Most electronic devices use flame-retardant plastic. The plastic is formulated from a critical metal called antimony.

However, recapturing antimony is typically a challenging task since it first has to be released from the plastic. As it is released, other compounds can form, such as organic bromides, which are toxic and difficult to capture. However, the organic bromides can also be reused and have applications in industrial chemicals when safely captured.

“Conventionally heating the plastic releases the antimony in a volatile and difficult-to-collect form as well as creating and releasing hazardous organic bromide compounds,” Leo Haoxin Ye, first author of the paper and a graduate student at Rice, said in a news release. “Other options are risky or more impractical, such as using strong acids, organic solvents or multistep treatment options.”

To address this issue, leading Rice chemistry professor James Tour, Ye and their team adapted Tour’s flash Joule heating technique, which heats materials to hundreds of degrees Celsius in milliseconds, according to Rice.

The team ground up flame-retardant plastic waste and placed it between two sheets of electrically heated carbon paper before using what’s known as isothermal-clamped flash Joule heating to release and collect the antimony.

The team found that limiting the time the plastic spent in the high temperature range dramatically reduced the production of the hazardous organic bromide compounds. The plastic remained between 200 degrees and 500 degrees Celsius for only 9.4 milliseconds, according to Rice.

Through the process, the team recovered 90 percent of antimony from tested materials and converted 83 percent of the bromide into hydrogen bromide. Their findings were published this month in the journal Nature Chemical Engineering.

“Isothermal-clamped flash Joule heating could improve the speed, safety and practicality of antimony recovery from discarded flame-retardant plastics,” Tour added in the release. “This represents an important step forward to conserving and reusing our critical antimony supply while also regenerating bromide salts for reuse.”

The study noted that the world is currently trending toward producing 82 million metric tons of flame-retardant plastic waste by 2030, which adds to the fact that e-waste is the fastest-growing solid waste stream in the world.

The research was funded by the Air Force Office of Scientific Research and the U.S. Army Corps of Engineers.

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