(Adds Tesla statement)

By Marc Vartabedian

SAN FRANCISCO, July 6 (Reuters) – Registrations of Tesla Inc
vehicles in California, by far the largest market of
the luxury electric car maker, fell 24 percent in April from a
year ago, according to data from IHS Markit.

Tesla said in a statement on Friday that it was extremely
misleading to look at registration data from one month, that
deliveries varied month-to-month for operational reasons, and
that deliveries increased by more than 53 percent in the second
quarter compared with a year earlier.

“Looking at the quarter in total is the smallest time frame
in which to obtain reliable, meaningful information about our
deliveries. Deliveries naturally fluctuate from month to month
for a variety of normal operational reasons.

“In the first month of the quarter, Tesla builds cars
primarily for overseas markets, in the second month for North
American markets (not including the West Coast) and in the third
month for the West Coast,” Tesla said in the statement to
Reuters. Focusing on April registrations “cherry picks” data, it

Tesla earlier this week reported first-half global
deliveries of its Model S and its Model X SUV at the low end of
its own forecast, driving down the stock and raising questions
about demand for the older models.

The findings come as investors worry that demand for Tesla’s
luxury Model S sedan is waning ahead of the mass market Model 3

Tesla’s share price more than doubled between early December
and late June as investors bet on Chief Executive Elon Musk’s
strategy to transform the low-volume luxury electric car maker
into a diversified producer of mass market vehicles, storage
batteries, electric commercial trucks and rooftop solar panels.
The company’s market value rose past larger rivals General
Motors Co and Ford Motor Co.

Since June 23, however, Tesla shares have fallen by nearly
20 percent amid concerns that demand for the company’s existing
models is weakening.

Overall sales of electric vehicles in the United States
remain stuck at less than 1 percent of total vehicle sales,
despite a growing number of models fielded by Tesla and other
car makers.

Tesla said earlier this week that battery pack production
problems held back vehicle output in the second quarter until
early June.

California, a haven for environmentalists and techies, is
one of the company’s leading markets. The company does not break
out results by geographic area.

IHS analyst Stephanie Brinley cautioned that a single month
of data could not fully explain Tesla demand.

“If Tesla had an issue with its production for the month,
that could explain” the drop in registrations, she said, noting
in particular the problems with battery pack output. Still, she
said, Tesla’s Model S, launched in 2012, could be in need of a

“They haven’t changed much on the exterior or much on the
package,” and it is a high-fashion car, she said. “I can
certainly understand where Model S sales may be softening a
little bit because it’s an older product. That could be
contributing to the issue.”

Industry data reviewed separately by Reuters showed that the
Model S registrations in California were uneven over the first
four months of 2017, varying by more than 1,000 units
month-to-month. In percentage terms Model S growth peaked in
February, decelerated in March and turned negative in April in

Brinley said it was difficult to assess whether that
reflected demand or availability.

IHS measures vehicle registration, which comes after a sale.
Registration in California and overall in the United States rose
sharply for the combined first four months of the year, but
April showed steep declines. IHS has not released data for May
or June.

Chief Executive Musk in May stoked concerns that the Model 3
would cannibalize demand for the Model S when he told investors
that some “confused” Tesla buyers regarded the new Model 3 as an
upgrade to the Model S, affecting Model S orders. The new car is
a $35,000 mass market vehicle, which costs about half the price
of the Model S.

Tesla reported first-half 2017 global deliveries rose to
47,100 in 2017. Tesla had predicted 47,000 to 50,000. Musk in
May said there would be demand for 100,000 luxury Teslas.

IHS reported April Tesla registrations fell to 2,177 from
2,867 in California. Nationally they dropped nearly 10 percent
to 3,911 from 4,334. For the first four months, California
registrations rose to 6,926 from 5,804 and U.S. registrations
rose to 15,288 from 10,937.

Tesla shares fell 5.6 percent to close at $308.83 on
Thursday, although the stock is up about 45 percent for the year
to date.
(Additional reporting by Joe White in Detroit; Editing by Peter
Henderson and Matthew Lewis)

Read the original article on Reuters. Copyright 2017. Follow Reuters on Twitter.