Tesla sales fell sharply in the first quarter, marking the automaker’s first year-over-year decline in quarterly deliveries since 2020 and fueling Wall Street’s concerns over the company’s growth expectations this year.
The Elon Musk electric vehicle (EV) manufacturer on Tuesday said it delivered 386,810 vehicles from January through March, down 8.5 percent from the 423,000 it sold during the same period last year. FactSet analysts expected the Austin, Texas-based company to deliver 457,000 vehicles.
The company’s news comes amid increased competition worldwide, slower electric vehicle demand, and lower prices that failed to attract more buyers.
Tesla blamed its lower sales partly on phasing in its updated version of the Model 3 sedan at its factory in Fremont, California, plant shutdowns caused by shipping diversions in the Red Sea, and a suspected arson attack that knocked out power at its German factory.
In a January letter to investors, the company warned of “notably lower” sales growth in 2024. The letter said Tesla is between two waves of large growth: one from the global expansion of its Models 3 and Y, and a second coming from the smaller, less expensive Model 2.
Tesla is facing growing pressure in an increasingly competitive electric vehicle market.
China’s BYD briefly claimed the top-seeling spot for electric vehicles in the fourth quarter of 2023 with sales of 341,043 vehicles, according to a press release in January. The company said it sold more than three million electric vehicles last year, up by 61.9 percent over the prior year.
The company sold 300,114 all-electric vehicles globally during the first quarter of this year, up 13 percent over the same period last year.
Last year, Tesla slashed prices by as much as $20,000 on some models in the United States.
In February, the company temporarily trimmed $1,000 off its best-selling Model Y. The price reduction cut into Tesla’s profit margins, spooking investors.
“New Model Y RWD and Long Range AWD prices reduced for deliveries now through February 29,” the company said on its website, InsideEVs reported. Prices went back up on March 1.
The news of slower sales sent Tesla shares tumbling by more than 6 percent at the opening bell on Tuesday, continuing an extended decline.
So far this year, the company’s stock has plunged more than 3o percent as investors continue selling off shares over growing uncertainty of Tesla’s story of tremendous growth.
Tesla stock ranks as the worst-performing stock in the S&P 500 Index this year, according to The Wall Street Journal.
Last week, Wedbush analyst Dan Ives, normally bullish on the stock, wrote in an investor note that first-quarter deliveries would be a “nightmare quarter” for Tesla.
He gave the stock an Outperform rating but cut his one-year price target from $315 to $300.
Tesla lost production time in Germany after it lost its power supply, and an upgrade to the Model 3 also slowed U.S. production. Mr. Ives estimated that China sales slid from 3–4 percent during the period.
Tesla’s top sellers, Models 3 and Y, fell 10.3 percent year over year, to 369,783. Sales of the X and S models, along with its new Cybertruck, jumped almost 60 percent, to 17,027.
The company produced 433,371 vehicles in the first quarter, down from 440,808 during the year-ago period.
Mr. Ives suggested that investors’ patience is wearing thin. “For Musk, this is a ‘fork in the road’ time to get Tesla through this turbulent period. Otherwise, darker days could be ahead,” the analyst wrote.
Softer-than-expected first-quarter sales are reducing analysts’ expectations for quarterly earnings.
Citi Analyst Itay Michaeli cut his full-year 2024 earnings per share estimate from $2.78 to $2.71.
Tesla said it would post first-quarter financial results after market close on April 23.
