Tesla has posted a drop in quarterly deliveries of its electric vehicles for the first time in four years, slipping far south of estimates due to slow demand and stiff competition from rivals.
Elon Musk’s company said it delivered 386,810 vehicles in the three months to March 31, down about 20 per cent from the previous quarter and down 8.5 per cent from a year ago. This is Tesla’s first year-on-year sales decline since the second quarter of 2020.
The EV maker also missed the consensus Wall Street estimate of 449,080 deliveries by more than 62,000, its largest margin to date. It failed to even produce this number of vehicles, making only 433,371 cars during the first quarter of 2024, the majority of which were its Model 3/Y.
Tesla said on Tuesday that the drop was “partially due to the early phase of the production ramp of the updated Model 3 at our Fremont factory and factory shutdowns resulting from shipping diversions caused by the Red Sea conflict and an arson attack at Gigafactory Berlin.”
The stock fell 5.5 per cent when the markets opened in New York. It is down over 33 per cent this year due to sluggish demand for its cars.
The company will post its financial results for the first quarter of 2023 after market close on 19 April.
In January, Tesla reported fourth-quarter sales of 484,000, a near 20 per cent rise year on year. But this fell short of Chinese rival BYD’s record output of 526,000 vehicles posted in the same week.
BYD has pursued an aggressive pricing strategy in order to increase its market share, something which Tesla has struggled to match.
And while electric cars have taken off in China, progress in the UK has been slower thanks to weak infrastructure needed for recharging the vehicles.
What’s more, the cost and time of repairs is greater in the UK due to a shortage of replacement parts, poor cooperation between insurance firms and Chinese manufacturers and a lack of technical knowledge of the new vehicles.
Tesla has also faced teething issues with its Cybertruck, a full-size pickup truck designed to “go anywhere”, such as production line delays.