Tesla Stock Declines Following 8.5% Drop in Deliveries Compared to Last Year

Tesla shares declined on Tuesday following the company’s announcement of a decrease in vehicle deliveries during the first quarter, marking the first annual decline since 2020, when the global pandemic disrupted production.

Here are the key figures:

  • Total deliveries Q1 2024: 386,810
  • Total production Q1 2024: 433,371

Vehicle production saw a decrease of approximately 1.7% compared to the previous year and 12.5% sequentially for Tesla, although not as significantly as the 8.5% annual drop in deliveries.

Tesla does not provide a breakdown of sales by model, but it disclosed that it manufactured 412,376 Model 3/Y cars and delivered 369,783 of them. Additionally, it produced 20,995 units of other models and delivered 17,027.

In the same period last year, the electric automaker reported 422,875 deliveries and production of 440,808 vehicles. In the fourth quarter of 2023, Tesla reported 484,507 deliveries and production of 494,989 vehicles.

Deliveries serve as the closest approximation of sales as reported by Tesla, although they are not precisely defined in the company’s shareholder communications.

Tesla’s delivery figures for the quarter fell well short of even the most pessimistic forecasts from analysts.

Based on an average of 11 estimates gathered by FactSet, analysts had anticipated deliveries to be approximately 457,000 by the end of March. Projections varied from a high of 511,000 deliveries to a low of 414,000 for the first quarter, with revised estimates in March spanning from 414,000 to 469,000 deliveries.

Troy Teslike, an independent researcher in the automotive industry whose analyses are closely monitored by Tesla enthusiasts, had predicted deliveries to be around 409,000.

Projections ranged from 511,000 to 414,000 Q1 deliveries, with March revisions from 414,000 to 469,000.

Over the weekend, Tesla’s head of investor relations, Martin Viecha, circulated a consensus compiled by the company based on estimates from 30 analysts to a select group of investors.

Tesla encountered several obstacles during the first quarter.

Incidents of Houthi militia attacks on shippers in the Red Sea disrupted Tesla’s supply chain, leading to a temporary halt in production at its German factory near Berlin in January. Additionally, in March, environmental activists ignited fires near the same factory, resulting in power shortages and another production pause for Tesla.

Tesla acknowledged in a statement that the decline in production volumes was partly attributable to the initial phase of ramping up production for the updated Model 3 at its Fremont, California facility, along with scheduled factory shutdowns.

In China, Tesla faced stiff competition from local electric vehicle manufacturers like BYD and newcomers like Xiaomi. Following slow sales figures for its China-manufactured cars in January and February, Tesla scaled back production of its Model 3 and Model Y at its Shanghai plant, and adjusted workers’ schedules from 6½ days a week to five.

In the United States, reviews for Tesla’s latest model, the Cybertruck—a distinctive angular pickup truck—were mixed. The company began selling this model in limited quantities in December of the previous year.

Projections ranged from 511,000 to 414,000 Q1 deliveries, with March revisions from 414,000 to 469,000.

Tesla experienced a decrease in the effectiveness of discounts and incentives in boosting sales volume compared to previous periods.

Towards the end of the first quarter, Tesla CEO Elon Musk mandated that all sales and service personnel in North America install and demonstrate the latest version of the company’s premium driver assistance system to customers before delivering their vehicles.

Marketed as Full Self-Driving, the system does not render Tesla cars fully autonomous, necessitating human intervention for steering or braking as needed.

According to a report by Reuters citing survey data from Caliber, the pool of potential Tesla customers in the U.S. diminished during the first quarter of 2024, partly attributed to Musk’s public persona.

Musk remains confident that Tesla’s customer and shareholder base will remain loyal to the brand and company, despite controversies surrounding his political views and provocative statements, both within and outside of his company, X.

Tesla shares saw a significant decline of 29% in the first quarter, marking the largest drop since the end of 2022 and the third-largest quarterly decrease since the company’s IPO in 2010. On Tuesday, Tesla stock closed approximately 5% lower at $166.63 per share.

The company has scheduled an earnings call for April 23 to discuss its quarterly results.

Sajda Parveen
Sajda Parveen
Sajda Praveen is a market expert. She has over 6 years of experience in the field and she shares her expertise with readers. You can reach out to her at [email protected]
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