Tesla Faces Setback: First Quarterly Vehicle Delivery Decline Since 2020

Apr/03/2024

Tesla's share value took an outsized dip on Tuesday, as the electric-vehicle giant observed its first yearly decline in vehicle deliveries since the pandemic-roiled year of 2020, opening the second quarter to turbulence. The company reported 386,810 deliveries of this year's first quarter, which is quite short of the 457,000 projected by analysts and compared to the FactSet-compiled mean of 11 estimates. This, after a whole range of problems was attributed to it: supply chain disruption from Houthi militia attacks in the Red Sea and production halts at the Tesla German factory by environmental activists. Besides, the company was entering into stiffer competition in the country from home-based EV makers and getting a lukewarm response in the U.S. to its newly launched Cybertruck. All this came as Tesla was embarking on a production ramp of the refreshed Model 3 and wrestling with discounts and incentives that, in response to increasing competition, had to be less effective at moving metal than anything it had ever done before. Meanwhile, Tesla's stock has decreased by 29% in the first quarter, registering a punishing period of increasing scrutiny and operational recalibration for the company as it navigates its way through a competitive and fast-evolving automotive landscape. An earnings call coming up on April 23 should shed more light on the strategic responses and outlook going forward. Chart below shows number of Tesla vehicles delivered worldwide from 1st quarter 2016 to 4th quarter 2023.