Tesla sales fall nearly 9% to start the year as competition heats up

2 April 2024, 16:24

MobilityX conference
MobilityX conference. Picture: PA

Sales also fell short of even the most bearish Wall Street expectations.

Tesla sales fell sharply last quarter as competition increased worldwide, electric vehicle sales growth slowed, and price cuts failed to lure more buyers.

The Texas-based company said on Tuesday that it delivered 386,810 vehicles worldwide from January through March, almost 9% below the 423,000 it sold in the same quarter of last year.

Sales also fell short of even the most bearish Wall Street expectations. Auto industry analysts polled by FactSet were looking for 457,000 vehicles deliveries from Tesla. That is a shortfall of more than 15%.

The company blamed the decline in part on phasing in an updated version of the Model 3 at its Fremont, California, factory, plant shutdowns due to shipping diversions in the Red Sea, and an arson attack that knocked out power to its German factory.

AI safety summit
Elon Musk, CEO of Tesla (Kirsty Wrigglesworth/AP)

In its letter to investors in January, Tesla predicted “notably lower” sales growth this year. The letter said Tesla is between two big growth waves, one from global expansion of the Models 3 and Y, and a second coming from the Model 2, a new, smaller and less expensive vehicle with an unknown release date.

Tesla dramatically lowered US prices by up to 20,000 dollars for some models last year. In March it temporarily knocked 1,000 dollars off the Model Y, its top-selling vehicle. Those price cuts narrowed the company’s profit margins and spooked investors.

Analysts polled by FactSet expected the average selling price for Model Y to be 41,000 dollars last quarter, 5,000 dollars less than a year ago and 15,000 dollars lower than the peak of 56,000 dollars in June of 2022.

Shares of Tesla tumbled 5.5% in Tuesday morning trading to 165.54 dollars, continuing an extended decline.

Investors have shaved about 34% off the value of the company so far this year, dumping shares after growing leery of the tremendous growth story that Tesla has been telling.

Wedbush analyst Dan Ives, normally bullish on the stock, wrote in an investor note on Tuesday that the sales were far worse than expected. “This was an unmitigated disaster 1Q that is hard to explain away,” he wrote.

The quarter is a “seminal moment” in the Tesla growth story, Mr Ives wrote, adding that CEO Elon Musk will have to turn the company around. “Otherwise, some darker days could clearly be ahead that could disrupt the long-term Tesla narrative.”

Mr Ives maintained his Outperform rating and cut his one-year price target from 315 dollars, to 300 dollars.

“Street criticism is warranted as growth has been sluggish and (profit) margins showing compression, with China a horror show and competition increasing from all angles,” Mr Ives wrote.

During the quarter, Tesla lost production time in Germany after a suspected arson attack cut its power supply. Mr Ives estimated that China sales slid 3% to 4% during the period.

Deliveries of the Models 3 and Y, fell 10.3% year over year to 369,783. Sales of the company’s other models, the ageing X and S and the new Cybertruck, rose almost 60% to 17,027.

Tesla produced 10% more vehicles than it sold during the first quarter.

Softer than expected first-quarter sales are reducing analyst expectations for quarterly earnings when they are released on April 23.

Citi Analyst Itay Michaeli cut his full year 2024 earnings per share estimate to 2.71 dollars from 2.78 dollars.

Tesla’s sales come against the backdrop of a slowing market for electric vehicles in the US. EV sales grew 47% last year to a record 1.19 million as EV market share rose to 7.6%. But sales growth slowed toward the end of the year. In December, they rose 34%.

Updated EV sales numbers will come later on Tuesday when most carmakers report US sales.

By Press Association

Latest World News

See more Latest World News

Trump Hush Money

Two jurors dismissed from Trump hush money trial

Indonesia Volcano

Thousands evacuated and tsunami alert issued after Indonesian volcano eruption

United24 ambassadors

Polish man suspected of aiding Russian plot to assassinate Zelensky arrested

APTOPIX Trump Hush Money

Jury selection enters pivotal stretch as Trump’s hush money trial resumes

Croatia Election

Croatia’s conservatives believe majority is close despite inconclusive vote

Fire and smoke rise out of the Old Stock Exchange, Boersen, in Copenhagen, Denmark

Copenhagen and Paris mayors discuss lessons learned after fires wreck landmarks

California Google News

Google fires 28 staff after office sit-ins to protest cloud contract with Israel

A police forensic officer at the Christ the Good Shepherd church in suburban Wakely in western Sydney, Australia

Sydney bishop says he ‘forgives’ alleged attacker after church stabbing

French construction worker Damien Guerot

French hero gains Australian residency for confronting shopping centre killer

Firefighters work on a building that was partially destroyed after a Russian bombardment in Chernihiv, Ukraine (Francisco Seco/AP)

Russia reports downing five Ukrainian military balloons

Police officers clean the debris from an earthquake in Uwajima, Ehime prefecture, western Japan

Strong earthquake in Japan leaves nine with minor injuries, but no tsunami

Republican presidential candidate former President Donald Trump meets with Poland’s President Andrzej Duda

Poland’s president becomes latest foreign leader to visit Donald Trump

German far-right politician of the Alternative for Germany (AfD) Bjorn Hocke, centre, attends his trial in the state court in Halle, Germany

Far-right politician stands trial in Germany over alleged use of Nazi slogan

Belgium EU Summit

EU leaders vow to impose tougher sanctions on Iran as Ukraine pleads for support

Asylum seeker Anicet Mayela pictured outside Campsfield House detention centre in Oxfordshire

Asylum seeker raped 15-year-old girl after his deportation flight was blocked by protesting cabin crew

Skye, a Husky dog, sits near floodwater in Dubai

UAE struggles to recover after heaviest recorded rainfall hits desert nation