In a recent report published by Tesla for the first quarter of 2024, it was revealed that the total deliveries of vehicles fell by 8.5% compared to the same period last year, and by about 20% from the fourth quarter. This decline is significant and has raised concerns among investors and analysts about the future prospects of the electric automaker.
The total deliveries for the first quarter of 2024 were reported to be 386,810, while the total production stood at 433,371 vehicles. The production declined by 1.7% year over year and 12.5% sequentially for Tesla. The company did not provide a breakdown of sales by model but mentioned that it produced 412,376 Model 3/Y cars and delivered 369,783, and produced 20,995 of its other models and delivered 17,027.
Tesla faced numerous challenges during the first quarter, which contributed to the decline in volumes. The early phase of the production ramp of the updated Model 3 at the Fremont factory, factory shutdowns due to shipping diversions caused by the Red Sea conflict, and an arson attack at Gigafactory Berlin were cited as reasons for the decline. Moreover, Houthi militia attacks on shippers in the Red Sea disrupted Tesla’s component supply and temporarily suspended production at its German factory. In China, Tesla faced stiff competition from domestic EV makers, resulting in reduced production of its Model 3 and Model Y at the Shanghai plant.
Analyst Expectations
Analysts had high expectations for Tesla’s performance in the first quarter, with estimates ranging from a high of 511,000 deliveries to a low of 414,000. However, Tesla’s actual deliveries fell below even the lowest analyst estimate, causing concern among investors. The company’s head of investor relations sent out a company-compiled consensus to select investors, which indicated that analysts were expecting a mean of 443,027 deliveries for the quarter.
Following the release of the first-quarter report, Tesla’s shares dropped by about 6.5%. This decline was the biggest since the end of 2022 and the third-steepest quarterly plunge since the company’s IPO in 2010. The market response to Tesla’s performance in the first quarter was not positive, and investors are eagerly awaiting the earnings call scheduled for April 23 to discuss the quarterly results.
Future Challenges
Looking ahead, Tesla faces a number of challenges that could impact its performance in the coming quarters. The competition from domestic EV makers in China, mixed reviews for its newest model, the Cybertruck, and the effectiveness of discounts and incentives in driving sales volume are all areas of concern for the company. Additionally, the ongoing need for human intervention in Tesla’s Full Self-Driving system, despite its marketing as an autonomous feature, could pose regulatory and safety challenges in the future.
Tesla’s first-quarter vehicle production and delivery report has raised questions about the company’s growth potential and ability to navigate challenges in the increasingly competitive EV market. Investors and analysts will be closely watching the company’s performance in the coming quarters to gauge its long-term prospects.
Leave a Reply