Tesla recently released its first-quarter vehicle production and deliveries report for 2024, revealing a decline in deliveries of 8.5% from the previous year and a 20% drop from the fourth quarter. The total number of deliveries for Q1 2024 was 386,810, while production stood at 433,371 vehicles. This represents a 1.7% decline in vehicle production year over year and a 12.5% decrease sequentially.
Tesla attributed the decline in volumes to several factors, including the early phase of the production ramp of the updated Model 3 at its Fremont factory. Additionally, the company experienced factory shutdowns due to shipping diversions caused by the Red Sea conflict and an arson attack at Gigafactory Berlin. Houthi militia attacks on shippers in the Red Sea disrupted Tesla’s component supply and temporarily halted production at its German factory. In March, environmental activists set fire to infrastructure near the same factory, further disrupting production.
In China, Tesla faced increased competition from domestic EV makers like BYD and newcomers such as Xiaomi, leading to sluggish sales numbers for its China-made cars in January and February. As a result, Tesla reduced production of its Model 3 and Model Y at its Shanghai plant and adjusted workers’ schedules. The company also struggled with mixed reviews for its newest model, the Cybertruck, which only began selling in small numbers in December.
Analysts had varying estimates for Tesla’s deliveries in the first quarter of 2024. The mean estimate from 11 analysts compiled by FactSet was around 457,000 deliveries, with a range from 414,000 to 511,000. Independent researcher Troy Teslike expected deliveries to come in around 409,000. Tesla’s own consensus based on estimates from 30 analysts projected a mean of 443,027 deliveries for the quarter.
Following the report, Tesla’s shares dropped by approximately 6.5%, marking a 29% decline in the first quarter – the largest decrease since the end of 2022 and the third-steepest quarterly plunge since the company’s IPO in 2010. The market response indicates a lack of confidence in Tesla’s ability to navigate the challenges it faces.
Despite the challenges in the first quarter, Tesla remains committed to its mission of accelerating the world’s transition to sustainable energy. The company is scheduled to host an earnings call on April 23 to discuss its quarterly results and provide insights into its future strategies for growth and expansion.
Tesla’s declining deliveries in the first quarter of 2024 highlight the hurdles it faces in a rapidly evolving market. As competition intensifies and external factors create disruptions in production, Tesla must adapt and innovate to regain its momentum and continue its path towards sustainable success.
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