More Bad News for Tesla

Q1 sales were down 9%, well below expectations, and stock has shaved off 34% of its value this year
By Newser Editors and Wire Services
Posted Apr 2, 2024 10:44 AM CDT
More Bad News for Tesla
A Tesla logo.   (AP Photo/Chris Carlson)

Tesla sales fell sharply last quarter as competition increased worldwide, electric vehicle sales growth slowed, and price cuts failed to draw more buyers. The company said it delivered 386,810 vehicles from January through March, almost 9% below the 423,000 it sold in the same quarter of last year. Sales also fell well short of Wall Street expectations, reports the AP. Analysts polled by FactSet expected Tesla Inc. to deliver 457,000 vehicles. The company blamed the decline in part on phasing in an updated version of the Model 3 at its factory in Fremont, California; plant shutdowns due to shipping diversions in the Red Sea; and an arson attack that knocked out power to its German factory.

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 of the Model 2, a new smaller and less expensive vehicle. Last year Tesla dramatically lowered US prices by up to $20,000 for some models. In March it temporarily knocked $1,000 off the Model Y, its top-selling vehicle. The reductions cut into the company's profit margins, which spooked investors. Shares of Tesla tumbled 6.3% at the opening bell Tuesday; investors have shaved about 34% off the value of the company so far this year.

Wedbush analyst Dan Ives, normally bullish on the stock, wrote last week that first-quarter deliveries would be a "nightmare quarter" for Tesla. Ives gave the stock an "outperform" rating but cut his one-year price target from $315 to $300. Deliveries of the Models 3 and Y, which are by far Tesla's top sellers, fell 10.3% year over year to 369,783. Sales of the company's other models, the aging 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. Ives wrote that investor patience is starting to wear thin. "For Musk, this is a 'fork in the road' time to get Tesla through this turbulent period, otherwise darker days could be ahead," he wrote.

(More Tesla stories.)

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