Electric vehicle (EV) manufacturer Tesla recently reported its first year-over-year decline quarterly delivers in four years, according to The Wall Street Journal. The company delivered 386,810 vehicles worldwide during the first quarter of 2024 — an 8.5 percent drop from the prior year. The dip led to Tesla missing Wall Street’s expectations badly and raised concerns about the manufacturer’s overall growth prospects this year.
Tesla’s first quarter delivery total was its worst three-month performance since the third quarter of 2022, but it still managed to outsell China’s BYD over this timespan. Despite the victory, Tesla’s performance is still concerning for the company and the EV market as a whole—growth has slowed down and manufacturers are rethinking their strategies as customers’ EV enthusiasm has yet to meet expectations.
These EV delivery totals have also put customer demand into question, as well as if Tesla will reach even modest growth in 2024, Deutsche Bank analyst Emmanuel Rosner wrote in a note to investors, The Wall Street Journal reports. Meanwhile, analysts had lowered their expectations for Tesla’s first-quarter performance over the past several weeks.
Tesla pointed to production setbacks as one of the reasons for its underwhelming first quarter result. The EV manufacturers noted it stopped output at its Germany plant for two weeks in January due to parts shortages resulting on ship attacks in the Red Sea. Meanwhile, the company’s assembly line had to stop in March because of an arson attack on the grid that provides power to the factory.
Tesla’s Model 3 production also fell in the U.S. — from 440,808 during the first quarter of 2023 to 433,371 in the first three months of this year, The Wall Street Journal reports. Rosner noted the gap between Tesla’s production and deliveries suggests, “that beyond the known production bottleneck, there may also be a serious demand issue.”
How other EV manufacturers fared during 1Q24
Asian automakers reported solid U.S. sales during the first quarter of this year, The Wall Street Journal reports. This includes Toyota Motor, which saw a 20 percent increase. The Japanese manufacturer noted that its gas-electric hybrid vehicle sales help boost its results.
Other electric vehicle manufacturers saw mixed results. For example, Hyundai’s EV sales doubled during the first quarter, thanks to its Ioniq 6 sedan. Meanwhile, General Motors saw its EV sales fall almost 20 percent and overall U.S. delivers decreased 1.5 percent. Rivian exceeded Wall Street’s expectations with a 70 percent bump — approximately 13,600 vehicles.
As for Tesla, Wall Street does not have high hopes for Tesla increasing its deliveries this year due to the company’s older EV lineup and rising interest rates. Since February, the average annual percentage rate on a new-car loan increased to 7.1%, from 4.4% two year ago, per Edmunds.
The current slowdown is a big shift for Tesla, as the company had grown accustomed to aiming for 50 percent annual growth. The company’s lack of new products and increased competition hasn’t helped its cause either.
The company is expected to report its first quarter financial results on April 23. FactSet survey respondents expect Tesla to report a $1.8 billion quarterly profit—a 27 percent decline from the same time period last year. If analysts are correct, it would be Tesla’s lowest quarterly profit in more than two years.
“(Tesla) may be witnessing price-cut fatigue,” Morgan Stanley analyst Adam Jonas wrote. “Such conditions may not significantly improve near-term given the age of Tesla’s product line-up.”
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