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Tesla’s stock (TSLA) took a significant hit following the electric vehicle (EV) manufacturer’s report of a substantial delivery shortfall for the first quarter. This disappointing Q1 delivery report follows Tesla’s cautionary note in January, where it forecasted a notably lower vehicle volume growth rate compared to the previous year.
In Q1, Tesla disclosed global deliveries totaling 386,810 vehicles, falling short of expectations which were pegged at 449,080, as compiled by Bloomberg. Additionally, Tesla’s production figure for the quarter stood at 433,371 vehicles, below the estimated 452,976.
Notably, Tesla’s Q1 delivery performance marks a notable decline from the preceding quarter, where it delivered 484,000 vehicles. More concerning for investors is the year-over-year drop in deliveries compared to Q1 of the previous year, during which Tesla delivered 423,000 vehicles. This marks Tesla’s first annual Q1 delivery decline since 2020.
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Tesla’s stock experienced a sharp decline of 4.9% on Tuesday in response to the news. “While we were anticipating a challenging 1Q, this quarter’s performance was an unmitigated disaster that is hard to explain away,” noted Wedbush analyst Dan Ives in a statement following the report’s release. “We view this as a pivotal moment for Musk to either reverse this trend and salvage the 1Q performance or face potential challenges that could disrupt Tesla’s long-term narrative.”
Breaking down the delivery figures by model lines, Tesla reported producing 412,376 Model 3 and Model Y vehicles and delivering 369,783. Meanwhile, production of Tesla’s stock “other models,” which now include the Cybertruck, alongside the more upscale Model S and Model X vehicles, amounted to 20,995, with deliveries reaching 17,027. The notable difference between deliveries and production, estimated at around 46,000 vehicles, suggests a potential inventory surplus, signaling a deeper issue beyond known production bottlenecks in Fremont and Berlin, according to Deutsche Bank’s Emmanuel Rosner.
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Tuesday’s delivery report follows Tesla’s decision to increase prices of its popular Model Y SUV across all trim levels on Monday, with a $1,000 hike. Similarly, in China, the Model Y Long Range version saw a 5,000 yuan ($675) increase, bringing its total cost to 304,900 yuan, while the Performance version also experienced a 5,000 yuan uptick, totaling 368,900 yuan.
“Although the company recently implemented price increases in the US and China as previously indicated, we believe it may need to reverse course, posing further downside risks to the average selling price (ASP) for the remainder of the year,” added Deutsche Bank’s Rosner.
Tesla also announced that it would release its first-quarter financial results after the market close on Tuesday, April 23.
