Tesla, the world’s most valuable automaker, experienced a drop in deliveries for the first time in almost four years. In the first quarter of this year, Tesla delivered approximately 386,810 vehicles, a decrease of 20.2% from the previous quarter and missing Wall Street’s estimate of 454,200. This decline in deliveries indicates that the impact of Tesla’s price cuts is diminishing as the automaker faces rising competition and softer demand.
Tesla’s shares declined by 5.7% during early trading, adding to the 30% slide in value experienced so far this year. The company produced 433,371 vehicles in the same three-month period. While it is worth noting Tesla’s deliveries fell by 8.5% compared to a year ago, the last time the company experienced a decline in sales was in the second quarter of 2020 when the COVID-19 pandemic resulted in production shutdowns.
In an effort to increase production of the updated Model 3, Tesla partially attributed the drop in volumes to its preparations at the Fremont factory in California. Additionally, shipping diversions caused by the Red Sea conflict resulted in shutdowns at the company’s Berlin plant.
Tesla has been facing fierce competition in China from local players such as BYD and Xiaomi. Despite this, Tesla managed to stay ahead of BYD, its main competitor, with 369,783 Model 3 and Model Y deliveries in the first quarter. It also delivered about 17,000 units of other models, including the Model S sedan, Cybertruck, and Model X premium SUV.
However, Tesla warned of lower sales growth for this year as it focuses on the production of its next-generation electric vehicle.
