Tesla’s first-quarter vehicle production and delivery report for 2024 showed a decrease of 8.5% in deliveries compared to the year-ago quarter. The total deliveries for the first quarter of 2024 were 386,810, with a total production of 433,371 vehicles. Shares dropped 7% in premarket trading following the release of these numbers. The company did not break out sales by model but reported that it produced 412,376 Model 3/Y cars and delivered 369,783, as well as producing 20,995 of its other models and delivering 17,027.
In the same period last year, Tesla had reported 422,875 deliveries and a production of 440,808 vehicles. In the fourth quarter of 2023, Tesla had reported 484,507 deliveries and production of 494,989 vehicles. Deliveries are the closest approximation of sales reported by Tesla, though they are not precisely defined in the company’s shareholder communications. Despite falling below analyst estimates, Tesla’s deliveries were lower than even the lowest expectations.
Tesla faced numerous challenges in the first quarter of 2024. These challenges included Houthi militia attacks on shippers in the Red Sea disrupting Tesla’s component supply and temporarily suspending production at its German factory in January. In March, environmental activists set fire to infrastructure near the same factory, resulting in a pause in production due to inadequate operation power. In China, Tesla faced increasing competition from domestic EV makers, leading to reduced production of its Model 3 and Model Y at its Shanghai plant.
The launch of Tesla’s newest model, the Cybertruck, received mixed reviews in the U.S., where the company faced challenges driving sales volume. A series of discounts and incentives seemed to be less effective in boosting sales compared to previous quarters. Tesla CEO Elon Musk mandated that all sales and service staff install and demonstrate the company’s premium driver assistance system for customers in North America before handing over their cars. This system, marketed as Full Self-Driving, requires a human at the wheel at all times.
Shares of Tesla experienced a significant decline of 29% in the first quarter of 2024, the largest decrease since the end of 2022 and the third-steepest quarterly plunge since the company’s IPO in 2010. The company’s struggles in the first quarter were attributed to various factors, including disruptions in the supply chain, increased competition in key markets, and challenges in driving sales volume. Moving forward, Tesla will need to address these issues to regain market confidence and improve its financial performance.
