It’s Tesla’s first year-over-year sales decline since the start of the pandemic.
The writing’s been on the wall over the past month that Tesla’s first-quarter 2024 earnings were likely to underwhelm. CEO Elon Musk indicated that himself, touching off a frenzy that sent every analyst CNBC‘s ever called to predict precisely how dramatically Tesla’s sales would probably fall. This morning, we have the number, and it’s not pretty. The market predicted about 430,000 vehicles; Tesla shifted 386,810.
That’s quite the gap between expectation and reality—we’re talking roughly 43,000 vehicles—and to put it into perspective, Tesla moved 422,875 units this time last year. But what’s more telling is the distance between the cars Tesla built and those it actually sold over the period.
In Q1 2023, Tesla produced 440,808 cars, meaning the company shifted 18,000 fewer vehicles than it built at the time. In this latest quarter, it made 433,871. So not only was Wall Street looking for much better sales—even that 430,000 prediction was severely cut back from earlier hopes of 470,000 units—but Tesla ended March sitting on about 47,000 cars it manufactured but couldn’t deliver.
Maddox Kay
For Tesla’s part, it did have a difficult three months beset by a range of setbacks. “Decline in volumes was partially due to the early phase of the production ramp of the updated Model 3 at our Fremont factory and factory shutdowns resulting from shipping diversions caused by the Red Sea conflict and an arson attack at Gigafactory Berlin,” the company said in a statement. Headwinds in the Chinese market, as well as the Cybertruck’s long, rocky road to series production, haven’t helped the cause either.
That’s despite the fact Tesla’s kept the discounts rolling along, offering $1,000 off the Model Y over the month of February, and retaining the full federal EV tax credit for the Model 3, Y, and X even as rivals lost theirs due to annual tightening of the criteria. It’s even giving Full Self-Driving to all owners until the end of the month, hoping they’ll be so impressed that they’ll take the $12,000 plunge to unlock the software once the trial’s finished.
All in all, the early part of 2024 has given Tesla its first year-over-year drop in sales since 2020, and has sent shares tumbling by about 5.8% as of 10:30 a.m. ET on Tuesday. Everyone’s been talking endlessly about the EV demand problem. This is it. And though it came for “legacy” automakers first that have been far less successful in their EV pursuits, it comes for every player eventually—even Tesla.
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