Tesla reported a sharp decline in sales last quarter, attributing the decrease to increased competition in the global electric vehicle market, slower EV sales growth, and unsuccessful price cuts. The company delivered 386,810 vehicles worldwide from January to March, marking a nearly 9% drop compared to the same period last year when it sold 423,000 vehicles.
The sales figures fell short of Wall Street expectations, with analysts anticipating 457,000 vehicle deliveries from Tesla. The company cited various reasons for the decline, including the introduction of an updated Model 3 sedan, plant shutdowns due to shipping diversions, and an arson attack that disrupted operations at its German factory.
In a letter to investors, Tesla forecasted lower sales growth for the year, noting that it is transitioning between two major growth phases involving the Models 3, Y, and an upcoming Model 2. The company significantly reduced prices on some models last year, with analysts projecting a decrease in the average selling price for the Model Y.
Following the disappointing sales report, Tesla's stock price dropped by 5.5% in morning trading, continuing a downward trend that has seen a 34% decrease in the company's value this year. Analysts expressed concerns about the company's performance, with one noting that the quarter was a 'seminal moment' for Tesla's growth story.
During the quarter, Tesla faced challenges such as production disruptions in Germany and declining sales in China. Deliveries of Models 3 and Y decreased year over year, while sales of other models, including the X, S, and Cybertruck, saw an increase. Analysts are revising their earnings estimates for Tesla's upcoming financial report in light of the weaker-than-expected sales figures.
The slowdown in Tesla's sales comes amid a broader deceleration in the U.S. electric vehicle market, which saw a record 47% growth in EV sales last year. However, sales growth tapered off towards the end of the year, with December figures showing a 34% increase. Updated EV sales data from automakers are expected to be released later, providing further insights into the industry's performance.
