Tesla starts 2024 with ‘disastrous’ delivery results

Tesla’s first quarter 2024 results ended up being a wake-up call. Deliveries have declined for the first time since the pandemic compared to the previous year. A small consolation is that the carmaker has recaptured the crown from China’s rival BYD, which is the world’s largest EV maker.

Car deliveries, in particular, were disappointing. Analysts had expected Tesla to deliver some 450,000 Model 3 and Model Y to customers, but there were only 370,000. In total, 387,000 nameplates found a customer.

Deliveries registered 484,507 vehicles (or 25% more) during the final quarter of last year, and in the first quarter of 2023, the company managed 422,875 units (or 9.2% more).

Production also fell below expectations: 412,000 units of the compact models were reported, while 440,000 were expected. Of the Cybertruck, Model S, and Model X, Tesla made only 21,000 cars. Production slid by 8.5%, which Wedbush analysts labeled ‘disastrous.’

External factors

What’s going on? For an explanation, Tesla points mainly to external factors rather than slowing demand, such as attacks on ships in the Red Sea, which forced boats carrying parts and cars to circumnavigate past the Cape of Good Hope.

Then, the arson in the assembly plant in Grünheide Berlin was caused by the activist members of Vulkangruppe opposing the company’s expansion plans. Production was down for several days. The company also says introducing the facelifted Model 3 at the factory in California’s Fremont led to delays.

However, it can hardly be denied that competition is growing fiercely in a stalling market. In Europe, the share of EV adoption has subsided at 12% for months now, as the hesitant private market isn’t following the lead of early adopters or the corporate car market. Over in China, fierce competition is eroding success.

The weak market also surfaces in the difference between ‘deliveries’ and ‘production’ in Tesla’s quarterly figures. These indicate that Tesla is letting many cars roll off the assembly line for inventory, filling parking lots with unsold cars.

Oversupply looming

To make things worse, marketing agency Caliber published a study two days ago on the negative side-effects of Tesla CEO Elon Musk’s image, which is increasingly considered more right-wing. The figures show that 31% of US respondents still consider Tesla for their next electric car, but they are down from 70% in 2021.

The score is said to have dropped another 8% since January, while those for BMW, Audi, and Mercedes have increased. Musk’s image also deteriorated elsewhere in the world, with unfavorable opinions rising from 31% to 43%. Today, he is viewed most unfavorably in France, the Netherlands, Australia, and the United Kingdom.

Back to bookkeeping, as the remaining quarters for this year don’t hold much promise. Analysts see a worldwide oversupply looming. They expect some 13.5 million electric cars to be produced worldwide this year, up from 10.5 million last year. However, global demand for electric vehicles is believed to be only 9.5 million.

There is one consolation for Tesla, though: sales of electric cars at major Chinese competitor BYD are under even more pressure for the same reason. BYD sold just over 300,000 pure electric vehicles during Q1. As a result, Tesla is doing leapfrog and is once again the largest electric carmaker in the world.