April 23, 2024


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Tesla sales are down much more than expected

Tesla sales are down much more than expected

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A Tesla Model

New York

Tesla posted its first annual sales decline since the first year of the pandemic, as growing electric vehicle competition from Chinese and Western automakers erodes demand.

The electric car company owned by CEO Elon Musk reported that it had manufactured 433,000 vehicles but delivered only 387,000. That's down from the 484,507 cars delivered in the last three months of 2023, and also down from car sales of 422,875 in the first quarter of last year.

Tesla has responded to increased competition by cutting prices. Although Tesla is more profitable than traditional automakers, price cuts have put pressure on profit margins that have helped boost the stock. Investors' expectations that the company would grow sales in the future were also supporting Tesla's high stock price, making it the world's most valuable automaker.

shares Tesla It fell 5% on Monday and has lost more than a third of its value this year.

Tesla attributed the decrease in volumes in part to increased production of the updated version of the Model 3 at its factory in Fremont and to factory closures resulting from the diversion of ships from China to Europe away from the Red Sea due to… Attacks there. As reported by A Close for a week From its German factory because Arson.

But increasing competition in electric vehicles is a big factor in declining demand. In the fourth quarter, Tesla lost the title The world's best-selling electric vehicle manufacturer For the Chinese automaker BYD.

However, even with the sharp decline in Tesla's sales, it regained the global title from BYD, which suffered an even greater decline in sales of pure battery vehicles than at the end of last year. BYD reported that it sold only 300,114 electric cars, not including hybrid cars, in the first quarter, down from the 525,409 cars it sold in the last quarter of 2024.

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But unlike Tesla, BYD's electric vehicle sales were up 13% compared to the same period a year earlier, when it sold 264,647 battery-only vehicles.

Tesla faces new competition from older automakers in Western countries as well, most of which are introducing new models of electric cars as they move forward with plans to switch from traditional vehicles with internal combustion engines to electric cars.

Toyota has not announced its global sales for the first quarter yet, but it reported that its pure electric vehicle sales for the first two months of the year were up 61%, albeit still modest at 14,504 vehicles.

General Motors said Tuesday that its U.S. electric vehicle sales fell 22% this quarter from a year earlier due to its decision to discontinue them. Discontinue the current version of America's best-selling electric vehicleChevrolet Bolt. But other newer electric vehicle models — the Cadillac Lyric, GMC Hummer SUV and pickup, as well as EV versions of the Chevrolet Blazer and Silverado — They combined for an 841% jump in sales, a bright spot in an overall disappointing quarter for GM.

Analysts were expecting sales of as many as 440,000 to as many as 414,000 vehicles, said Wedbush Securities analyst Dan Ives, who was bullish on Tesla shares. While he said he remains bullish in the long term, he described the quarter as a “train wreck in a brick wall quarter.”

The biggest problem is likely Tesla's sales in China, which he estimates are down 3% compared to the previous year, Ives said. He described the Chinese request as “exiting very quietly from the gates of 2024.”

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“While we were expecting a bad first quarter, this was an unmitigated disaster that is difficult to explain,” he said in a note to clients. “We view this as a seminal moment in the Tesla story for Musk to either turn this around and reverse the first quarter performance. Otherwise, it's clear that some dark days could be coming which could disrupt Tesla's narrative in the long term.

While overall demand for electric vehicles is still growing rapidly — U.S. electric vehicle sales rose 40% last year and surpassed 1 million vehicles for the first time — The pace of growth was lower From some expectations. This has prompted some traditional automakers, such as General Motors and Ford, to back away from their electric vehicle production plans.

This story has been updated with additional reporting and context.