Tesla had its worst quarter since pandemic shutdowns

Tesla on Tuesday revealed preliminary production and delivery numbers for the first quarter, and they’re down markedly—falling versus the same period the previous year for the first time since 2020 and the onslaught of the pandemic.

In the first quarter of 2024, Tesla made 433,371 vehicles, while it delivered just 386,810 vehicles. Both figures are down versus the previous quarter as well as the same quarter last year. 

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The drop in deliveries is far more severe than what analysts had expected for the quarter, even until recent days, and it stands as especially noteworthy. It’s down sharply—about 20%—versus the previous quarter and represents an 8.5% drop versus the same quarter a year ago. The only downtick that comes close was that of Q2 2020, when the pandemic forced Tesla to shut down production, to much drama. 

2024 Tesla Model Y. – Courtesy of Tesla, Inc.

Tesla has also, in recent days raised prices on the Model Y, which was the bestselling vehicle on the planet in 2023.

Between the lines, Tesla says that the decline in volumes was partly due to the production ramp of a refreshed Model 3, which has been termed Highland, at the company’s factory in Fremont, California. It’s also due to “factory shutdowns resulting from shipping diversions caused by the Red Sea conflict and an arson attack at Gigafactory Berlin,” according to the company.

Tesla is also just starting to ramp up Cybertruck production and deliveries. According to the company, deliveries of “other models”, including Model S, Model X, Cybertruck, and Semi, totaled just 17,027 in the quarter. It did point out, however, that it was a record quarter for its energy storage products.

Shopper sentiment about Tesla CEO Elon Musk and what the company stands for may also be having a greater impact. One such analysis released this week pointed to Musk as contributing to the ”reputational downfall” of Tesla, and the firm Cox Automotive is anticipating just 3% growth within the U.S. while the rest of the EV market grows by 15%. Tesla’s share of the U.S. EV market shrank in 2023 despite price cuts. 

It should be noted that even with lopsided growth such as that, Tesla will remain far beyond the EV sales of any automaker, for some time ahead.