(Bloomberg) -- Tesla Inc. suffered its first year-over-year sales drop since the early days of the Covid pandemic.
Tesla handed over 386,810 vehicles in the first three months of 2024, the company said in a statement Tuesday. That fell well short of analysts' average estimate for 449,080 deliveries. The stock fell 7% in early New York trading.
Wall Street had rapidly lowered projections for the Austin-based company's deliveries as the first quarter came to a close, including some analysts who correctly predicted that the tally would come in below the 422,875 delivered a year ago. The company faced shutdowns of its plant outside Berlin and switched over its California factory to make an upgraded version of the Model 3, a process that tends to slow output.
The bigger worry was consumer demand. High interest rates have kept some buyers on the sidelines and Tesla has warned investors that it is “between two growth waves.” In February, Chief Executive Officer Elon Musk posted that “most people don't love to buy cars in the middle of winter” as he offered a $1,000 incentive. Tesla has also begun experimenting with advertising and has gone to greater lengths to educate consumers about its lineup.
Tesla doesn't break out quarterly vehicle sales by region, but the US and China have long been its largest markets. The company makes the Model S, X, 3 and Y in Fremont, California, and the Model 3 and Y in Shanghai. It also produces the Model Y at its plants in Austin and outside Berlin. The Model Y sport utility vehicle and Model 3 sedan accounted for 96% of deliveries in the fourth quarter.
Tesla expanded its offerings late last year with the introduction of the stainless steel-clad Cybertruck in the US. The company didn't break out how many Cybertrucks it produced and delivered.
Despite the challenges, Tesla still managed to reclaim its title as the world's largest EV seller after being surpassed by China's BYD Co. at the end of last year. In the first quarter, BYD sold 300,114 battery-electric vehicles globally, the automaker said Monday. Including hybrids and other new-energy automobiles, the Chinese company sold 626,263 units during the period.
(Updates with additional details beginning in third paragraph.)
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