Tesla's Q1 2024 Deliveries Fall Short: A Look at the Numbers and Challenges

Tesla, the electric vehicle powerhouse, has released its first-quarter vehicle production and delivery numbers for 2024, and the figures have sparked a flurry of attention. The company reported a total of 386,810 deliveries and 433,371 vehicles produced in the first quarter. These numbers are particularly significant when compared to the previous year’s first quarter, which saw 422,875 deliveries and 440,808 vehicles produced, and the last quarter of 2023, with 484,507 deliveries and 494,989 vehicles produced.

The bulk of the Q1 deliveries were comprised of the Model 3/Y, with 369,783 units delivered out of the 412,376 produced. The remaining deliveries were from the “other models” category, which includes the Model S, Model X, and possibly some Cybertruck sales, totaling 17,027 deliveries from 20,995 produced.

Analysts had set their expectations high, with a mean of 457,000 deliveries anticipated for the period ending March 31, according to FactSet. The estimates varied, with some analysts predicting as high as 511,000 deliveries and others as low as 414,000. The updated estimates in March adjusted the range to between 414,000 and 469,000 deliveries. Independent researcher Troy Teslike had projected around 409,000 deliveries, while Tesla’s own compiled consensus from 30 analysts expected a mean of 443,027 and a median of 431,125 deliveries.

However, Tesla faced a series of challenges that impacted its Q1 performance. The company’s component supply was disrupted by Houthi militia attacks on shippers in the Red Sea, leading to a temporary suspension of production at its German factory outside of Berlin in January. Further disruptions occurred in March when environmental activists set fire to infrastructure near the Berlin factory, causing another pause in production.

“White electric car Tesla Model 3” by wuestenigel is licensed under CC BY 2.0

In China, Tesla grappled with intense competition from domestic EV makers like BYD and new entrants such as Xiaomi. Following sluggish sales in January and February, Tesla cut back production at its Shanghai plant and reduced workers’ schedules. In the U.S., the reception of Tesla’s new Cybertruck was mixed, and the company’s discounts and incentives seemed less effective in boosting sales volumes than in the past.

Tesla CEO Elon Musk took a hands-on approach during the final days of the quarter, mandating that all sales and service staff install and demo the latest version of the company’s premium driver assistance system, marketed as Full Self-Driving, to customers in North America before car handovers. Despite the name, the system does not render Tesla vehicles autonomous and requires a human driver to be ready to take control.

The company’s shares took a hit, dropping 29% in the first quarter, marking the biggest decline since the end of 2022 and the third-steepest quarterly drop since Tesla’s IPO in 2010. The stock closed down about 5% on Tuesday at $166.63 per share.

Tesla is set to post its financial results for the first quarter of 2024 after market close on Tuesday, April 23, 2024. A live question and answer webcast will follow to discuss the company’s financial and business results and outlook. While deliveries and storage deployments are important metrics, Tesla reminds that they are only two measures of the company’s financial performance and should not be relied on as an indicator of quarterly financial results.

Tesla is navigating these challenges, with the industry and investors eagerly anticipating the detailed financial results to assess the company’s path in the changing electric vehicle market.