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Tesla Hits a First Quarter Roadblock Like No Other

Elon Musk’s Tesla wrangled the crown of the world’s top EV seller away from China’s BYD this quarter, but it’s not taking any victory laps.

Photo of a Tesla steering wheel and interface
Photo by David von Diemar via Unsplash

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Being No. 1 isn’t all it’s cracked out to be. 

Elon Musk’s Tesla wrangled the crown of the world’s top EV seller away from China’s BYD this quarter, but it’s not taking any victory laps. Its 2024 has been battered by slumping sales, a falling share price, and even acts of sabotage, with one team of analysts describing the quarter as a “train wreck into a brick wall quarter for Musk & Co.”

Coming Up Short

In the last quarter of 2023, Tesla sold about 485,000 vehicles, a record for the Austin, Texas-based company. But on Tuesday, Tesla reported that it sold just 387,000 cars in the first quarter, about 15% below expectations and an 8.5% drop year-over-year. The drop raised immediate red flags.

“While we were anticipating a bad 1Q, this was an unmitigated disaster 1Q that is hard to explain away,” Wedbush Securities analysts wrote in a note. “We view this as a seminal moment in the Tesla story for Musk to either turn this around and reverse the black eye 1Q performance. Otherwise, some darker days could clearly be ahead that could disrupt the long-term Tesla narrative.”

Much of Tesla’s pain is a result of its production misses — manufacturing roughly 433,000 cars, below Wall Street’s estimate of 453,000:

  • Delays due to fighting on the Red Sea led Tesla to shut down production at its German factory, which can produce about 1,000 cars a day, for two weeks. Planned downtime last year at factories in China and Texas for equipment upgrades have also eaten into production totals.
  • And the German factory hits kept coming. In early March, far-left arsonists calling themselves “Volcano Group” took responsibility for setting fire to an electrical tower outside Berlin. It shut down the nearby factory for a week, and the plant’s director said at the time it could result in losses in the “high hundreds of millions” of euros.

Tesla’s share price has plunged roughly 33% year-to-date, and is down more than 50% from two years ago.

Face That Runs the Place: Musk’s polarizing persona might also be scaring off would-be buyers. A recent survey conducted by market research firm Caliber and provided to Reuters found that consumers’ “consideration score” for Tesla fell to 31% in February, compared to a high of 70% in November 2021. Experts told the outlet part of that is due to customers’ iffy feelings toward the outspoken Musk. If Musk wants to win back the people, we recommend never hosting “Saturday Night Live” again.