8.5% Decrease in Vehicle Deliveries in Q1
NYT "Loss of Market Dominance... Questions on Musk's Leadership"
U.S. electric vehicle maker Tesla's vehicle deliveries in the first quarter of this year sharply declined by nearly 9% compared to a year ago. This marks the first contraction in four years. Tesla, once a symbol of innovation in electric vehicles, is now being evaluated as losing its market dominance.
On the 2nd (local time), Tesla announced that it delivered 386,810 vehicles from January to March this year. This is an 8.5% decrease compared to the deliveries in the same period last year (422,875 vehicles). It also fell significantly short of the expert forecast of 457,000 vehicles compiled by market research firm FactSet.
This is the first time in four years since the COVID-19 pandemic that Tesla's vehicle deliveries have decreased.
Tesla's vehicle production in the first quarter of this year was 433,371 units, down 1.7% from 440,808 units a year earlier.
Tesla explained, "The decrease in sales was partially affected by the suspension of initial production at the Fremont plant in California due to updates to the Model 3 vehicle."
Supply chain disruptions caused by the Houthi rebels' Red Sea ship attacks and the shutdown of the German factory due to a fire also impacted the decline in vehicle deliveries.
The market also views the overall sluggishness of the global electric vehicle market as a factor leading to Tesla's decline in vehicle deliveries. Tesla reduced production of the Model 3 and Model Y at its Shanghai plant in China during January and February this year and shortened workers' working hours from 6.5 days per week to 5 days. Analysts also believe Tesla's electric vehicle discount policies did not help increase sales.
Additionally, Tesla CEO Elon Musk has been under scrutiny for various inappropriate remarks and behaviors, damaging the brand's value.
On the other hand, Chinese electric vehicle competitors are increasing their vehicle sales, contrasting with Tesla's contraction. Chinese BYD announced that its electric vehicle sales in the first quarter reached 300,000 units, a 13% increase compared to the same period last year. Plug-in hybrid vehicle sales reached 324,000 units, up 15% from a year earlier.
Wall Street is also expressing a skeptical outlook on Tesla's growth.
Recently, Colin Langan, an analyst at Wells Fargo, said that the growth of the electric vehicle market has slowed, predicting that Tesla's sales this year will maintain last year's level and decline next year. Dan Ives, an analyst at U.S. securities firm Wedbush, recently warned that Tesla's first-quarter performance would slow and lowered the target stock price from $315 to $300.
As a result, Tesla's stock price has also struggled. Tesla's stock price plunged 29% in the first quarter of this year alone and fell 4.9% on the day following the news of the decline in first-quarter vehicle deliveries.
The New York Times (NYT) reported, "Tesla is effectively losing its created market dominance, and new questions are being raised about CEO Musk's leadership," adding, "The market is evolving in a direction that does not favor Tesla."
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