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Tesla Sales, Deliveries Drop for First Time Since 2020 Elon Musk told investors in January of plans to build a more affordable Tesla electric car down the road.

By Sherin Shibu

Key Takeaways

  • Tuesday trading saw Tesla shares drop about 5%.
  • Tesla reported 386,810 vehicle deliveries in the first quarter, which is 8.5% lower than the same period last year.

On Tuesday, electric vehicle giant Tesla reported 386,810 vehicle deliveries in the first quarter, which is 8.5% lower than the same period last year. It's the company's first year-over-year decline since 2020.

Analysts who spoke with Bloomberg earlier this week expected Tesla to deliver an average of 449,080 electric cars in the first quarter of 2024, down from the record 484,507 deliveries Tesla reported in Q4.

Financial data firm FactSet had set an even higher estimate, at 457,000 deliveries, according to Axios. Tesla produced 433,371 vehicles in the first three months of the year.

In a statement, Tesla noted that the decline in volumes was "partially due to the early phase of the production ramp of the updated Model 3 at our Fremont factory" and factory shutdowns resulting "from shipping diversions caused by the Red Sea conflict and an arson attack at Gigafactory Berlin."

Tesla CEO Elon Musk at the opening of a Tesla electric car manufacturing plant in Germany on March 22, 2022. Photo by Christian Marquardt - Pool/Getty Images

On Monday, Tesla also raised prices in the U.S. for its Model Y electric car, which was the world's bestselling car last year according to data collected by automotive business intelligence company JATO Dynamics. It was the first electric car to hold that distinction. The base Model Y now costs $44,990 without a federal tax credit.

Tesla is on the road to a more affordable electric car, with founder Elon Musk telling investors in January that the company was ramping up to create a next-generation EV to appeal to a broader audience. The car could be built as soon as the second half of 2025, according to Musk.

Related: Leaked Tesla Pay Data: How Much Elon Musk's Factory Workers Now Make Across the U.S. After Some Got Raises

"Once it's going, it will be head and shoulders above any other manufacturing technology that exists anywhere in the world," Musk claimed on the January earnings call.

Slowing Tesla expectations could be the result of more competitors in the electric vehicle space, declining demand for the cars from the public, rising interest rates — or even founder Elon Musk's reputation, per exclusive industry reports obtained by Reuters on Monday.

Tesla shares were down about 5% Tuesday afternoon.

One exclusive report from market intelligence company Caliber showed that Tesla's consideration score among U.S. buyers dropped from 70% in November 2021 to less than half of that (31%) in February. About 83% of Americans connect Musk with Tesla, according to Caliber surveys.

Related: 'Next Tesla' Electric Car Startups Hit Speed Bump: 'Investors Want To See Demand'

Another survey that analytics firm CivicScience shared exclusively with Reuters indicated an increase in the percentage of buyers who could be steering away from Tesla. The survey found that 42% of respondents viewed Musk unfavorably, up from 34% two years ago.

Despite the reports, Musk is currently the most-followed person on X with 179 million followers. He became the sixth person to cross the 100 million follower mark in June 2022.

An earnings call is scheduled for April 23 to discuss Tesla's quarterly results, per CNBC.

Sherin Shibu

Entrepreneur Staff

News Reporter

Sherin Shibu is a business news reporter at Entrepreneur.com. She previously worked for PCMag, Business Insider, The Messenger, and ZDNET as a reporter and copyeditor. Her areas of coverage encompass tech, business, strategy, finance, and even space. She is a Columbia University graduate.

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