Tesla ‘disaster’ with fewest deliveries since 2022

Deliveries from Elon Musk’s Tesla have slid sharply in the first three months of the year, as the EV company grappled with a fire at its European factory, global shipping disruption and other challenges.

The company handed over just under 387,000 electric cars to customers – the smallest quarterly figure in more than a year.

That was down more than 8% year-on-year and far fewer than analysts expected.

Shares fell more than 4% on the news.

Wedbush Securities analyst Dan Ives described the update as an “unmitigated disaster … that is hard to explain away”.

Tesla shares had already dropped over the last year, reflecting challenges as higher interest rates make its cars less affordable and rivals ramp up their own electric vehicle offerings.

The firm has cut prices repeatedly in response. But demand in key markets such as China has weakened nonetheless, as competitors such as BYD make gains.

Tesla’s problems worsened in the first three months of this year. Houthi attacks in the Red Sea caused supply disruptions which temporarily shut its factory in Germany which was later hit by an alleged arson attack.

Mr Ives said the figures suggested the first quarter had been a “train wreck into a brick wall” for the company, raising the pressure on Mr Musk.

“This is a fork in the road time to get Tesla through this turbulent period otherwise troubling days could be ahead,” he said.

The company said production in the first quarter fell about 1.6% year-on-year, from 439,701 cars in 2023 to 433,371 during the same period this year.

But deliveries were more significantly affected, dropping more than 8% year-on-year.

That marked the first annual fall for any quarter since 2020. Deliveries were down 20% compared with the final quarter of 2023.

The drop comes as car companies across the industry have been scaling back their electric car ambitions, warning of weaker-than-expected demand. However, most forecasters still expect electric vehicle sales to grow significantly this year.

Tesla has also faced company-specific problems.

Its driverless car software, which it has claimed will unleash a new wave of growth, has also been under scrutiny, while safety officials have been probing the firm’s power steering and other areas.

At the same time, some investors in the firm have voiced concerns that its line-up of products has grown tired, whileMr Musk’s focus has been elsewhere, including at his social media company X, formerly Twitter, where his decisions and posts have sparked controversy, denting the Tesla brand. – bbc.com