Tesla sales tumble 9%, most in 4 years, competition heats up and demand for EVs slows

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Tesla's sales took a significant hit last quarter, dropping nearly 9% compared to the same period last year, marking the first year-over-year quarterly decline in nearly four years. The Austin-based company attributed the decline to several factors, including increased competition in the global electric vehicle (EV) market, a slowdown in EV sales growth, and unsuccessful price cuts aimed at boosting demand.

 

From January to March, Tesla delivered 386,810 vehicles worldwide, falling short of both analyst expectations and the company's own projections. The decline was particularly pronounced in March, suggesting that incentives such as discounts and free trials of "Full Self Driving" software failed to stimulate demand.

 

Challenges faced by Tesla included phasing in an updated version of the Model 3 sedan at its Fremont factory, plant shutdowns due to shipping diversions in the Red Sea, and an arson attack that disrupted operations at its German factory. Despite these setbacks, Tesla managed to surpass China's BYD to retake its global EV sales crown.

 

However, analysts have expressed concerns about Tesla's performance, with some describing the first quarter as a "seminal moment" in the company's growth story. The decline in sales has prompted speculation about Tesla's future trajectory, with CEO Elon Musk facing pressure to navigate the company through these challenges.

 

Investors have responded by driving down Tesla's stock price, which has fallen by 33% this year amid concerns about sluggish growth and shrinking profit margins. Tesla's aggressive price cuts, including discounts of up to $20,000 on certain models last year, have further impacted profitability and contributed to investor skepticism.

 

The decline in Tesla's sales has also had a ripple effect on other U.S. EV competitors, such as Rivian and Lucid, whose stock prices dropped following Tesla's disappointing sales numbers.

 

Looking ahead, analysts are revising their expectations for Tesla's quarterly earnings, with softer-than-expected sales indicating potential challenges in the coming months. The EV market in the U.S. is also experiencing a slowdown, with automakers like Ford having to adjust production and reduce prices to stimulate demand for electric vehicles.

 

As Tesla prepares to release its quarterly earnings later this month, all eyes will be on how the company plans to navigate the increasingly competitive EV landscape and regain momentum in sales growth.

 

04.04.24

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[Tug]

Good more choices more competition lower prices and more innovation and hopefully better products!

[retarius]

Oooh Americans won't like this.....that ugly word "competition". The question no one is asking is why the Chinese can make a deliciously styled quality auto like the Atto or the Seal, at much lower prices than Tesla's? It's cheap Labour innit?

Averaged over all their cars Tesla's made in the US tent factories still pay massive US Labour rates (or I suppose have to use untrained illegals).

The other thing that intrigued me is that Tesla's price reductions are on selected models and the selected example was $20,000 off a self driving model. Who on earth, apart from the stupid buys self driving models, using a testing system being beta tested? 

Disclaimer: I haven't bought an EV or any other sort of battery driven toy. 9% is a big downturn in a single quarter, but there maybe other factors like Houthis to consider. My hunch though, is that the early adopter part of the market is saturated, and the late adopters either haven't yet, or won't be coming on stream.

[JonnyF]

3 hours ago, Tug said:

Good more choices more competition lower prices and more innovation and hopefully better products!

 

Innovation?

 

Like Xiaomi ripping off the Taycan? Hardly innovative. 

 

[thaibeachlovers]

Oh dear, my heart bleeds that Elon will not make so much money now ( no it doesn't- I was being sarcastic ).

[Skipalongcassidy]

8 minutes ago, thaibeachlovers said:

Oh dear, my heart bleeds that Elon will not make so much money now ( no it doesn't- I was being sarcastic ).

Yeah... join the other jealous beeches on this forum... they also hate to see anyone make money.

[stevenl]

56 minutes ago, Skipalongcassidy said:

Yeah... join the other jealous beeches on this forum... they also hate to see anyone make money.

I don't like obscenity like from musk, bezos and some others.

[bamnutsak]

They always scramble in the last month, and weeks of the quarter to move product off the lot and recognize revenue. In that sort of scenario it can be a stressful time to hot the target. They have to offer greater and greater incentives/discount, which only exacerbate the problem. 

 

 

Musk needs a second trump term, in hopes of lowering interest rates (for loans) and tariffs for imported EV/components.

 

Tesla Is Already Back To Cutting Vehicle Prices After Disastrous First Quarter Deliveries

 

To maintain sales momentum in 2023 in 2024, Tesla has aggressively cut vehicle prices and offered discounts. As a result, auto gross margins, which peaked at 30% in Q4 2021 amid industry chip shortages, have plunged well below 20%.

 

https://www.investors.com/news/tesla-stock-vehicle-cuts-after-disastrous-first-quarter-deliveries/