- Tesla stock fell as much as 7% on Tuesday after reporting first-quarter deliveries that fell far short of expectations.
- Tesla said it delivered 386,810 vehicles in the first quarter, well below the consensus Wall Street forecast of nearly 450,000.
- Wedbush analyst Dan Ives said factory shutdowns in Germany and soft demand in China contributed to the miss.
Tesla stock dropped as much as 7% on Tuesday after the company reported weaker than expected vehicle deliveries for the first quarter.
Tesla delivered 386,810 vehicles in the first quarter, which was well below Wall Street estimates of 449,080, according to data from Bloomberg. The decline represented Tesla’s first year-over-year sales drop since the start of the COVID-19 pandemic in 2020.
The first quarter results represent a year-over-year decline of 9% and a 20% decline from its recent fourth quarter vehicle sales of 484,507.
Expectations for Tesla’s vehicle deliveries were already declining heading into the report, as concerns have grown surrounding weak demand in China, factory shutdowns in Germany, and soaring demand for one of Tesla’s biggest competitors: plug-in hybrids.
“Let’s call this as it is: While we were anticipating a bad 1Q, this was an unmitigated disaster 1Q that is hard to explain away,” Wedbush analyst Dan Ives said in a Tuesday 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.”
Tesla’s stock decline on Tuesday extends an already painful start to 2024 and a continued decline from its peak in 2021. The stock is down 33% year-to-date, and is down 60% from its record high of just over $400 per share.
Ives said that on top of the vehicle delivery miss, investor patience may be starting to wear thin for Tesla and Elon Musk.
“While Tesla right now is caught between “two waves of growth” patience is starting to wear very thin among investors. This is being exacerbated by the Musk AI outside of Tesla chatter, Board issues, Delaware Musk comp void, and now a likely move to incorporate in Texas,” Ives said.
Ives said Wall Street criticism on Tesla “is warranted” as its profit margins have yet to rebound significantly due to “a horror show” in China and increased competition.
“For Musk, this is a fork in the road time to get Tesla through this turbulent period otherwise troubling days could be ahead,” Ives said.