Deliveries of Elon Musk’s Tesla fell sharply in the first three months of the year as the electric vehicle company faced a fire at its European factory, global shipping disruptions and other challenges.

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

This was down more than 8% from the previous year and much less than analysts expected.

Shares fell more than 4% on the news.

Wedbush Securities analyst Dan Ives described the update as an “absolute disaster… that is difficult to explain.”

Tesla shares have already fallen over the past year, reflecting challenges as higher interest rates make its cars less affordable and rivals increase their own electric vehicle offerings.

The company repeatedly reduced prices in response. But demand in key markets like China has weakened nonetheless as competitors like BYD make gains.

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

Ives said the numbers suggest the first quarter was a “brick wall train wreck” for the company, increasing pressure on Musk.

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

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

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

This marked the first annual decline in any quarter since 2020. Deliveries were down 20% compared to the final quarter of 2023.

The drop comes at a time when car companies across the sector have been reducing their ambitions for electric cars, warning of weaker demand than expected. However, most analysts still expect electric vehicle sales to grow significantly this year.

Tesla has also faced company-specific problems.

Its driverless car software, which it claims will spark a new wave of growth, has also been under scrutiny, while safety authorities have been investigating the company’s assisted driving and other areas.

At the same time, some of the company’s investors have expressed concerns that its product line has become tired, while Musk’s focus has been elsewhere, including his social media company X, formerly Twitter, where his decisions and posts have provoked controversy. , damaging the Tesla brand.

With information from the BBC


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