Tesla Delivery Falls For the First Time Since the Pandemic—Here’s Why

In the first three months of 2024, Tesla produced 433,371 vehicles and delivered only 386,810.

Tesla parking lot
An aerial view of Tesla cars sit parked in a lot at the Tesla factory in Fremont, Calif. Justin Sullivan/Getty Images

Tesla (TSLA)’s quarterly sales fell for the first time in almost four years, ducking Wall Street expectations as the Elon Musk-led electric vehicle maker grapples with production issues and slowing demand. Tesla delivered 386,810 vehicles in the first three months of 2024, the company said today (April 2). That’s down more than 20 percent from the 484,507 units delivered in the prior quarter (and down 8.5 percent year-over-year) and missed analyst expectations by 14 percent. Vehicle production, meanwhile, fell nearly 1.7 percent from the same period last year to 433,371 in the first quarter.

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Tesla shares fell more than 5 percent today following the release, wiping out more than $30 billion in the company’s market value. Musk hasn’t publicly commented on Tesla’s delivery number yet.

Tesla attributed the sharp decline partially to “the early phase of the production ramp of the updated Model 3” at its Fremont, Calif. factory and factory shutdowns in Germany resulting from “shipping diversions caused by the Red Sea conflict” and an arson attack at Gigafactory Berlin in early March.

Europe-bound shipments containing EV batteries and other components for carmakers including Tesla were disrupted in January when Houthi militia, which control much of Yemen’s north and west, attacked commercial vessels in the Red Sea amid escalating tensions with the U.S. The conflict temporarily paused production at the Tesla factory outside Berlin, which was later set aflame by environmental activists in March triggering yet another production freeze.

Tesla’s first year-over-year delivery decline since late 2020 also came as consumer hypes surrounding EVs hit a lull. Automakers including Ford, General Motors and Mercedes-Benz have all reeled back their EV operations as the wave of early adopters fades and consumers hesitate to embrace EVs without a sweeping and reliable charging infrastructure across the U.S.

A July 2023 study by the U.S. Office of Energy Efficiency and Renewable Energy estimated that there were approximately 161,562 EV charging ports and just 6,409 DC fast-charging (DCFC) ports across the U.S. In order to reach projections that 10 percent of U.S. vehicles will be all-electric by 2030, the Edison Electric Institute estimates that there would need to be 12.9 million charge ports and approximately 140,000 DCFC ports.

As the EV shift lags on, the industry has also become increasingly congested. Tesla in particular has faced intense competition in China, its largest overseas market, scaling back production of its Model 3 and Model Y vehicles at its Shanghai factory as domestic rivals including BYD and new entrants such as phone manufacturer Xiaomi encroach on its territory.

Tesla Delivery Falls For the First Time Since the Pandemic—Here’s Why