Tesla’s Q1 delivery numbers will be a major disappointment for investors. Even more concerning for investors is that it’s difficult to see how sales rebound in the coming quarters.
The EV maker delivered 336,681 vehicles in Q1 and produced 362,615. Analysts polled by Visible Alpha had delivery expectations of 372,410.
Tesla attributed falling deliveries to disruption at their manufacturing hubs. In reality, several factors are weighing on deliveries.
Musk is facing political backlash for his interference in European politics and his role in the White House. Tesla’s market share in Germany has fallen to around 4% from 16% after Elon Musk showed support for far-right parties in the country.
Tesla is also facing increased competition from Chinese EV makers such as BYD, which offer high-quality EVs at lower prices.
Analysts at Counterpoint Research predict that BYD will replace Tesla as the world’s top EV manufacturer after Tesla’s poor first quarter.
“There’s no way to sugarcoat it, Tesla’s first-quarter delivery numbers are a disappointment, though many investors were already preparing for a soft number,” said Matt Britzman, senior equity analyst, Hargreaves Lansdown.
“A drop from last year is no surprise, but the scale is worse than many had expected. On a positive note, high-margin energy deployment was very strong, and that should help to balance out the earnings impact of the delivery disappointment.”
“Headlines will point to branding issues, and it’d be naive to assume that’s not a factor here, but it misses the key point. Deliveries have been significantly impacted by downtime at factories as Tesla launched the long-awaited refreshed version of the Model Y, its best-selling car. If reviews are anything to go by, the new Model Y should be a major hit, and with it coming in as China’s best-selling car in March, demand in this key market is clearly strong.”
Investors will hope Tesla’s growing focus on autonomous vehicles will justify its lofty valuation.