Tesla reported a less-than-stellar performance in its recent first quarter deliveries, attributing some of the challenges to an unfortunate arson incident at its factory in Germany and shipping disruptions resulting from Houthi attacks in the Red Sea.
In the first quarter of 2024, Tesla reported a delivery of 386,810 vehicles, which represents a 20% decrease compared to the previous quarter’s delivery of 484,507 vehicles. It is worth noting that Tesla’s car shipments in the first quarter of 2023 were lower than the previous year, marking the first decline in sales in three years.
Production was lower compared to the previous year, which Tesla attributed to the transition to manufacturing the new Model 3, along with other disruptions. An arson attack caused the temporary shutdown of the Germany factory, leading to a halt in Tesla’s production for two weeks in January as a result of issues in the Red Sea. In early trading, the company’s stock experienced a significant decline of over 6%.
These drops occur just two months after Tesla issued a warning about a potential sales growth decline in 2024, following a successful 2023 driven by price reductions. In January, the company expressed its optimism about being in a prime position for significant growth as it focuses on scaling up production of the Cybertruck. Additionally, there is a more affordable electric vehicle in development, although the company’s plans for it have already changed. The company is actively working on developing a completely new manufacturing process in order to reduce costs.
The company is experiencing a surge in competition in China, as numerous companies of all sizes are saturating the market with affordable EVs. Last month, Bloomberg News reported that Tesla had to cut production at its Shanghai factory due to a decline in sales growth in the country.
Tesla attempted some strategic maneuvers at the close of the quarter in order to enhance sales, as is customary. The company offered a one-month complimentary trial of its advanced driver assistance software, known as Full Self-Driving, despite not enabling full autonomy in vehicles. It hinted throughout March about raising prices beginning April 1.
