Tesla’s lackluster sales performance in the first quarter of 2024 has caught many analysts off guard, signaling deeper issues for both Elon Musk’s electric vehicle manufacturer and the entire EV market.that Tesla’s first quarter deliveries for 2024 are shaping up to be a major disappointment, with the company potentially failing to match the 422,875 deliveries it made in the same period last year.
According to third-party data, Tesla’s deliveries declined by around five percent in its two largest markets — the U.S. and China — in the first few months of 2024 compared to a year ago. While sales in Europe were up 41 percent year-over-year for January and February, the pace has slowed from the end of 2023.
The disappointing sales can be attributed to a combination of factors, including softening demand for EVs despite aggressive price cuts and enhanced U.S. subsidies, as well as production hiccups related to a Model 3 line update in Fremont and an arson attack at the Berlin factory. Demand for EVs has weakened significantly despite Joe Biden’sConsensus analyst estimates for Tesla’s Q1 deliveries have fallen in recent weeks but remain significantly higher than what the data suggests.
The delivery shortfall implies that earnings estimates for Tesla are also too high. This spells further trouble for Tesla because the company’sSome investors are excited about Tesla’s progress in autonomous driving software, but this remains difficult to quantify. Ultimately, vehicle sales are the foundation of Tesla’s growth story, including potential future software revenue. The more cars Tesla sells, the larger its addressable market for digital subscriptions down the line.
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