Tesla’s shares plummeted on Wall Street after the carmaker reported lower vehicle deliveries in the first quarter of the year compared to expectations. The company delivered 386,810 vehicles, falling short of analysts’ estimated 457,000. Production also decreased by 8.5% to 433,371 cars. Tesla attributed the decline in volumes to production challenges with the new version of the Model 3 at its Fremont plant in California, as well as delivery issues related to conflicts in the Red Sea and a sabotage incident at its German factory.
Investors and analysts alike are concerned about Tesla’s first quarter performance. Analysts at Wedbush described it as “disastrous,” stating that it was difficult to explain the extent of the negative impact on Tesla’s market performance. The company had previously implemented price cuts in an effort to improve affordability amid rising interest rates and inflation. However, in mid-March, Tesla announced a $1,000 increase in Model Y prices effective April 1st.
Tesla’s challenges in the first quarter have highlighted its vulnerability to external factors such as geopolitical conflicts and production disruptions. Investors will closely monitor how Tesla addresses these challenges and bounces back in future quarters to regain market confidence.
