Tesla's Q1 Sales Fell Short of Expectations, Causing a Major Drop in Stock Prices

On April 2, Tesla announced global deliveries of 387,000 units in the first quarter, decreasing by 8.5% from 423,000 units in the same period last year and having a 20% decrease compared to the fourth quarter. This is the first time that Tesla's quarterly sales have declined year-on-year since the slight decline at the beginning of the outbreak in 2020. The sales data was also significantly lower than the slight growth expected by Wall Street analysts.

Tesla said part of the reason for the sales decline was that the production of the Model 3 after the Fremont factory update was in the early stages, as well as transport detours due to the Red Sea conflict and the arson at the Berlin super factory caused the factory to shut down.

After Tesla announced poor delivery volume for the first quarter, the company's stock declined nearly 6% in early Tuesday trading. So far this year, Tesla's stock has fallen more than 33%, making it the worst-performing company in the S&P 500 index.

Tesla intends to hold a financial report conference call on April 23 to discuss quarterly results.

Tesla has revolutionized the electric vehicle market with its Model 3 sedan and Model Y crossover, which proves that battery-powered cars can be attractive, practical, and profitable. And these vehicles have dramatically changed the automotive industry landscape and force traditional auto manufacturers to develop their electric vehicle models.

In China, Tesla faces fierce competition from Chinese electric vehicle manufacturers, including newcomers like BYD and mobile phone manufacturer Xiaomi.

On April 2, BYD announced that its EV sales were about 300,000 units, a year-on-year increase of 13%. The company also sold 324,000 plug-in hybrid cars in the first quarter, up 15%.

On March 28, Xiaomi announced the retail price of SU7 in the mainland China market, with standard version, Pro, and Max versions respectively priced at 215,900, 245,900, and 299,900 RMB. 50,000 units were pre-ordered within 27 minutes of listing, and then a total of 88,898 units were reserved within one day.

Following the sluggish sales of cars manufactured in China in January and February, Tesla has reduced the production of Model 3 and Model Y at its Shanghai factory and has cut workers' working time from six and a half days a week to five days.