Setback for electric car pioneer: Tesla starts 2024 with a dip in sales

Setback for electric car pioneer
Tesla starts 2024 with a dip in sales

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Tesla is starting the 2024 car year with unexpected sales losses: delivery figures are falling below expectations for the first time in years. It’s not just the growing competition that’s causing problems for the car manufacturer. Tesla boss Musk is predicting significantly slower growth this year.

The US electric car pioneer Tesla started a difficult car year 2024 with a significant decline in sales. For the first time in almost four years, deliveries fell – according to published data, by 8.5 percent in the first quarter to just under 387,000 cars. Last week, analysts surveyed by Visible Alpha had forecast growth of more than eight percent to a good 458,000 units.

Tesla Motors (USD) 167.38

Tesla is struggling with growing competition from industry newcomers such as smartphone manufacturer Xiaomi in China and the growing range of electric cars from traditional car manufacturers, including German ones. At the same time, demand for electric cars is weakening worldwide due to high interest rates.

At the Tesla factory in Germany, an arson attack on the power supply and supply chain problems recently caused production losses. In addition to the preparations at the Fremont plant in California for the production of the new version of the Model 3, this was one of the reasons for the weaker sales, Tesla explained.

Compared to the previous quarter, sales fell by 20 percent in the first quarter, while analysts had only expected a moderate decline of around five percent compared to the final quarter of 2023. Production from January to March amounted to a good 433,000 vehicles.

The competition is also showing signs of braking

After years of rapid sales growth, which made Tesla the most valuable car company in the world on the stock market, the electric car pioneer is also struggling with headwinds. The effect of price cuts and discounts is now dwindling as Americans are only slowly refreshing their aging model range and will only come up with important new products next year.

Analysts warned that the residual value of cars, which falls with prices, could harm the brand. Tesla boss Elon Musk promised significantly slower growth this year. Analysts previously expected sales to increase by a fifth to 2.2 million cars for the year as a whole, after a good third increase in 2023.

But the competition is also showing signs of slowing down. The Chinese car manufacturer BYD has to give up the position it gained in the final quarter of 2023 as the world’s largest electric car manufacturer to Tesla. BYD sold a good 300,000 electric cars in the first quarter. Tesla shares fell nearly six percent in premarket trading in response to the numbers. With a loss of around 30 percent since the beginning of the year, the paper is at the bottom of the US stock market index S&P 500.

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