Business

Tesla’s sales drop 9% for first decline in four years as international EV competition revs up

Tesla posted its first year-over-year drop in quarterly car deliveries since 2020, stoking concerns about the company’s global market share as international competition has revved up.

Elon Musk’s electric car maker on Tuesday said it delivered 386,810 vehicles globally in the first three months of 2024, according to a press release — down more than 9% from the 422,875 vehicle sales in the first quarter of last year. The number came in well below Wall Street’s expectations of 457,000 deliveries.

The Austin, Texas-based company had produced more than 433,000 vehicles intended to be delivered during the first quarter, meaning roughly 12% of its inventory went unsold.

Tesla blamed the shortfall on shipping diversions from the Red Sea, which has seen commercial vessels taking much longer and costlier routes away from Suez Canal and around the Cape of Good Hope to dodge attacks from Houthi rebels — who have been attacking ships in a move of support for Palestinians amid the Israel-Hamas war.

An arson attack at Gigafactory Berlin proved to be another setback, Tesla said, as well as construction of its production ramp at its Fremont, Calif., factory.

Tesla said it delivered 386,810 vehicles globally in the first three months of 2024 on Tuesday — down more than 9% from the 422,875 vehicle sales in the first quarter of last year. AFP via Getty Images

The gap between production and deliveries suggests “that beyond the known production bottleneck, there may also be a serious demand issue,” Deutsche Bank analyst Emmanuel Rosner wrote in a note to investors, according to The Wall Street Journal.

The lion’s share of Tesla’s sales came from the 369,783 Model 3s and Model Ys, the Elon Musk-owned firm said.

The Elon Musk-owned EV giant blamed diversions in the Red Sea, a fire at its Berlin Gigafactory and setbacks at its Fremont, Calif., plant on its poor performance. REUTERS

Representatives for Tesla did not immediately respond to The Post’s request for comment.

Despite the shortfall, the results were enough for Tesla to reclaim the title as the world’s top EV seller from BYD.

Tesla lost the title to BYD late last year at a time when the Chinese-made EV rival was touted for offering higher-volume models that cost much less than what Tesla charges for its cheapest Model 3 sedan in China.

Short for Build Your Dreams, the carmaker sold 300,114 all-electric vehicles globally in the first three months of the year, up 13% from the same period in 2023.

Though BYD’s vehicles won’t be found on US roads, its success is a growing sign of China stepping on the gas in the race for global domination of the auto industry.

In 2008, Berkshire Hathaway invested about $230 million for an almost 10% stake in BYD, which has since soared roughly 35-fold, to around $8 billion, according to Bloomberg.

Still, Tesla’s first-quarter results were enough for it to reclaim the title as the world’s top EV seller from Chinese rival BYD. POOL/AFP via Getty Images

In recent years, the Chinese automaker has also lured top talent away from other luxury car companies, including Ferrari’s head of exterior design, a top designer for Mercedes-Benz and Wolfgang Egger, who joined as design chief in 2016 — a role he previously held at Audi and Alfa Romeo.

Meanwhile, Japanese automaker Nissan has also laid out plans for 30 new vehicles — 16 of which are set to be all-electric.

The company said last week that seven of its forthcoming new models will be reserved for the US and Canada alone, though it wasn’t immediately clear how many of those vehicles would be fully electric.

Nissan also teased in its press release that the Americas will be getting “e-POWER and plug-in hybrid models,” which use a mix of electricity and fuel for power.

Tesla is set to report its full financials for the first quarter of 2024 on April 23.

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