Heading into 2026, Tesla, once a favorite on Wall Street, recorded one of its weakest sales quarters in years as it struggles to shift its business strategy.
In the first quarter, the company delivered 358,023 vehicles, falling short of expectations. Analysts had forecasted average shipments of around 372,160 units, as reported by Bloomberg.
This figure did show a 6.3% increase compared to the same quarter last year, during which Musk faced considerable backlash involving President Trump and the Department of Government Efficiency. However, if you exclude that quarter, these first-quarter deliveries are the lowest since mid-2022.
Tesla’s shares plummeted over 4% following the announcement and have dropped more than 16% since the start of the year. This marks the second consecutive year of declining annual sales.
Wedbush analyst Dan Ives characterized the results as a “disappointing start” for the year. He noted that the company is currently pivoting towards a turnaround effort that includes Musk’s ambitious plans around artificial intelligence and robotics.
“Even though deliveries were lower than anticipated, it didn’t come as a complete surprise, considering the current electric vehicle landscape as the company focuses more on its AI strategy,” Ives mentioned in a note to clients.
Musk has been promoting AI-driven initiatives, like the driverless CyberCab and the humanoid robot Optimus, as crucial to Tesla’s future growth.
Ives pointed out that the emerging robotaxi business remains a significant potential growth area for Tesla’s AI ambitions.
Meanwhile, the automaker is facing difficulties attracting buyers due to its aging vehicle models and heightened competition from Chinese electric vehicle manufacturers like BYD in Europe and Asia. For the time being, car sales continue to account for a large portion of Tesla’s revenue.
Everyone will be watching closely for Tesla’s upcoming earnings report on April 22nd.
