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Electric car manufacturer Tesla is expected to release first-quarter delivery statistics next week, which it says will show a slowdown in sales as tailwinds from increased competition and price cuts in the EV market fade.
The world’s most valuable automaker is bracing for a slowdown in 2024 after years of rapid sales growth. Tesla is expected to deliver 458,500 vehicles in the quarter ending March 31, according to analysts surveyed by Visible Alpha.
This amount is up from the 422,875 units sold in the first quarter a year ago, but represents a 5% decrease compared to the prior fourth quarter of 2024.
Tesla CEO Elon Musk is aggressively cutting prices on its most popular models starting in the second half of 2022 to boost sales in a high-interest rate environment where customers’ car payment costs are rising.
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Tesla is expected to release first-quarter delivery numbers that will show a slowdown in sales as the EV maker faces headwinds. (John Paraskevas/via Newsday RM/Getty Images)
Musk said lower prices were needed to maintain demand for Tesla cars and keep production facilities open, blaming winter and high borrowing costs for weak demand.
| ticker | safety | last | change | change % |
|---|---|---|---|---|
| TSLA | Tesla Inc. | 179.83 | +2.16 | +1.22% |
In February, the company temporarily lowered the price of rear-wheel-drive and long-range Model Y models by $1,000 each, but the price cuts ended in early March.
Last month, in response to a post on Tesla’s “However, consumer demand is seasonal.”
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Sales of Chinese-made Teslas produced at the Shanghai Gigafactory have been sluggish amid price competition with Chinese EV manufacturers such as BYD. (VCG/VCG via / Getty Images)
Tesla is currently offering a $7,680 discount on select new products. Model Y vehicle For US customers. Some Tesla customers are unhappy with the discounts, as they feel the price cuts have reduced the value of their cars.
“Tesla has earned the dubious honor of being America’s fastest depreciating car,” HSBC said in a report last week. “We can see how cheap works for consumables, but for durable goods where residuals are part of the cost equation, we have less confidence that it will work.”
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Tesla is focusing on producing its next-generation electric vehicle, codenamed “Redwood.” (Smith Collection/Gado/Getty Images)
In January, the company warned that sales growth in 2024 would be “significantly lower” due to intensive production. Next generation EVthe code name is “Redwood”.
The company’s Model 3 compact sedan also faces losing a $7,500-per-vehicle federal tax credit due to new eligibility restrictions on battery materials sourced from China. Because they do not comply with the above, they are excluded from this deduction.
Intensifying competition with inexpensive EVs Chinese automakers such as BYDTesla overtook Tesla as the world’s best-selling EV maker in the fourth quarter of last year amid intense price competition, but it has also been a headwind for Tesla’s profits.
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In the first two months of this year, Tesla delivered 131,812 Chinese-made vehicles, down 6.2% from the same period last year.
Tesla stock has fallen more than 28% since the beginning of the year and more than 6% in the last year.
Reuters contributed to this report.
