Current:Home > MarketsTesla sales drop as competition in the electric vehicle market heats up-VaTradeCoin
Tesla sales drop as competition in the electric vehicle market heats up
View Date:2025-01-09 10:56:06
Tesla sales fell sharply last quarter as competition in the electric vehicle market increased worldwide and price cuts the company enacted months ago failed to entice more buyers.
The Austin, Texas, company owned by Elon Musk, said Tuesday it delivered 386,810 vehicles from January through March, almost 9% below the 423,000 it sold during the same period last year. The company blamed the decline in part on phasing in an updated version of the Model 3 sedan at its Fremont, California factory. Plant shutdowns due to shipping diversions in the Red Sea, and an arson attack that knocked out power to its German factory also caused fewer deliveries, it said.
Last year, Tesla dramatically lowered prices by up to $20,000 for some models. In March, it temporarily knocked $1,000 off the Model Y, its top-selling vehicle. The reductions cut into the company's profit margins, which spooked investors.
The drop in Tesla's sales marks the first time its number of vehicle deliveries has fallen since 2020, the Wall Street Journal reported. The company's poor performance last quarter "was an unmitigated disaster that is hard to explain away," Wedbush Securities analyst Dan Ives said Tuesday.
In its letter to investors in January, Tesla predicted "notably lower" sales growth this year. The company added that it's between two big growth waves — one from global expansion of the Models 3 and Y; and one from the Model 2, a new smaller and less expensive vehicle.
"For Musk, this is a fork-in-the-road time to get Tesla through this turbulent period, otherwise troubling days could be ahead," Ives said. "With the ongoing debacle around margins, production and ongoing macro events, Musk will need to quickly take the reins back in to regain confidence in the eyes of Wall Street with a big few quarters ahead."
Automakers around the globe have indeed rolled out EVs aimed at competing with the likes of Tesla's Model Y and Cybertruck. As more Americans grow curious about owning EVs, companies like Ford and General Motors are investing billions of dollars to produce vehicles that are less expensive than Tesla cars. Between 2018 and 2020, Tesla accounted for 80% of EV sales in the U.S., but that figure fell to 55% in 2023, according to Cox Automotive.
A record 1.2 million EVs were sold in the U.S. last year, according to Cox data. A semiconductor chip shortage three years ago kept some major automakers from running their EV factories at full capacity, but those woes have dissipated and companies are starting to rev up production, auto experts said.
During the quarter, Tesla lost production time in Germany after what is suspected to have been an arson attack cut its power supply. U.S. production was slowed by an upgrade to the Model 3, and Ives estimated that Tesla's China sales slid 3% to 4% during the period.
Deliveries of the Models 3 and Y, which are by far Tesla's top sellers, fell 10.3% year over year to 369,783. Sales of the company's other models, the X and S and the new Cybertruck, rose almost 60% to 17,027. Tesla produced 10% more vehicles than it sold during the first quarter.
—The Associated Press contributed to this report.
- In:
- Tesla
- Technology
- Elon Musk
- Consumer News
- Electric Vehicles
- Electric Cars
Khristopher J. Brooks is a reporter for CBS MoneyWatch. He previously worked as a reporter for the Omaha World-Herald, Newsday and the Florida Times-Union. His reporting primarily focuses on the U.S. housing market, the business of sports and bankruptcy.
TwitterveryGood! (8)
Related
- Shaboozey to headline halftime show of Lions-Bears game on Thanksgiving
- The Best Prime Day Candle Deals: Nest, Yankee Candle, Homesick, and More as Low as $6
- EPA Announces $27 Billion Effort to Curb Emissions and Stem Environmental Injustices. Advocates Say It’s a Good Start
- How Gas Stoves Became Part of America’s Raging Culture Wars
- Georgia House Democrats shift toward new leaders after limited election gains
- Q&A: Cancer Alley Is Real, And Louisiana Officials Helped Create It, Researchers Find
- Adrienne Bailon-Houghton Reveals How Cheetah Girls Was Almost Very Different
- Indoor Pollutant Concentrations Are Significantly Lower in Homes Without a Gas Stove, Nonprofit Finds
- New 'Yellowstone' is here: Season 5 Part 2 premiere date, time, where to watch
- Fracking Wastewater Causes Lasting Harm to Key Freshwater Species
Ranking
- Police cruiser strikes and kills a bicyclist pulling a trailer in Vermont
- New Mexico State Soccer Player Thalia Chaverria Found Dead at 20
- Nina Dobrev Recalls Wild Experience Growing Up in the Public Eye Amid Vampire Diaries Fame
- Louisiana Regulators Are Not Keeping Up With LNG Boom, Environmentalists Say
- We Can Tell You How to Get to Sesame Street—and Even More Secrets About the Beloved Show
- Save 30% on the TikTok-Loved Grande Cosmetics Lash Serum With 29,900+ 5-Star Reviews on Prime Day 2023
- Six Environmental Justice Policy Fights to Watch in 2023
- Texas Oilfield Waste Company Contributed $53,750 to Regulators Overseeing a Controversial Permit Application
Recommendation
-
Cameron Brink set to make Sports Illustrated Swimsuit debut
-
Texas Regulators Won’t Stop an Oilfield Waste Dump Site Next to Wetlands, Streams and Wells
-
Six Environmental Justice Policy Fights to Watch in 2023
-
38 Amazon Prime Day Deals You Can Still Shop Today: Blenders, Luggage, Skincare, Swimsuits, and More
-
The NBA Cup is here. We ranked the best group stage games each night
-
Robert De Niro's Girlfriend Tiffany Chen Diagnosed With Bell's Palsy After Welcoming Baby Girl
-
The Surprising History of Climate Change Coverage in College Textbooks
-
Teen Mom 2's Nathan Griffith Arrested for Battery By Strangulation