Tesla sinks 6% after Q1 deliveries data

Tesla (TSLA.US) is taking a hit today. Company's stock drops over 7% after US electric vehicle manufacturer published production and delivery data for the first quarter of 2023. Data disappointed as the company's operations were impacted by Red Sea conflict and an arson attack at a factory plant in Germany.

Tesla delivered 386 810 vehicles during the first three months of 2024. This is significantly lower than 449 00 expected by analysts. This is a drop of almost 20.2% quarter-over-quarter and a drop of around 8.5% year-over-year. The company produced, 433 371 vehicles during the quarter, also significantly below analysts' expectations. Production was 12.5% quarter-over-quarter lower and around 1.7% lower than in a year ago quarter.

Tesla in Q1 2024

• Deliveries: 386 810 vs 449 080 expected (-20.1% QoQ)
  • Model 3/Y: 369 783 vs 426 940 expected (-10% QoQ)
• Production: 433 371 vs 452 976 expected (-12.5% QoQ)
  • Model 3/Y: 412 376 vs 439 194 expected (-13.5% QoQ)

Source: Bloomberg Finance LP, XTB

These were the first year-over-year declines in deliveries and production since Q2 2020, when the global economy was grappling with the effects of Covid-19 lockdowns. Company explained that low production can be partially blamed at early phase of production ramp-up of the updated Model 3 at Fremont factory. Tesla said that shipping diversions caused by Red Sea tensions as well as an arson at a German factory also negatively impacted production levels.

However, a point to note is a large gap between production and deliveries in Q1 2024. Data implies an inventory build of around 46.5 thousand vehicles - the biggest quarterly surplus in the company's history. This means that, while the aforementioned production bottlenecks have negatively impacted output, demand for Tesla cars is struggling. There are two main reasons behind it. Firstly, spending on high-end products continues to be negatively impacted by high interest rate environment. Secondly, company is experiencing much more competition that it used to, especially from China. It was reported as recently as today that newly presented electric vehicle from Chinese company Xiaomi has sold out for the entire 2024 in just 24 hours!

Tesla will report full Q1 2024 earnings report on April 23, 2024 after close of the Wall Street session.

Tesla (TSLA.US) drops around 6% today, following disappointing Q1 delivery and production data. Stock continues to trade in a falling wedge pattern and is retesting the $165 support zone, that has halted downward move recently. A break below may pave the way for a test of the April 2023 lows in the $152 area. Source: xStation5