Tesla reports disappointing first-quarter performance, shares decline

Tesla CEO Elon Musk announced an 8.5% drop in auto-delivery during first quarter of business, affecting the company’s shares

Elon Musk, the CEO of the well-known electric vehicle (EV) maker Tesla, announced an 8.5 percent drop in auto-deliveries during the first quarter of business. The company’s shares have been significantly influenced by this decline, which was less than anticipated by top experts.

According to Tesla’s official statistics, 386,810 units were delivered during the quarter. A difficult sales climate in China, where Tesla confronts fierce competition from regional EV makers, is partly to blame for the drop. Production figures also saw a minor decline, coming in at 433,371 automobiles, or around 1.7% less than before.

Analysts had predicted a difficult quarter for Tesla, especially in view of rumors indicating a reduction in production in China, a country where local manufacturers like BYD are gaining ground. Moreover, an incident in Germany in early March that involved a suspected arson assault on neighboring power cables negatively affected production, clouding Tesla’s operations in Europe.

Tesla lowered prices in a number of areas, including the US, in reaction to escalating competition and changing market conditions. However, these changes have made the company’s earnings projection less optimistic.

Industry watchers are concerned after the first quarter’s underwhelming results. “While we were anticipating a bad 1Q, this was an absolute disaster,” Wedbush analyst Dan Ives said. He underlined how crucial it is that Musk effectively steers the company’s course during this time. Ives cautioned that failing to do so may result in difficult times ahead and even sabotage Tesla’s long-term story.

Tesla’s shares fell 5.2% in early trade after the company’s first-quarter data were released, indicating investor dissatisfaction and apprehension about the company’s prospects. 

Source: AFP