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Tesla Hits a Speed Bump: First Quarter Deliveries Fall Short, Stock Tumbles 7%

Tesla’s journey hit a rough patch on Tuesday, with shares skidding down 7% following a disappointing report on vehicle deliveries for the first quarter. The electric vehicle giant managed to get 386,810 cars to their new owners, missing Wall Street’s forecast of 449,080 by a significant margin, as per Bloomberg’s data compilation. This stumble marks Tesla’s first annual sales decline since the COVID-19 pandemic onset in 2020, with a 9% year-over-year dip and a steep 20% fall from the previous quarter’s sales of 484,507 vehicles.

Amidst rising concerns over waning demand in China, operational hiccups in German factories, and the increasing allure of plug-in hybrids, expectations for Tesla’s deliveries had already tempered. Dan Ives, a seasoned analyst at Wedbush, did not mince words, describing the first quarter’s performance as “an unmitigated disaster” and a pivotal moment for Elon Musk and Tesla. “This was a seminal moment in the Tesla story for Musk to either turn this around and reverse the black eye 1Q performance. Otherwise, some darker days could clearly be ahead that could disrupt the long-term Tesla narrative,” Ives commented.

Tesla’s latest stock dip further compounds the difficulties faced since the beginning of 2024 and a marked decline from its zenith in 2021. With a 33% plunge year-to-date and a staggering 60% fall from its all-time high of over $400 per share, Tesla’s road ahead looks challenging.

The pressure is mounting on Tesla and Musk from various quarters. Ives pointed out growing impatience among investors, exacerbated by Musk’s distractions with AI ventures outside Tesla, boardroom dramas, legal complications in Delaware regarding Musk’s compensation, and potential corporate migration to Texas. He added, “Wall Street criticism on Tesla is warranted” as the company grapples with “a horror show” in China and intensifying competition without a significant rebound in profit margins.

For Musk and Tesla, navigating this tumultuous phase is critical. The recent performance serves as a fork in the road, underscoring the need for strategic adjustments to steer the company back on course. Without significant changes, Tesla could face more challenging days ahead, potentially altering the narrative that has propelled the electric vehicle pioneer to unprecedented heights.