Tesla Sales See Modest Recovery Following Challenging Period of Executive Backlash

Tesla Posts First Quarterly Sales Increase in Three Years

New York — Tesla, Inc. reported a 6% increase in vehicle sales in the past three months, marking the first time in three years that the company has posted a first-quarter increase from the year-earlier period. The sales figure, which rose to 358,023, follows a year of plunging sales due to an aging lineup and boycotts over Elon Musk's right-wing political stands.

The sales in the three months through March were 6% lower than the 381,000 that financial analysts had expected, according to a survey by researcher FactSet. This discrepancy highlights the uncertainty surrounding the strength of the recovery. As shown in the table below, Tesla's sales in the first quarter were significantly lower than their peak in 2023.

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Tesla's sales have been impacted by the company's aging lineup and the rise of rival electric vehicle (EV) makers. Chinese maker BYD recently reported it had made 2.26 million electric vehicles last year, surpassing Tesla's 1.64 million to become the new record holder. Tesla's stock was down sharply in early morning trading on the news, dropping 3% to $369 per share.

The introduction of cheaper versions of Tesla models X and 3 late last year may have contributed to the increase in sales. Details of models selling for less than $40,000 were not released but may come out on April 22 when Tesla reports quarterly earnings. Financial analysts expect Tesla will report net income roughly doubled to 25 cents a share on $23 billion in revenue, according to FactSet.

Tesla's stock has been falling along with the market this year, but is still up 30% from a year ago. The company's valuation is sky-high, trading at 181 times expected earnings versus 22 times for the broad stock market. This reflects a marketing victory of sorts for Musk, who has been telling investors to focus less on car sales and more on the company's chances of dominating a future in which fewer people own cars, self-driving Tesla robotaxis are nearly everywhere, and Tesla's Optimus robots are taking over for humans in factories and homes.