Tesla Shares Plummet 4.5% Amid Disappointing Q1 Deliveries and Production Shortfalls

Tesla Shares Falter as Vehicle Deliveries Miss Wall Street Estimates

Tesla's stock price plummeted 4.61% on Thursday, April 2, to a low of $363.65 per share, marking the second consecutive quarter the electric vehicle maker has failed to meet analyst projections. The company's vehicle deliveries and production numbers fell short of Wall Street estimates, with 358,023 vehicles delivered worldwide in the first quarter, a 14.4% decline from the fourth quarter.

According to a statement released on Thursday, analysts had anticipated an average of 372,160 units, based on estimates compiled by Bloomberg. This figure had steadily declined in recent weeks. However, Tesla did deliver 6% more vehicles compared to the first quarter of 2025, a period that was unusually weak due to production overhaul and protests linked to CEO Elon Musk's political involvement.

The company's top-selling models, the Model Y SUV and Model 3 sedans, accounted for the bulk of its sales and production, with 341,893 units delivered during the quarter. Deliveries of other electric vehicles, including the Model S, Model X, and Cybertruck, rose to 16,130. Tesla's production numbers were also lower, with 408,386 vehicles produced in the first quarter, including 394,611 Model 3 and Model Y units and 13,775 vehicles from other model lines.

Read also: Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data

Tesla is facing weak demand in its largest market, the US, along with intensifying competition. The expiry of the $7,500 federal tax credit at the end of September dealt a blow to US electric vehicle demand, removing a key incentive for buyers. Beyond domestic challenges, Tesla is also grappling with rising competition from Chinese EV makers globally and an ageing vehicle lineup.

The company is in the process of discontinuing its two oldest models, the Model S sedan and Model X SUV. This marks the first time in the company's history that sales have declined for two consecutive quarters. Analysts have also trimmed their delivery forecasts for 2026, with some warning of a potential third straight annual decline. Tesla has already recorded annual sales declines over the past two years.

In addition to weak vehicle sales, the company's energy business also underperformed during the period. Tesla deployed 8.8 GWh of energy storage products in the quarter, below market expectations. While investors remain focused on Tesla's long-term ambitions in artificial intelligence, including robotaxis and humanoid robots, these initiatives are still in early stages and have yet to generate meaningful revenue.

Read also: US-Iran Tensions Spark Uptick in Oil Prices Amid Global Market Decline

Tesla is scheduled to report its full first-quarter financial results after market close on April 22. The company's shares, part of the 'Magnificent Seven,' have struggled to gain traction since hitting a record high of $498.83 per share and have since declined 27% from that peak, based on the latest low. The stock ended the first quarter of 2026 with a 17.34% decline, extending a weak trend seen over the past two years.