Tesla Quarterly DeliveryThe ratings fell for the first time in nearly four years and fell short of Wall Street analysts' estimates amid a challenging competitive landscape in the EV market and questions about the company's direction.

O Led by Elon Musk The automaker's shares fell 4.9% during Tuesday's trading session and fell another 0.28% in after-hours trading, with shares down nearly 33% for the year. This followed Tesla's announcement that it delivered around 387,000 vehicles in the first quarter – well below expectations of around 443,000 and an 8.5% decrease compared to the first quarter of last year.

“Let's call it what it is: Although we were predicting a bad 1Q, this was an absolute disaster in 1Q that is difficult to explain,” wrote Dan Ives, managing director and equity analyst at Wedbush Securities, in a note to investors.

TESLA STOCK SLIDES IN LARGE DELIVERIES

Tesla delivered almost 387,000 vehicles in the first quarter, well below the 443,000 expected by some analysts and an 8.5% drop from the previous year. (Joe Raedle/Getty Images)

He added that the company remains “optimistic about the long-term story given the growth prospects” but described the delivery numbers as a “train wreck in a brick neighborhood” for Tesla.

Clock Security Last To change To change %
TSLA TESLA INC. 166.63 -8.59 -4.90%

Tesla faced an escalation price war in Chinaa key market for the electric vehicle maker, as low-cost competitors like BYD have forced it to cut prices and squeeze its margins.

High interest rates in the US, a byproduct of the Federal Reserve's fight against inflation, have also made the country more expensive to live in. American car buyers – a dynamic Tesla has sought to counteract with temporary discounts to attract customers.

TESLA HAS NEW COMPETITION WITH A CHINESE EV WITH A LOWER PRICE THAN THE MODEL 3

Elon Musk

Elon Musk is facing criticism over Tesla's poor quarter. (Slaven Vlasic/The New York Times/Getty Images)

The company also faced production problems at its Gigafactory near Berlin, Germany. It announced a nearly two-week pause in production at the facility in late January and early February due to parts shortages caused by the maritime crisis in the Red Sea precipitated by Iran-backed Houthi militants. The facility was also forced to halt production for nearly a week in March due to an arson attack committed by an environmental activist against a electricity transmission facility that helped power the plant.

Having faced a series of headwinds in the last quarter, Ives said Musk needs to right the ship to regain investor confidence in his leadership of the world's most valuable automaker.

“For Musk, this is a fork in the road to get Tesla through this turbulent period, otherwise worrying days could lie ahead. With the ongoing disaster surrounding margins, production and macro events underway, Musk will need to quickly take back the reins. to regain confidence in the Street's eyes with a few quarters to go.”

TESLA CEO ELON MUSK VISITS GIGA BERLIN AS PRODUCTION RESUMES AFTER FIRE ATTACK

Tesla dealership

Tesla's quarterly deliveries fell by about 70,000 compared to Wall Street expectations. (John Paraskevas/Newsday via RM/Getty Images)

Ross Gerber, CEO of Gerber Kawasaki, said in an appearance on FOX Business' “The Claman Countdown” that Tesla's dismal quarter should increase scrutiny of Tesla's board of directors and oversight of CEO Elon Musk.

“How many mistakes can a board make? You have the issue of the salary package in Delaware – we know it's not an independent board, even though they have disclosed in documents that they are independent, when that's not true,” Gerber said.

GET THE FOX DEAL ON THE GO BY CLICKING HERE

Host Liz Claman highlighted the competitive challenges in China and the production problems in Germany and Gerber said that while some of these factors should not be discounted, he added that Tesla vehicles “are the best vehicles on the road from a quality and performance standpoint by a large margin and are very cool vehicles.”

Reuters contributed to this report.

Source