Current:Home > ContactTesla sales drop as competition in the electric vehicle market heats up -ProfitPioneers Hub
Tesla sales drop as competition in the electric vehicle market heats up
View
Date:2025-04-28 00:38:21
Tesla sales fell sharply last quarter as competition in the electric vehicle market increased worldwide and price cuts the company enacted months ago failed to entice more buyers.
The Austin, Texas, company owned by Elon Musk, said Tuesday it delivered 386,810 vehicles from January through March, almost 9% below the 423,000 it sold during the same period last year. The company blamed the decline in part on phasing in an updated version of the Model 3 sedan at its Fremont, California factory. Plant shutdowns due to shipping diversions in the Red Sea, and an arson attack that knocked out power to its German factory also caused fewer deliveries, it said.
Last year, Tesla dramatically lowered prices by up to $20,000 for some models. In March, it temporarily knocked $1,000 off the Model Y, its top-selling vehicle. The reductions cut into the company's profit margins, which spooked investors.
The drop in Tesla's sales marks the first time its number of vehicle deliveries has fallen since 2020, the Wall Street Journal reported. The company's poor performance last quarter "was an unmitigated disaster that is hard to explain away," Wedbush Securities analyst Dan Ives said Tuesday.
In its letter to investors in January, Tesla predicted "notably lower" sales growth this year. The company added that it's between two big growth waves — one from global expansion of the Models 3 and Y; and one from the Model 2, a new smaller and less expensive vehicle.
"For Musk, this is a fork-in-the-road time to get Tesla through this turbulent period, otherwise troubling days could be ahead," Ives said. "With the ongoing debacle around margins, production and ongoing macro events, Musk will need to quickly take the reins back in to regain confidence in the eyes of Wall Street with a big few quarters ahead."
Automakers around the globe have indeed rolled out EVs aimed at competing with the likes of Tesla's Model Y and Cybertruck. As more Americans grow curious about owning EVs, companies like Ford and General Motors are investing billions of dollars to produce vehicles that are less expensive than Tesla cars. Between 2018 and 2020, Tesla accounted for 80% of EV sales in the U.S., but that figure fell to 55% in 2023, according to Cox Automotive.
A record 1.2 million EVs were sold in the U.S. last year, according to Cox data. A semiconductor chip shortage three years ago kept some major automakers from running their EV factories at full capacity, but those woes have dissipated and companies are starting to rev up production, auto experts said.
During the quarter, Tesla lost production time in Germany after what is suspected to have been an arson attack cut its power supply. U.S. production was slowed by an upgrade to the Model 3, and Ives estimated that Tesla's China sales slid 3% to 4% during the period.
Deliveries of the Models 3 and Y, which are by far Tesla's top sellers, fell 10.3% year over year to 369,783. Sales of the company's other models, the X and S and the new Cybertruck, rose almost 60% to 17,027. Tesla produced 10% more vehicles than it sold during the first quarter.
—The Associated Press contributed to this report.
- In:
- Tesla
- Technology
- Elon Musk
- Consumer News
- Electric Vehicles
- Electric Cars
Khristopher J. Brooks is a reporter for CBS MoneyWatch. He previously worked as a reporter for the Omaha World-Herald, Newsday and the Florida Times-Union. His reporting primarily focuses on the U.S. housing market, the business of sports and bankruptcy.
TwitterveryGood! (95469)
Related
- Which apps offer encrypted messaging? How to switch and what to know after feds’ warning
- A happy retirement: Marine K-9s reunite with first handlers
- Border arrests plunge 29% in June to the lowest of Biden’s presidency as asylum halt takes hold
- Joe Scarborough criticizes MSNBC for taking 'Morning Joe' off-air Monday: 'Very disappointed'
- Woman dies after Singapore family of 3 gets into accident in Taiwan
- RHONJ’s Danielle Cabral Confirms the Season 14 Finale Is Just as Shocking as You'd Expect
- YouTuber Billy LeBlanc's Girlfriend Natalie Clark Dies From Bacterial Infection After Eating Raw Oysters
- DJT shares surge after Trump assassination attempt
- Could your smelly farts help science?
- Internet explodes with 50 Cent 'Many Men' memes following Trump attack; rapper responds
Ranking
- The Daily Money: Spending more on holiday travel?
- Powerball winning numbers for July 15 drawing; jackpot rises to $64 million
- Save 25% on Ashley Graham's Favorite Self-Tanning Mist During Amazon Prime Day 2024
- Judge refuses to extend timeframe for Georgia’s new Medicaid plan, only one with work requirement
- Newly elected West Virginia lawmaker arrested and accused of making terroristic threats
- Why Jenn Tran’s Bachelorette Contestant Devin Strader Was Called a “F--king Snake”
- RNC Day 2: Here's what to expect from the convention after Trump announced VP pick
- MSNBC’s ‘Morning Joe’ host says he was surprised and disappointed the show was pulled from the air
Recommendation
Apple iOS 18.2: What to know about top features, including Genmoji, AI updates
JoJo Siwa Reveals Her Home Was Swatted Again
How many points did Bronny James score tonight? Lakers Summer League box score
Summer pause: Small business sales growth tapers in June as consumers take a breather on spending
Pregnant Kylie Kelce Shares Hilarious Question Her Daughter Asked Jason Kelce Amid Rising Fame
BMW, Chrysler, Honda among 437K vehicles recalled: Check car recalls here
Details emerge about deaths of dad and daughter from Wisconsin and 3rd hiker who died in Utah park
RHONJ’s Danielle Cabral Confirms the Season 14 Finale Is Just as Shocking as You'd Expect