Wall Street analysts are prepared for Tesla's pessimistic first quarter delivery data, but the actual situation is even worse than they estimated.
On April 2nd local time, Tesla released its first quarter delivery data, which showed that from January to March this year, Tesla delivered a total of 386800 vehicles worldwide, setting a new low in the past five quarters. The delivery volume decreased by 8.5% compared to the same period last year, and by 20.2% compared to the fourth quarter of last year.
Affected by the flash sales in the first quarter, Tesla's US stock market plummeted by nearly 7% at one point, with the largest decline among S&P 500 index constituent stocks, and its latest market value was $530 billion. As one of the "seven giants of the US stock market," Tesla's stock price has fallen by 28% so far this year, making it the worst performing technology stock among the seven.
This is also the first time in nearly 4 years that Tesla's quarterly delivery volume has decreased year-on-year, far below the Wall Street average estimate of 454200 vehicles. In the second quarter of 2020, affected by the global COVID-19, Tesla stopped production for a time, leading to a decline in sales.
Tesla attributed the decline in sales to the early ramp up of production capacity at the Fremont factory in California after upgrading to the Model 3, as well as the transportation diversion caused by the Red Sea conflict and the Berlin super factory arson attack, resulting in factory closures.
In January of this year, due to a shortage of parts transportation caused by the Red Sea situation, Tesla suspended most of the car production at its Berlin factory; Two months later, the Berlin factory was forced to shut down again due to environmentalists setting fire.
These objective reasons can to some extent explain the slowdown in Tesla's sales, but the fundamental problem is that this electric vehicle manufacturer, which was originally in a leading position, is becoming increasingly difficult to cope with the increasingly fierce market competition and global slowdown in pure electric vehicle demand, and its skilled price reduction methods are no longer effective.
Dan Ives, an analyst at Wade Bush Securities who has long been optimistic about Tesla, said that the first quarter was a "complete disaster" for Tesla. In his view, Tesla is at a critical moment. "Elon Musk needs to turn around the underperforming situation, otherwise some dark days are about to come, which may disrupt Tesla's long-term narrative."
Tesla has failed to effectively address the issues of product lineup and model cycles. Automobile companies usually carefully set intervals for product updates to ensure a steady cash flow while continuously providing consumers with fresh products. However, Tesla has only launched 5 passenger cars in its 20 year history, including the low production electric pickup truck Cybertruck.
In the Chinese market, where the demand for new energy vehicles is the strongest and competition is the most intense globally, Tesla's product aging problem is becoming more apparent. Chinese automotive brands, which are also in the 200000 yuan price range, can provide consumers with higher hardware configurations and a better intelligent driving experience.
Chinese car companies are also launching new products at a faster pace. The development speed of new car models for leading automotive brands has been shortened to 18 months. McKinsey found that there were over 40 newly launched electric models in the price range of only 200000 yuan last year, and they generally have a high level of configuration.
Xiaomi is the latest company to announce benchmarking against Tesla's development models. Interface News learned from insiders that the internal development logic of the first product, Xiaomi SU7, completely follows Tesla Model 3. Citigroup analysts predict that the shipment volume of Xiaomi SU7 will reach 60000 units this year.
Under continuous pressure, Tesla's sales in the Chinese market have not made any new breakthroughs. According to data from the China Association of Automobile Manufacturers, Tesla's sales in China in March were 89000 vehicles, which is basically the same as the same period last year.
And this delivery data is difficult to maintain at the cost of sacrificing gross profit margin. In the first three months of this year, Tesla China launched three direct price reductions or preferential subsidies, and the frequency of price adjustments is close to last year.
Wall Street analysts have lowered Tesla's profit forecast for this year, which will be much lower than in 2023. According to FactSet data, Wall Street currently expects Tesla's earnings per share to be only $2.87 in 2024. Compared to last year's $3.12, it has decreased by 8%. Wall Street's general expectation for Tesla's 2024 earnings per share has decreased by nearly 25% since the end of 2023.
Tesla has long had expectations for this year's sales bottleneck and has rarely given a sales target for this year. Musk warned in January of this year that Tesla's sales growth rate will significantly slow down in 2024, falling between two major growth waves. This pure electric vehicle company will hope to rely on low-cost models that will only be put into production by the end of next year.
Perhaps the only consolation for Tesla is that it returned to the top spot in global pure electric vehicle sales in the first quarter of this year. BYD surpassed Tesla for the first time in the fourth quarter of last year, becoming the world's largest pure electric seller. In the first three months of this year, BYD sold a total of 626300 new energy vehicles, of which 300000 were pure electric vehicles, nearly 90000 units lower than Tesla.