Tesla shares DROP 7% after posting massive sales decline in ‘unmitigated disaster’ for for ailing automaker

Tesla sales plunged 7 percent this morning after the electric vehicle maker reported its biggest ever drop in deliveries.

The world’s most valuable automaker delivered 386,810 vehicles in January, February and March, down 20.2 percent from the previous quarter.

On average, Wall Street expected Tesla to deliver about 460,000 vehicles, but some analysts began lowering their expectations to 400,000 in recent weeks.

“While we expected a bad first quarter, this was an absolutely disastrous first quarter that is difficult to explain,” Wedbush analyst Dan Ives said in a research note on Tuesday.

“This was a train wreck into a brick wall for Musk,” he added.

Quarterly deliveries are an important measure of Tesla’s health and investors can consider them as an indicator of sales.

It also reported Tuesday that it produced a total of 433,391 cars during the quarter. The Model 3 and Y represent the vast majority of its sales and deliveries.

The automaker produced 412,376 Model 3/Y vehicles and delivered 369,783.

Musk has previously alluded to a period of poor sales, saying the company is “between two big waves of growth.”

He stated that the first wave was sparked by the launch of affordable models such as the Model 3, which began shipping in 2017, and later the Model Y, which began shipping in 2022. The two vehicles are among the best-selling electric vehicles of the world.

The next wave will come when the company launches its affordable next-generation electric car. It is not expected to go into production until next year.

“We view this as a pivotal moment in Tesla’s history for Musk to turn things around and reverse the poor performance of the first quarter,” Ives said. “Otherwise, there could clearly be darker days ahead that could alter Tesla’s long-term narrative.”

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