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More than £20 billion was wiped off Tesla’s value last night after Tesla reported its first fall in car sales in four years.
The US electric car maker, led by billionaire Elon Musk, delivered 386,810 vehicles in the three months to the end of March.
It was enough for the company to regain its crown as the world’s top seller of electric cars, after a sales slump at Chinese rival BYD.
But the total was more than a fifth lower than the previous quarter and about 9 percent less than the same period in 2023.
It was the first year-on-year sales decline since 2020, when the business was effectively brought to a standstill by Covid-19.
Darker days: Tesla boss Elon Musk has seen the electric car maker’s first sales decline in four years
Tesla shares fell by more than 5 percent, wiping £22 billion off the company’s value.
The stock has lost a third of its value this year.
Analysts called the update an “unmitigated disaster” for Tesla and Musk.
“It was another bad day for Elon Musk,” said Danni Hewson, head of financial analysis at broker AJ Bell.
The total number of cars delivered by Tesla was well below Wall Street expectations of 454,000, amid declining demand for electric vehicles (EVs). However, Tesla managed to regain its crown as the world’s largest EV seller.
Warren Buffett-backed BYD overtook Tesla in the final quarter of 2023 when it sold 526,409 electric vehicles, compared to Tesla’s 484,507.
This led some analysts to dub the company the “Tesla Killer” after it emerged victorious in a brutal price war in China, a country that builds and buys more electric cars than the rest of the world combined.
In January, Musk warned that Chinese automakers were about to “demolish” global rivals.
But BYD’s supremacy over Tesla has proven to be short-lived.
BYD bosses revealed on Monday that the company delivered just 300,114 electric vehicles in the final quarter of 2024.
Both Tesla and BYD have suffered as demand for electric cars continues to decline in favor of hybrid or gasoline alternatives. Tesla said growth this year would be “significantly lower” than in 2023.
Slowdown: Tesla delivered 386,810 vehicles in the three months to the end of March. Shares fell by more than 5%, wiping £22 billion off the company’s value
And the company cited “ship diversions caused by the Red Sea conflict” and an arson at its Berlin factory for slowing production rates.
The company produced just 433,371 vehicles this quarter – again far fewer than the 494,989 that rolled off the line in the last three months of 2023.
Dan Ives, technical analyst at asset manager Wedbush, said it was a “nightmare quarter for Tesla, with Musk under pressure from Wall Street and China demand still very weak for 2024.”
He described the sales decline as an “unmitigated disaster,” adding: “This is a pivotal moment in the Tesla story for Musk to turn this around and reverse the black-eyed first quarter.
Otherwise, there could clearly be dark days ahead that could disrupt the Tesla story in the long run.
For Musk, this is a fork-in-the-road time to guide Tesla through this turbulent period.
Hewson said: ‘Tesla is not alone in waning excitement about the shift to green motoring, as price-sensitive consumers are less likely to change deeply entrenched habits.
“This feels more like a bump in the road than a traffic light.”