Q1 flash crashed, and Tesla couldn't sell it

Musk: It's all falling, it's not just me"

Author: Truman

Edited by Qin Zhangyong

I knew that the sales in the first quarter were not good, but I didn't expect it to be so bad.

Tesla's Q1 deliveries plummeted 8.5% year-on-year to 386,800 units, far below analysts' expectations.

According to FactSet data, analysts on average expect Tesla deliveries of about 457,000 vehicles, with forecasts ranging from 414,000 to 511,000 units, and actual sales are below the minimum standard.

As a result, the major media began to collectively sing about it.

CNBC said that Tesla suffered internal and external troubles in the first quarter;

The Washington Post said that Tesla's Q1 deliveries fell and it was a dismal start;

Reuters went even further, directly calling it a "true disaster".

Ross Gerber, CEO of Gerber Kawasaki Wealth and Investment Management, attributed the decline in Tesla's sales to Musk's problems, because his "harmful behavior" caused Tesla's cars to not sell.

Faced with the start of Tianhu, Musk couldn't sit still and immediately replied, he was really an idiot, he didn't even know that he was an idiot. Because "BYD's sales are down 42% from the previous quarter, and this quarter has been tough for everyone." ”

It is worth noting that BYD's pure electric sales in the first quarter were 300,000 units, and judging from the data, Tesla overtook BYD and regained the title of the world's largest pure electric vehicle manufacturer.

But the truth is far from that simple.

01 

Back to the level of the end of 2022

According to the first quarter 2024 vehicle production and delivery report, Tesla produced 433,000 new vehicles in the first quarter and delivered 386,000 units.

Specifically, Tesla produced a total of 412,000 Model 3 and Model Y models in Q1, as well as 20,000 other models.

The Model 3 and Model Y delivered a total of 369,000 units in Q1, and Tesla did not give more specific production and delivery data for the two models, but judging from the registration figures, most of them may have been contributed by Tesla Model Y.

In addition, Tesla did not separately announce the delivery information about the Cybertruck, only classifying it under other models along with the Model S and Model X, with a total of 17,027 units sold.

Tesla usually sends analysts' forecasts to large investors a few days before the official release of production and sales figures, and then the news is disseminated publicly, but this time, Tesla did not send analysts' forecasts to investors until the day before the release of the data.

Previously, Wall Street estimated Tesla's sales figure for the first quarter of 2024 at 431,000 units. At the beginning of the year, analysts expected Tesla's sales to hit a high of 484,000 units in the fourth quarter of last year.

However, after Musk's unusually cautious statement at the end of January, analysts have lowered Tesla's sales forecast for Q1 a lot. Even so, everyone is still "cautiously optimistic", and until last week, the consensus of analysts' sales expectations for Tesla's Q1 was still around 470,000 units.

It's just that what everyone didn't expect was that it was so low.

In fact, there were only 387,000 units, a decrease of about 8.5% compared to the 422,000 delivered in the first quarter of 2023, and a decrease of 20% compared to the fourth quarter of last year.

The delivery figure of less than 400,000 has brought Tesla back to the level of the second half of 2022, and it was also the last time when sales were below 400,000, with 344,000 and 405,000 units sold in the third and fourth quarters of 2022, respectively.

According to Troy Teslike, a well-known Twitter account that tracks data analysis such as Tesla's deliveries, Tesla has only experienced one decline since 2012, and it was in the second quarter of 2020, when production and deliveries were postponed worldwide due to the new crown epidemic.

This time, Tesla directly recorded the largest decline in the company's history.

Although sales fell short of expectations, Tesla said it deployed a new record of 4,053 megawatt-hours of energy storage in the first quarter.

02 

Two fists are hard to beat with many hands

The collapse is so unusual that even Tesla, which has rarely commented on production and delivery announcements, took the initiative to explain.

There are three main reasons for the decline:

The first reason is that at the Fremont plant in California, USA, production of the upgraded Model 3 is in its early stages.

The second reason is the outbreak of the Red Sea Crisis, which interrupted the supply of parts caused by Tesla, causing transportation problems, and Tesla announced on January 29 this year that it would temporarily suspend production at its factory in Berlin until February 11, when the air route was restored.

At that time, many cargo ships from Asia could not make it to Europe via the shorter Red Sea and the Suez Canal, and had to make a detour to Africa, including parts from China that Tesla's German factory needed, such as batteries.

The third reason is that the German factory, which had finally resumed production, was attacked by malicious arson, which once again led to the shutdown of the factory.

In early March, "Tesla opponents" set fire to a transmission tower near Tesla's German Gigafactory, cutting off power to the entire factory and residents of nearby towns, as well as parts of Berlin, and the Tesla Berlin factory was subsequently evacuated, with the end result being a temporary shutdown.

Andre Thiriger, head of the German plant, said that more than 10,000 employees at the plant were forced to go home due to production halts, and that more than 1,000 vehicles could not roll off the assembly line every day during the shutdown, "which meant a nine-figure loss for us".

Finally, a week after a production shutdown due to arson, Tesla's German factory resumed production.

Although the strong never complain about the environment, the current situation facing Tesla is indeed not all smooth sailing.

From a macro point of view, the global demand for electric vehicles has begun to slow down, and the total sales of pure electric vehicles in Europe and the United States in 2023 will continue to grow, but the growth rate has slowed down significantly compared with before.

According to Bloomberg, some analysts expect the growth rate of new car sales in the European market to slow from 14% to 5% this year, and demand will enter a downturn.

At the same time, on the pure electric track, overseas car giants suddenly stopped stepping on the "electric door" and successively announced the postponement of the electrification strategy. The U.S. government has also relaxed the requirement for the proportion of electrification of automotive products, while the United Kingdom has announced that it will postpone the ban on gasoline vehicles from 2030 to 2035.

In addition, consumers are not as enthusiastic about pure electric vehicles as before, and in the 2024 Consumer Choice Car Ranking recently released by Consumer Reports in North America, six of the top 10 models are hybrid models, while only one Model Y is on the list of pure electric models, and the other three are gasoline models.

Although to some extent it is an affirmation of Tesla's product strength, it also indirectly reflects the extreme imbalance of Tesla's product system, after all, the entire company cannot be supported by only one model. Reuters, citing survey data from Caliber, reported that Tesla's potential customer base in the United States was shrinking in the first quarter of this year.

Back in China, Tesla's situation can only be described as embattled, and the new cars that have been launched one after another are almost without exception benchmarking against Tesla.

Far from it, take the two new cars Xiaomi SU7 and Denza N7 that have recently been launched, one is crazy to benchmark Model 3, saying that the design was aimed at Model 3 at the beginning, and the other is disassembling and benchmarking Model Y one by one, and directly shouting Tesla at the press conference.

With the addition of cross-border players such as Xiaomi and Huawei, Tesla has more and more opponents, who used to only need to compete with new forces, and then had to wrestle with traditional car companies, and now they have joined mobile phone manufacturers such as Xiaomi and Huawei. In the face of these opponents, Tesla is indeed starting to weaken.

03 

The trillion market value fell by half

After releasing its report on vehicle production and deliveries for the first quarter of 2024, Tesla's stock price has fluctuated again.

Before the U.S. stock market opened on Tuesday, Tesla's stock price fell more than 7% to finally close at $166.63 per share, and its market value evaporated by $27.36 billion (about 198 billion yuan) in just one trading day.

Tesla's stock price fell 29% throughout the quarter, the largest quarterly drop since its IPO in 2010. Since the beginning of this year, Tesla's stock price has fallen by nearly one-third, and its market value has evaporated by more than $260 billion, and Tesla's current market value is $530.7 billion, nearly half of the trillion at its peak.

On October 26, 2021, Tesla's market value once soared to $1.03 trillion, surpassing the sum of 11 traditional car giants such as Toyota, Volkswagen, and General Motors, and becoming a new member of the trillion-dollar club after Apple, Amazon, Google, and Microsoft.

In the past three years, Tesla's stock price has experienced many ups and downs, and Gary Black, managing partner of The Future Fund, LLC, a well-known investment advisory firm in the United States, pointed out that Wall Street analysts may lower Tesla's sales and earnings per share expectations for the full year of 2024 due to Tesla's first-quarter car production and delivery data falling short of expectations.

Previously, Tesla has been lowered by two investment banks, with UBS lowering Tesla's price target from $225 to $165, maintaining a neutral rating. Wells Fargo downgraded it to sell and raised its price target to $125 from $200.

Analysts at Wells Fargo believe that Tesla is a "growth company without growth" and is overvalued, and expects zero sales growth this year and sales will start to decline in 2025.

It is reported that Tesla will release its financial report for the first quarter of 2024 on April 23 and hold a conference call, and there is news that it may reveal the delivery plan for 2024.

Tesla did not previously give this year's delivery target in its 2023 financial report, only saying that sales growth will slow down, and some analysts predict that Tesla's sales this year may reach 2.2 million units, a year-on-year increase of about 20%, which is lower than the 50% growth rate set by Tesla.

This number obviously does not meet Musk's expectations, and now that Q1 is over, the fight and competition will continue, and it seems that it will be difficult for Tesla to return to the peak of market value three years ago.