Tesla sales drop nearly 9% at start of year as competition increases and demand for electric vehicles declines

DETROIT (AP) — Tesla sales fell sharply last quarter as global competition increased, electric vehicle sales growth slowed and price cuts failed to attract more buyers.

The Austin, Texas-based company said it delivered 386,810 vehicles from January through March, down nearly 9% from the 423,000 it sold in the same quarter last year.

Sales also fell far short of Wall Street expectations. Analysts polled by FactSet expected Tesla Inc. would supply 457,000 vehicles.

The company blamed the decline in part on the introduction of an updated version of the Model 3 sedan at its Fremont, California, plant, plant closures due to Red Sea diversions and an arson that knocked out power to the German plant.

Tesla predicted this in its letter to investors in January “significantly lower” sales growth this year. The letter stated that Tesla is between two major growth waves, one of the global expansion of the Models 3 and Y, and a second of Model 2, a new, smaller and cheaper vehicle.

Last year, Tesla dramatically cut prices in the US by as much as $20,000 on some models. In March, it temporarily cut $1,000 off the Model Y, its best-selling car. The cuts reduced the company’s profit margins, scaring investors.

Shares of Tesla fell 6.3% at the opening bell on Tuesday, continuing a long decline. Investors have cut about 34% of the company’s value so far this year and dumped shares after growing wary of the massive growth story Tesla has been telling.

Wedbush analyst Dan Ives, normally bullish on the stock, wrote in an investor note last week that first-quarter deliveries would be a “nightmare quarter” for Tesla.

Ives gave the shares a…

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