- Tesla shares fell nearly 4% after Q1 deliveries missed Wall Street expectations
- Global deliveries rose 6.3% YoY but were down 14.4% sequentially to 358,023 vehicles
- China-made Model 3 and Y sales grew 8.7% in March, boosting overall China sales by 23.5%
Shares of Tesla came under pressure in pre-market trade on Thursday, even as the company reported a modest rise in quarterly auto sales, missing Wall Street expectations.
The stock fell nearly 4% on the Nasdaq, as investors reacted to weaker-than-expected first-quarter delivery numbers.
Deliveries miss estimates
Tesla reported global deliveries of 358,023 vehicles for the January–March quarter. While this marked a 6.3% increase from a year earlier, it was down 14.4% sequentially and fell short of analysts' expectations of 368,903 vehicles, according to Visible Alpha data.
The miss comes as demand took a hit following the expiry of US tax credits for electric vehicle purchases, weighing on sales momentum.
Growing concerns on outlook
The EV maker has now posted two consecutive years of declining deliveries, a first in its history. Analysts have also trimmed their forecasts for 2026, with some warning of a potential third straight annual drop.
Adding to the pressure, Tesla lost its position as the world's largest EV maker last year to BYD, whose rapid growth in battery electric vehicles has intensified competition globally.
China provides some relief
There were, however, some bright spots. Sales of Model 3 and Model Y vehicles produced at Tesla's Shanghai plant rose 8.7% year-on-year to 85,670 units in March, according to data from the China Passenger Car Association.
This marked the fifth consecutive month of rising sales, supported by improving demand in Europe and exports to other markets.
For the full January–March period, China-made vehicle sales climbed 23.5% year-on-year, a sharp acceleration from the 1.9% growth seen in the previous quarter.
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Competition remains intense
Despite the recovery in China, Tesla continues to face stiff competition, particularly from Chinese rivals. The company's share in China's EV market has slipped to around 8% from 10% in 2024, while it also lost nearly half its market share in Europe last year.
Meanwhile, BYD's strong global expansion has kept pressure on Tesla, even as the Chinese automaker grapples with slowing demand in its home market.
What analysts are watching
Some analysts believe higher oil prices, driven by the ongoing Iran crisis, could support EV demand in the near term. Tesla's global deliveries are also expected to rebound around 10% from last year's weak base, when demand was hit by consumer backlash linked to Musk's political views.
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