Earlier this year, Tesla reported a decline in deliveries for the first quarter of 2024, marking the first such drop since the global pandemic began in 2020. Analysts warned that this could signal trouble for the electric vehicle maker, which is grappling with diminishing demand for its outdated product lineup and significant layoffs. However, shareholders opted to reward CEO Elon Musk, overwhelmingly approving a $56 billion pay package. Tesla is set to announce its second-quarter results tomorrow, but Wall Street does not expect any positive news.
Reports suggest that the company is likely to report a second consecutive quarter of declining deliveries. Though the exact percentage decline remains unclear, Bloomberg anticipates a 5.4% drop, while Reuters estimates a 3.7% decrease, and Barclays predicts a staggering 11% decline. If Tesla does report another downturn this week, it would be the first time since 2012 that the company has experienced two consecutive quarters of falling deliveries, coinciding with the production end of the Tesla Roadster.
In July of last year, Tesla reported delivering 466,000 out of 480,000 vehicles produced in that quarter. FactSet estimates that this quarter’s deliveries will drop to 436,000— a reduction of 14,000 vehicles from just a week ago and approximately 28,000 below initial projections. Additionally, Tesla’s stock has dropped substantially throughout the first quarter of 2024.
Currently, Musk appears to lack a positive narrative to reassure shareholders about an imminent turnaround. While Tesla has a backlog of Cybertruck reservations, the prospects for the anticipated $25,000 “Model 2” have stalled, and the existing vehicle lineup is aging against stiff competition from both traditional automakers and new entrants like Rivian. Moreover, general interest in electric vehicles has plateaued.
Adding to the challenges, Tesla’s latest and most eagerly awaited product has faced monthly recalls for concerning issues as the company scales up production. This situation paints a bleak picture for America’s electric vehicle frontrunner, and the state of affairs in China has not even been addressed yet. Tesla is expected to reveal its quarterly earnings tomorrow, July 2.
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