Tesla shares fell on Tuesday after the company reported a drop in vehicle deliveries in the first quarter, the first annual decline since 2020, when the global pandemic disrupted production, CNBC reported.

Tesla’s Q1 2024 delivery tally was 386,810 cars and it produced 433,371. According to CNBC, production declined around 1.7% year on year and 12.5% sequentially, not as steeply as the 8.5% annual drop in deliveries.

Tesla reportedly said it produced 412,376 Model 3/Y cars and delivered 369,783. It produced 20,995 of its other models and delivered 17,027.

According to CNBC, the automaker reported 422,875 deliveries and production of 440,808 vehicles in Q1 2023. In Q4 2023, it reported 484,507 deliveries and production of 494,989 units.

The report noted Q1 2024 deliveries fell far below even the most pessimistic of analysts’ expectations.

According to a mean of 11 estimates, analysts were expecting deliveries of around 457,000 for the quarter. Estimates ranged from a high of 511,000 deliveries to a low of 414,000 for the first quarter, with estimates updated in March ranging from 414,000 to 469,000 deliveries, CNBC said.

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An independent auto industry researcher closely followed by Tesla fans had expected deliveries to come in at around 409,000, the report added.

The report said Tesla’s head of investor relations, Martin Viecha, had sent a company compiled consensus based on 30 analysts’ estimates over the weekend to selected investors. The consensus, seen by CNBC, said analysts were expecting a mean of 443,027 deliveries and a median of 431,125 deliveries for the quarter.

Tesla faced numerous challenges in the first quarter, the report noted.

Houthi militia attacks on shippers in the Red Sea disrupted component supply and temporarily suspended production at the German factory near Berlin in January. In March, environmental activists set fire to infrastructure near that same factory, depriving the plant of sufficient electricity and again causing a production halt.

Tesla reportedly said in a statement "decline in volumes was partially due to the early phase of the production ramp of the updated Model 3 at our Fremont [California] factory and factory shutdowns".

In China, the automaker faced strong competition from domestic EV makers, including BYD and newcomers such as the phone maker Xiaomi, CNBC said.

After slow sales of its China made cars in January and February, Tesla reduced production of the Model 3 and Model Y at the Shanghai plant and slashed workers’ schedules to five days a week from 6½ days.

A series of discounts and incentives appeared to be less effective in driving sales volume than in the past for Tesla, CNBC said.

According to the report, Tesla shares dropped 29% in the first quarter, the biggest decline since the end of 2022 and the third steepest quarterly plunge since the company’s IPO in 2010. The stock closed down about 5% on Tuesday at US$166.63 per share, CNBC said.