First analyst reactions arrive as Tesla stock sinks on Q1 deliveries miss

Tesla (NASDAQ:TSLA) stock fell as much as 6% in early New York trading session Tuesday after Elon Musk’s electric vehicle (EV) company reported disappointing deliveries for the first quarter.

Tesla has reported a decline in quarterly vehicle deliveries for the first time in almost four years, signaling potential challenges ahead as the impact of its aggressive price cuts appears to diminish. 

This comes amid intensifying competition and a softening demand within the EV sector. Rivian (NASDAQ:RIVN) shares also fell today after the company presented worse-than-expected Q1 production numbers.

During the quarter ending March 31, Tesla delivered approximately 386,810 vehicles, marking a significant 20.2% reduction from the previous quarter and falling short of Wall Street's expectation of 454,200 vehicles based on the data compiled by Visible Alpha. 

This 8.5% decrease in deliveries compared to the same period last year is a notable setback for the world's most valuable automaker, recalling the last sales decline in the second quarter of 2020 amid COVID-19 pandemic-induced production halts.

Here are the first analyst reactions to this news.

Wedbush: “Let's call this as it is: While we were anticipating a bad 1Q, this was an unmitigated disaster 1Q that is hard to explain away. We view this as a seminal moment in the Tesla story for Musk to either turn this around and reverse the black eye 1Q performance. Otherwise, some darker days could clearly be ahead that could disrupt the long-term Tesla narrative.”

Oppenheimer: “We expect bearish investors to also point to inventory build in the quarter which amounts to 11 days based on 1Q24 deliveries as a signal of softening demand and a drag on ongoing GM. While that inventory build is not a large number, we believe directionally it will not be well-received as should be largely digested in 2Q24. We expect bulls to point to 2Q24 price increases and model transition supporting demand to signal 1Q24 as the bottom on deliveries and GM. We remain on the sidelines for now expecting shares to be weak into April 23 earnings.”