Tesla, Inc. stock took a hit Tuesday as the electric vehicle maker posted sales numbers showing their first year-over-year quarterly decline since 2020. As of this writing, the stock is down five percent for the day, and it's tumbled 34 percent over the last six months.

The sales drop comes amidst increasing competition and a lowered customer appetite for EVs.

The Austin, Texas, company said Tuesday that it delivered 386,810 vehicles worldwide from January through March, almost 9% below the 423,000 it sold in the same quarter of last year. It was the first year-over-year quarterly sales decline in nearly four years.

Sales also fell short of even the most bearish Wall Street expectations. Auto industry analysts polled by FactSet were looking for 457,000 vehicle deliveries from Tesla Inc. That's a shortfall of more than 15%.

Tesla stock continues to get HAMMERED...

Lower than expected deliveries.

Is this a problem with Tesla?
The car market?
The EV Market?

Or is it all 3? pic.twitter.com/uhCxwHiowt

— Brandon | Car Questions Answered (@CQA_Brandon) April 2, 2024

As we’ve reported, the EV market has seen some tough times lately:

Ford Slashes Electric Vehicle Jobs As Democrats' Dreams of an EV Utopia Short Circuit

Electric Vehicle Maker Fisker Delisted by NYSE Due to 'Abnormally Low' Price Levels

'EV Euphoria Is Dead': CNBC Declares Transition to Electric Vehicles Has Failed

As Joe Biden and governors like California’s Gavin Newsom try to shove electric cars down our throats, it’s become increasingly clear that the general public isn’t eager to jump aboard just yet. They’re expensive, can fail in cold weather, and aren’t good for people who drive long distances because they need recharging. For certain people, they’re perfect for their lifestyle, but for others, they are definitely not ready for prime time.

The news didn’t come as a huge surprise for Tesla, as the company predicted it in a January letter to investors:

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

In its letter to investors in January, Tesla predicted “notably lower” sales growth this year. The letter said Tesla is between two big growth waves, one from global expansion of the Models 3 and Y, and a second coming from the Model 2, a new, smaller and less expensive vehicle with an unknown release date.

Even though a sales drop wasn’t entirely unexpected, the final numbers nevertheless stunned analysts:

“This was an unmitigated disaster 1Q that is hard to explain away,” wrote Dan Ives, an analyst with Wedbush that has been very bullish on Tesla's stock. The drop in sales was far worse than expected, he said in a note to investors.

This certainly isn’t a death knell for the company, and CEO Elon Musk could turn things around over the long term—he's worked magic before. For the short term, however, it’s yet another sign that the EV product is still not where it needs to be for the public at large to willingly adopt electric cars. 

See also:

'We Got a Bunch of Dead Robots Out Here'—Tesla Charging Stations Freeze in Chicago