Tesla faces a setback with its lowest delivery figures since 2022.

In the initial quarter of the year, Tesla, led by Elon Musk, experienced a significant decline in deliveries, attributed to a range of challenges, including a fire at its European factory and disruptions in global shipping.

The company delivered just under 387,000 electric vehicles to customers during the quarter, marking its lowest quarterly figure in over a year. This represented a decrease of more than 8% compared to the previous year and fell short of analysts’ expectations, causing shares to plummet by over 4%.

Wedbush Securities analyst Dan Ives characterized the update as an “unmitigated disaster” that is difficult to justify. Tesla’s shares had already experienced declines over the past year, reflecting challenges such as increased interest rates impacting affordability and intensified competition from other electric vehicle manufacturers.

In response, the company has repeatedly slashed prices, yet demand in critical markets like China has waned, with competitors like BYD gaining ground.

Tesla encountered further challenges in the initial three months of this year. Supply disruptions resulting from Houthi attacks in the Red Sea led to temporary shutdowns at its German factory, which was subsequently targeted by an alleged arson attack.

Mr. Ives characterized the figures as indicative of a “train wreck into a brick wall” for the company, heightening pressure on Mr. Musk. He emphasized the critical juncture Tesla finds itself in, asserting that navigating through this turbulent period is essential to avoid potential difficulties ahead.

The company reported a 1.6% year-on-year decline in production during the first quarter, with output decreasing from 439,701 cars in 2023 to 433,371 in the corresponding period this year. However, deliveries experienced a more pronounced drop, falling by over 8% compared to the previous year.

This marked the first annual decline for any quarter since 2020, with deliveries plunging by 20% compared to the final quarter of 2023.

The decline coincides with car manufacturers across the industry scaling back their electric vehicle ambitions due to warnings of weaker-than-expected demand. Nevertheless, most analysts still anticipate significant growth in electric vehicle sales for the year.

Tesla has encountered its own set of challenges.

Issues have arisen with its autonomous driving software, which the company has touted as a catalyst for future growth. Additionally, safety authorities have been investigating concerns regarding Tesla’s power steering and other components.

Furthermore, a former Tesla employee has raised doubts about the safety of the company’s vehicles. Concurrently, certain investors have expressed worries that Tesla’s product lineup has become stale, as CEO Elon Musk’s attention has been divided, including his involvement with his social media venture X (formerly Twitter). Musk’s decisions and online activity have sparked controversies, thereby tarnishing the Tesla brand.