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Tesla Stocks Take A Hefty plunge as Company reports 8.5% drop in deliveries
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Tesla stock owners have stumbled upon their first major setback in the ongoing financial year, with the company's stocks falling by as much as 7 per cent on Tuesday. The heavy plunge in stock prices came after the automobile company reported a drop in vehicle deliveries during the first quarter of 2024. Tesla's shares stood at $166.63 at the close of market on Tuesday, down by 4.9%.
In a statement released by Tesla, they revealed that they had produced approximately 433,000 vehicles but could only deliver around 387,000, which meant an annual drop of 8.5%. Not only did the number of deliveries reduce in 2024, but even the production of vehicles took a slight hit and fell by a margin of 1.7 per cent. The fall in sales for Tesla was the first since the Covid-19 pandemic hit the world in 2020.
Tesla records an underwhelming first quarter in 2024
The electric automotive company released an official press release to confirm the figures of production and deliveries, following which the stock prices took a hit. In that report, Tesla attributed its decreased production to several factors, which included factory shutdowns and an arson attack at a factory. "Decline in volumes was partially due to the early phase of the production ramp of the updated Model 3 at our Fremont factory and factory shutdowns resulting from shipping diversions caused by the Red Sea conflict and an arson attack at Gigafactory Berlin," the official press release from Tesla read.
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Tesla has had a difficult couple of months doing business in China, as it faced stiff competition from the country's domestic car manufacturers in the form of BYD and even Xiaomi, who recently forayed into the automobile industry. The company responded to these struggling times in the Asian country by reducing the production of Model 3 and Model Y cars in the Shanghai factory. It has also reduced the shifts of workers in the country to five days a week, from the initial six-and-a-half-day work week.
Apart from China, Tesla has had its fair share of struggles in the United States, with the brand's latest model launched in November 2023, the Cybertruck failing to garner rave customer reviews with safety concerns raised due to its unique design. However, Tesla CEO, Elon Musk has backed the Cybertruck claiming it to be safer than normal trucks.
The automobile company is all set to publish their financial reports for the first quarter later this month on the 23rd of April, which will provide a far clearer image of their performance. The company even clarified that speculations regarding their performance should not be made only on the reduced number of vehicle deliveries or storage deployments since it only forms a small portion of their revenue stream.
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