The company, founded and run by eccentric billionaire Elon Musk, delivered 63,000 vehicles in the first three months of 2019, down by almost a third from the 91,000 it sold in the previous quarter.
It was the first quarter-on-quarter drop in sales for almost two years and the largest in the US$50bn firm’s history.
“Because of the lower than expected delivery volumes and several pricing adjustments, we expect Q1 net income to be negatively impacted,” read a statement on Wednesday night.
“Even so, we ended the quarter with sufficient cash on hand.”
Tesla said there were two main reasons for the sharp drop-off: firstly, it rushed to complete some sales at the end of 2018 so buyers could take advantage of tax breaks before they were cut.
Full-year guidance unchanged
Secondly, “a large number of vehicle deliveries” have been pushed back to the second quarter with almost 11,000 in transit to Europe and China.
International sales have proved to be something of a logistical challenge for Tesla, which currently makes all of its cars at one factory in San Francisco but has to ship them around the world.
Despite the issues, Tesla repeated its target of selling between 360,000 and 400,000 cars this year.
It wasn’t enough to stop the shares sliding though, with the stock down 8.6% to US$266.57 in New York.
Analysts noted that the sell-off could have been even greater had analysts not already lowered their expectations earlier in the year.
“The Street was expecting an apocalyptic quarter and Model 3 deliveries were better than feared by many,” said Wedbush analyst Dan Ives in an interview with Bloomberg.
US$1bn revenue miss?
“Tesla reported total 1Q19 deliveries of 63k, 31% below 4Q18 levels and versus RBC/FactSet consensus of 71.7k/76k,” said RBC in a note to clients.
“We believe the results are disappointing across the board and estimate that this could potentially translate into a ~US$1bn+ revenue miss.
“Tesla indicated 1Q19 net income would be negatively impacted but that they ended the quarter with “sufficient” cash on hand. We expect a sizeable cash burn in 1Q19.”
In London, Hargreaves Lansdown analyst Nicholas Hyett speculated that Tesla’s Model 3 is eating into sales of its higher-margin premium cars.
“Our concern is that demand for Tesla’s premium models has been permanently affected by the cut in subsidies in the US and that sales are being potentially cannibalised by the cheaper Model 3.
“With the US$35,000 Model 3 variant only just hitting the market, the potential for Tesla to undercut its own products is only growing.
“In theory, premium sales could be offset by high volume, low margin Model 3 sales, but Model 3 production has increased only slightly quarter-on-quarter – hardly the ramp-up in production some had been expecting."