The first quarter of the year has not been kind to EV maker Tesla – the company reported a significant drop in vehicle deliveries for the three months ended March 2025, marking a 13% year-over-year decline as it faces challenges in both production and market demand.
The EV manufacturer delivered 336,681 vehicles during the January-March period, falling well short of analyst expectations, which ranged between 360,000 and 370,000. The company’s own internal estimates had set the consensus delivery figure at approximately 377,590, according to sources familiar with Tesla’s investor relations team. The performance triggered a decline in Tesla’s stock, which dropped 4% following the announcement.
“In the first quarter, we produced over 362,000 vehicles, delivered over 336,000 vehicles and deployed 10.4 GWh of energy storage products. While the changeover of Model Y lines across all four of our factories led to the loss of several weeks of production in Q1, the ramp of the New Model Y continues to go well. Thank you to all our customers, employees, suppliers, shareholders and supporters who helped us achieve these results,” the company announced in an official statement. The firm will later release its financial report for the month later this month, on April 22.
The decline in deliveries marks Tesla’s weakest performance since the second quarter of 2022. A year earlier, the company had delivered 386,810 vehicles and produced 433,371 units. And now, Tesla’s total production for the first quarter of 2025 stood at 362,615 vehicles. Tesla does not provide specific sales figures by region or model, but its first-quarter report revealed that 345,454 units of its popular Model 3 and Model Y were produced, with 323,800 of them being delivered. The company also reported 12,881 deliveries (as well as 17,161 units being produced) of its other models, including the highly anticipated Cybertruck.
Industry analysts have reacted strongly to Tesla’s underwhelming performance, with some calling it a defining moment for the company. Wedbush Securities analyst Dan Ives described the situation as a “fork in the road moment” for Tesla, emphasizing the severity of the shortfall. “We knew 1Q Tesla deliveries would be soft, but these numbers were bad,” Ives wrote on social media platform X. “We are not going to look at these numbers with rose-colored glasses… they were a disaster on every metric. Refresh issues but brand crisis key.”
One of the key factors impacting Tesla’s performance has been a series of planned factory shutdowns, which were necessary for the company to upgrade its production lines to accommodate a redesigned version of the Model Y SUV. While these upgrades are expected to improve manufacturing efficiency and enhance the product offering, they contributed to lower output in the short term. Tesla CEO Elon Musk remains optimistic about the vehicle’s future success, stating during a recent company-wide meeting that he expects the Model Y to be the “best-selling car on Earth again this year.”
Despite this optimism, Tesla faces intense competition from both established automakers and emerging EV manufacturers. The company is particularly feeling the pressure in China, where it competes with BYD and other domestic players. In March, Tesla’s sales of China-made vehicles fell 11.5% year-over-year to 78,828 units, reflecting the growing dominance of Chinese EV brands. Meanwhile, BYD reported a 58% increase in first-quarter deliveries of its battery-electric and plug-in hybrid vehicles. In addition to this, the firm’s market share dropped to 9.3% across 15 European countries, and in February, it reported yet another steep fall in EV sales in Europe (the 10th time in the last 12 months, dropping by 43% during January and February).
