Tesla’s Q1 deliveries were down 13% to 336,681 vehicles, while their Q1 energy deployment went up 160% to 10.4 GWh. Matt Britzman, senior equity analyst at Hargreaves Lansdown, has shared his thoughts.
There’s no way to sugarcoat it, Tesla’s first-quarter delivery numbers are a disappointment, though many investors were already preparing for a soft number. A drop from last year is no surprise, but the scale is worse than many had expected. On a positive note, high-margin energy deployment was very strong, and that should help to balance out the earnings impact of the delivery disappointment.
Headlines will point to branding issues, and it’d be naive to assume that’s not a factor here, but it misses the key point. Deliveries have been significantly impacted by downtime at factories as Tesla launched the long-awaited refreshed version of the Model Y, its best-selling car. If reviews are anything to go by, the new Model Y should be a major hit, and with it coming in as China’s best-selling car in March, demand in this key market is clearly strong.
But in Western markets, simply having the best car doesn’t solve Tesla’s challenges. The brand is under pressure, and while it’ll take a few months to get clean year-on-year delivery comparisons to truly assess the damage, there’s clearly an underlying impact. It’s rare to see sentiment toward a company so closely tied to a polarising White House, and until Musk pulls his focus back to Tesla, shares will remain volatile.
That said, while volatility isn’t going away anytime soon, it’s making good progress behind the scenes on a host of longer-term growth drivers. Tesla still has a massive opportunity to monetise AI through real-world hardware, with autonomous driving and further down the line, robotics.
The author holds shares in Tesla.
