Tesla shares dipped Tuesday after the electric car company revealed that it had missed first-quarter delivery estimates. 

Tesla sold just under 387,000 vehicles in the first quarter, down 20% from the prior quarter and 8.5% from the previous year. It was the company’s first year-over-year sales drop since the early days of the COVID-19 pandemic in early 2020.

The final count falls short of Wall Street’s expectations for 457,000 deliveries, according to an average based on 11 analysts’ forecasts provided by FactSet.  

While analysts had been expecting a bad first quarter from the company, the figures were "an unmitigated disaster” that is “hard to explain away," according to a Tuesday note from Wedbush analyst Dan Ives.

“We view this as a seminal moment in the Tesla story,” Ives said in his note, adding that “some darker days could clearly be ahead that could disrupt the long-term Tesla narrative.”

Tesla shares closed down 4.9% at $166.63 Tuesday.

What are the delivery numbers?

According to a Tuesday press release:

• Tesla produced 412,376 Model 3 and Model Y vehicles and 20,995 other models in the first quarter for a total of 433,371 vehicles.  
• Tesla delivered 369,783 Model 3 and Model Y vehicles and 17,027 other models in the first quarter for a total of 386,810 deliveries.

EV tax credit:Which EVs qualify for a $7,500 tax credit in 2024? See the updated list.

Why are Tesla deliveries down?

The EV company blamed the decline on the early phases of a production ramp up for the updated Model 3, as well as factory shutdowns caused by the Red Sea conflict and an arson attack at a Berlin factory. 

Consumer sentiment may also play a role. Reuters on Monday reported that a recent survey by market intelligence firm Caliber found the number of would-be Tesla buyers in the U.S. is shrinking in part because of CEO Elon Musk’s polarizing persona.

The billionaire – who is active on X, the social media company he purchased in 2022 for $44 billion – has come under fire for various posts on the platform. In November, the White House condemned Musk for amplifying an antisemitic post. Musk has denied being antisemitic. 

A slowdown in consumer EV demand is another headwind, as well as rising competition.

Despite missing estimates, Tesla sold enough vehicles in the first quarter to reclaim the title of world’s largest EV seller from BYD Co., a Chinese automaker that also saw sales decline in the first quarter.