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Tesla blames sales drop on Houthi attacks and arson in Germany

Tesla just reported its most disappointing first-quarter deliveries in some time, with the company blaming part of the blame on arson attacks on its German factory and shipping disruptions caused by Houthi attacks on the Red Sea.

Tesla said on Tuesday it delivered 386,810 vehicles in the first quarter of 2024, down 20% from the 484,507 vehicles delivered in the fourth quarter of 2023. Crucially, Tesla sold fewer cars than it did in the first quarter of 2023, meaning it was the first year-over-year sales decline in three years.

Production was also down year over year, which Tesla attributed to the shift to production of the new Model 3, as well as other disruptions. The company’s shares fell more than 6% in early trading.

Just two months ago, Tesla warned that sales growth in 2024 could be “significantly lower” following the company’s success in 2023, driven by price cuts. The company claimed in January that it was “between two major growth waves” as it tried to ramp up Cybertruck production. The company is also working on a lower-cost electric car, but that plan has changed and the company said it is trying to create an entirely new manufacturing process to reduce costs.

Tesla, as usual, tried to take some steps toward the end of the quarter to boost sales. The company has launched a month-long free trial of its advanced driver-assistance software, which it calls Full Self-Driving, although it doesn’t make the car drive itself. The company also spent much of March revealing that it would be raising prices starting April 1.

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