Why are Tesla shares falling despite breaking sales records?

During the first quarter of the year, Tesla delivered more than 400,000 cars worldwide, but that hasn’t sent the stock soaring. Quite the opposite. Tesla is the great enemy to beat. The Americans have been the reference in the electric car market for years and their advantage is far from shortening. Each quarter is better than the last. Deliveries grow and grow with no visible ceiling in sight. The first quarter of 2023 has left excellent results in the company’s accounts. The new delivery record should be more than a justified reason to encourage the markets, but investors are concerned about the margins of the Elon Musk company. The shares, far from rising, have fallen despite the records.

The next phase of Musk’s Master Plan is to take vehicle production to a new scale. With the Tesla Model 3 and Model Y pulling the bandwagon internationally, the year 2023 has started at a record pace. In the first three months of the year, Tesla has produced a total of 440,808 cars, of which it has delivered more than 422,000 worldwide. Whichever way you look at it, that’s a record and no other model or company is close to seeing those records, at least for now.


Since the beginning of the year, Tesla has established a price war in the electricity market. After repeated increases in 2022, the company’s new strategy is to significantly lower rates to continue gaining an advantage over rivals. This has led to a boom in sales and better projections for an outrageously good 2023. Elon Musk himself acknowledged that this year the two million units delivered to customers will be exceeded.

The figures do not convince everyone

The goal is difficult, but not unattainable. However, analysts are raising serious questions about how Tesla expects to reach such a goal based on first-quarter numbers. At that rate, it would reach 1.7 million vehicles, although we must reckon with the company’s traditional push at the end of the year. Despite being very good figures, they barely represent 4% more volume, and all this after carrying out an aggressive pricing strategy. Investors worry about profit margins. “Tesla’s price cuts are having the desired effect for now, but there is a limit to the number of times prices can be cut,” Sophie Lund-Yates, an equity analyst at Hargreaves Lansdown, told Reuters.

That uncertainty is rocking the markets. Tesla shares have fallen 7% in just one day. Last week the titles increased in value by 9% in line with expectations, but everyone expected the records to be better. The international scene is not helping Musk’s company either. The problems in the supply chain continue to affect the volume of work in the factories, although it must also be recognized that Tesla has been able to overcome the problem with great ease. However, with the issues still unresolved, competition between brands is the order of the day. The uncertainty is maximum and that has also caused investors to be suspicious.

2023 will be a fairly light year in terms of presentations by Tesla. In the last press conference, to discuss the results of the previous year, everyone expected a big corporate announcement. More specifically the plans and details of the highly anticipated Tesla Model 2, the reasonably priced compact that is destined to conquer the world. However, far from giving specific details, Elon Musk and his team just offered a couple of general ideas that did not satisfy anyone. Tesla is still going strong, but its responsiveness is in question and the stock price is the leading indicator.

Lynda Reeder

I'm Lynda, I currently own Tesla. I write about electric cars. My aim is to provide information on how technology can improve the ownership experience of electric vehicles.

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