Tesla's delivery volume worries Wall Street, with analysts predicting the first "bad news" in four years

Zhitong Finance APP noticed that as the demand for electric vehicles declines and interest rates rise, Tesla (TSLA.US) may be facing a disappointing milestone.

As the quarter comes to a close, analysts have quickly lowered their expectations for this week's delivery report. Some on Wall Street are even prepared for Tesla's first sales decline since the early days of the pandemic.

Analysts on average estimate that Tesla delivered 449,080 vehicles this quarter. This would represent a decrease of over 7% from the company's record performance in the fourth quarter, which is typically the best sales period of the year. The key is that the number of vehicles delivered will exceed the 422,875 in the first three months of 2023, avoiding the first year-on-year decline since the second quarter of 2020.

Elon Musk may not have been much help in the last week of March. Tesla announced a one-month free trial of Full Self-Driving (FSD) for U.S. customers. Musk stated that all U.S. Tesla vehicles with FSD capability can start a one-month trial this week, and he also required employees to install and demonstrate how to use the company's advanced driver assistance system FSD before delivering vehicles to customers.

The monthly subscription fee for FSD is $199, with a purchase cost of $12,000. This is one of several benefits the company offers to attract consumers, along with a $1,000 temporary discount and free charging. Tesla has also increased its advertising on the social media service X owned by Google and Musk.

In January of this year, Musk warned investors that Tesla is in between "two major growth waves." The first is driven by the Model 3 sedan and Model Y, and the next is the cheaper next-generation car expected to start production later next year.

With the introduction of the new generation of vehicles, some analysts are concerned that Tesla's expectation of "significant deceleration" in growth this year may actually translate into no growth in the first quarter.

Deutsche Bank analyst Emmanuel Rosner has lowered his delivery expectations twice in just over two weeks last month. He now expects the company's car sales this quarter to be around 414,000, a decrease of about 2% year-on-year Rosner wrote in a report on March 28th: "We believe that concerns about trading volume and returns may further dampen investor sentiment and put tremendous pressure on the stock." Tesla's stock price has fallen by 29% since the beginning of the year, making it the worst performer in the S&P 500 index.

The company has faced several setbacks this quarter, including multiple closures of its factory in Berlin. It has also made changes to its factory in California to produce an upgraded version of the Model 3, which often leads to lower production.

In China, Tesla is striving to catch up with BYD, which became the world's best-selling electric vehicle manufacturer at the end of last year. Sources revealed that the American automaker instructed its Shanghai factory employees last month to work 5 days a week instead of the usual 6 and a half days to reduce production.

Last year, the Model 3 and Model Y accounted for 96% of Tesla's global deliveries. The company also produces the Model S sedan and the Model X SUV, and started selling the electric pickup truck Cybertruck at the end of last year, although specific sales figures for the Cybertruck have not been disclosed