Tesla’s Sales Drop, a Sign That Its Grip on the E.V. Market Is Slipping

Tesla raised contemporary questions on its command of the marketplace for electrical vehicles, and the management of the corporate by Elon Musk, after it reported a shocking drop in automotive gross sales in the course of the first three months of the yr whereas different automakers gained floor.

The firm mentioned it delivered 387,000 vehicles worldwide within the first quarter, down 8.5 p.c from 423,000 autos in the identical interval final yr. This was the primary time Tesla’s quarterly gross sales have fallen on a yr over yr foundation for the reason that pandemic began in 2020. The gross sales figures have been additionally considerably decrease than the estimates of Wall Street analysts who had anticipated a modest improve.

The lowered deliveries are the most recent signal that Tesla’s dominance of the marketplace for electrical vehicles is slipping. The firm’s shares have fallen greater than 30 p.c this yr — together with a steep drop on Tuesday — as a result of buyers are involved that the corporate shouldn’t be doing sufficient to reply to intensifying competitors.

In China, Tesla faces BYD and dozens of different rivals with ambitions to develop worldwide. In Europe, established carmakers like Volkswagen and BMW have launched extra compelling battery-powered fashions. And within the United States, gross sales of electrical vehicles aren’t rising as quick as they have been a yr in the past.

Tesla rivals have continued to report gross sales will increase. BYD mentioned on Tuesday that it bought about 300,000 electrical autos, up 13 p.c from the identical interval a yr earlier. The firm additionally bought 324,000 plug-in hybrid autos within the first quarter, up 15 p.c from final yr.

BYD and different Chinese automakers have launched new fashions quickly, typically undercutting Tesla on worth. Those corporations are additionally competing with Tesla in markets aside from China by exporting extra vehicles to Europe, Southeast Asia and Latin America.

Kia, primarily based in South Korea, mentioned Tuesday that its gross sales of electrical autos within the United States greater than doubled within the first three months of the yr in contrast with a yr earlier after it launched a brand new giant sport-utility car, the EV9.

Tesla pioneered mass-market electrical vehicles, however its lineup is getting old. Tesla’s solely utterly new mannequin since 2020 is the Cybertruck, a futuristic pickup that went on sale in restricted numbers final yr. The least costly model that Tesla says it might probably ship this yr begins at round $80,000, limiting its attraction to prosperous early adopters.

Rivian, whose R1 pickup competes with the Cybertruck, mentioned its gross sales, together with of the truck and its two different fashions, rose 70 p.c within the quarter, to 13,600 autos.

Tesla is engaged on an electrical automotive that may value round $25,000, however the mannequin shouldn’t be anticipated to go on sale in giant numbers till 2026. In the meantime, Tesla stays depending on the Model Y S.U.V. and the Model 3 sedan for many of its gross sales.

The firm has repeatedly lower costs, however analysts say the technique has lowered its income with out doing sufficient to stimulate gross sales. The firm has just lately modestly raised the costs of some vehicles within the United States and China. The Model Y begins at almost $45,000 earlier than federal and state tax breaks, after a rise of $1,000 introduced this week.

The quarterly gross sales determine exhibits Tesla managers “they need a real sales strategy and can’t rely on cutting price alone,” Gary Black, managing accomplice of the Future Fund, an funding agency, posted on X.

Mr. Musk, Tesla’s chief government, has not given a transparent indication of how the corporate plans to regain momentum. At the identical time, his polarizing statements and endorsement of right-wing conspiracy theories have alienated lots of the left-leaning prospects who’re almost definitely to purchase electrical vehicles.

Raphaelle Cassens, a Los Angeles resident, gave up her leased Tesla Model Y final yr and changed it with a leased electrical BMW i4. Mr. Musk was one motive she switched, she mentioned.

“Honestly, I don’t like him as an individual at all,” mentioned Ms. Cassens, who’s a registered Democrat however described herself as nonpartisan. She additionally mentioned that she obtained poor service from the corporate. “The attitude from the company definitely reflects the owner,” Ms. Cassens added.

Tesla’s inventory was down about 5 p.c on Tuesday morning.