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Tesla Deliveries Fell 8.5% in Q1 2024; Company Cited Red Sea Disruptions and Germany Outage

Tesla blamed several production and supply disruptions for part of its Q1 2024 delivery decline, but did not quantify each factor’s effect.
From TheFinanceBase Team3 min to read
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Tesla delivered 386,810 vehicles worldwide in the first quarter of 2024, about 8.5% fewer than the 423,000 delivered in the same quarter a year earlier. Tesla attributed part of the decline to an updated Model 3 production ramp, Red Sea shipping diversions and a power outage at its German factory. The company did not quantify how much each factor contributed, so the available figures do not show that the Houthi attacks or the German arson investigation alone caused the drop.

How much did Tesla deliveries fall?

Tesla reported 386,810 deliveries in Q1 2024, compared with 423,000 in Q1 2023—an approximately 8.5% year-over-year decrease. The Associated Press described the drop as almost 9%. The AP report and The National’s report published the figures on April 2, 2024.

Deliveries are not the same as production. Tesla produced 433,371 vehicles during the quarter, 46,561 more than it delivered, according to The National. The gap is a difference between the reported production and delivery totals; it does not, by itself, establish why vehicles were not delivered in that quarter.

What factors did Tesla cite?

Tesla’s explanation identified several operational pressures, rather than assigning a measured share of the delivery decline to any one event. The company cited the Model 3 ramp at Fremont, Red Sea-related shipping diversions and the March outage at Gigafactory Berlin. AP and The National reported the factors alongside the Q1 results.

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Updated Model 3 production ramp at Fremont

Tesla said the ramp of the updated Model 3 at its Fremont factory was among the factors affecting the quarter. A production ramp involves bringing manufacturing of a new or updated vehicle configuration up to volume; Tesla’s reported explanation did not state how many deliveries this factor affected.

Red Sea diversions and component delays

In January, Tesla said conflict in the Red Sea and rerouted shipping between Europe and Asia via the Cape of Good Hope were affecting production at its Grünheide factory. The company told Reuters that longer transit times were creating a gap in component supply. Reuters reported on January 12, 2024, that Tesla planned to suspend most production there from January 29 through February 11 because of the supply disruption.

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These shipping problems predated the March factory outage. They provide a mechanism Tesla identified for production interruption—longer routes and delayed components—but Reuters’ report about the January pause is not a calculation of how many Q1 deliveries were lost to it.

March power outage at Gigafactory Berlin

On March 5, a fire at an electricity pylon near the factory cut power and halted production at Tesla’s European plant near Berlin. The fire did not spread to the plant itself. Police investigated suspected arson, as Reuters reported that day.

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On March 8, Germany’s federal prosecutor took over the investigation. Reuters reported that the prosecutor cited an initial suspicion of conspiracy to commit acts of terrorism, anti-constitutional sabotage and conspiracy to commit arson. Those were stated suspicions at that stage of the investigation, not a finding of guilt or a final legal conclusion. Reuters’ March 8 report describes the investigation.

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Did Houthi attacks and arson cause the whole sales decline?

The reports support saying that Tesla cited these disruptions as contributing factors. They do not establish that the Houthi attacks or suspected arson alone caused the decline, or provide a comparable estimate of the effect of each disruption. The January shipping pause, Fremont production ramp and March outage affected different parts of operations; the company did not publish a causal breakdown separating their impact on deliveries.

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AP also situated the result in a wider market context, including growing competition, slower growth in electric-vehicle demand and price cuts that had not brought in more buyers. These are contextual pressures reported by AP, not a quantified explanation of Tesla’s quarter. Read AP’s account of the Q1 results and market context.

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