Tesla reported 358,023 vehicle deliveries in the first quarter of 2026, down 14% from the previous quarter but up 6% year-over-year. The results fell short of analyst expectations, which ranged from 365,645 to 372,160 deliveries, sending shares down over 4%. This marks Tesla's second consecutive year of declining annual deliveries, with 1.64 million vehicles delivered in 2025, down from 1.79 million in 2024.
The decline reflects broader challenges in the electric vehicle (EV) market, including the expiry of a $7,500 U.S. tax credit in September 2025, which analysts say has dampened demand. Tesla's Model 3 and Model Y accounted for 97% of deliveries in 2025, as the company phases out its Model S and X to focus on robotics and autonomous taxis.
While Tesla's China-made EV sales rose 23.5% year-over-year, Europe remains a weak spot amid intensifying competition from legacy automakers and Chinese brands. Analysts warn of a potential third straight annual decline in 2026, with BYD overtaking Tesla as the world's largest EV seller.
Tesla's shares have been volatile as investors weigh its shift toward AI, robotics, and autonomous vehicles against near-term auto sales pressures. The company produced 408,386 vehicles in Q1, suggesting inventory buildup. Analysts remain divided on whether the pivot will offset slowing EV demand.