Tesla had one of its worst sales quarters in years

Tesla $TSLA -5.42% delivered 50,363 fewer vehicles than it produced in the first quarter of 2026, missing Wall Street expectations and widening the gap between production and sales.

Tesla shipped 358,023 vehicles against a production total of 408,386 — well below analyst forecasts of around 370,000 and Tesla’s own internal expectations. The results weighed on Tesla’s stock in early trading Thursday, sending it down roughly 4%.

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Together, the Model 3 and Model Y made up 341,893 of the quarter’s deliveries. The remaining balance of units came from Tesla’s other vehicle lines. While deliveries increased 6% on an annual basis, the comparison flatters. The prior-year quarter had itself contracted 13% versus Q1 2024.

Energy storage deployment was softer this quarter, coming in at 8.8 gigawatt hours. That’s a meaningful step down from the 14.2 GWh record the prior quarter and the 10.4 GWh Tesla managed in Q1 2025.

The production-to-delivery gap suggests a buildup of inventory on Tesla’s books. Delivery figures are the closest public measure of Tesla’s sales.

Tesla’s car lineup has narrowed further heading into 2026. CEO Elon Musk said the company is winding down manufacturing of the Model S and Model X $TWTR 0.00%, its long-running premium sedans and SUVs, which represented a sliver of overall volume. Last year, when Tesla’s total came to roughly 1.64 million vehicles, the 3 and Y drove 97% of volume.

Thursday’s results arrive as Tesla navigates a crowded global EV market, the expiration of a federal $7,500 plug-in vehicle tax credit, and public criticism over Musk’s political profile and work in the Trump administration.

Tesla’s fourth-quarter 2025 earnings, reported in January, showed net income falling 61% from a year earlier, automotive revenue sliding 11%, and total deliveries declining by double digits, making 2025 the company’s most difficult year in some time and its first with an annual revenue decline. Energy storage was a rare bright spot, with revenue rising 25% to $3.84 billion and storage deployments hitting a record. Musk used that earnings call to pivot investor attention toward robotaxis, Optimus humanoid robots, and artificial intelligence.

Tesla is scheduled to report full first-quarter 2026 financial results after market close on April 22.

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