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

Tesla raised fresh questions about its command of the market for electric cars, and the leadership of the company by Elon Musk, after it reported a surprising drop in car sales during the first three months of the year while other automakers gained ground.

The company said it delivered 387,000 cars worldwide in the first quarter, down 8.5 percent from 423,000 vehicles in the same period last year. This was the first time Tesla’s quarterly sales have fallen on a year over year basis since the pandemic started in 2020. The sales figures were also significantly lower than the estimates of Wall Street analysts who had expected a modest increase.

The reduced deliveries are the latest sign that Tesla’s dominance of the market for electric cars is slipping. The company’s shares have fallen more than 30 percent this year — including a steep drop on Tuesday — because investors are concerned that the company is not doing enough to respond to intensifying competition.

In China, Tesla faces BYD and dozens of other rivals with ambitions to expand worldwide. In Europe, established carmakers like Volkswagen and BMW have introduced more compelling battery-powered models. And in the United States, sales of electric cars are not growing as fast as they were a year ago.

Tesla rivals have continued to report sales increases. BYD said on Tuesday that it sold about 300,000 electric vehicles, up 13 percent from the same period a year earlier. The company also sold 324,000 plug-in hybrid vehicles in the first quarter, up 15 percent from last year.

BYD and other Chinese automakers have introduced new models rapidly, often undercutting Tesla on price. Those companies are also competing with Tesla in markets other than China by exporting more cars to Europe, Southeast Asia and Latin America.

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