US EV leader Tesla this week revealed its worst quarterly delivery results in nearly four years, and blamed three supply-side factors which it said constrained its Q1 performance.
Analysts, however, are sceptical of the automaker's explanation of the downturn, pointing to a perhaps more worrying thread beneath the underperformance: demand issues.
"Decline in volumes was partially due to the early phase of the production ramp of the updated Model 3 at our Fremont factory and factory shutdowns resulting from shipping diversions caused by the Red Sea conflict and an arson attack at Gigafactory Berlin," the automaker explained in its Q1 sales release.
But analysts are unconvinced that Tesla's disappointing first quarter can be reduced to supply-side issues.
"One of the three reasons lines up to me with having an impact on deliveries," says Gene Munster, director of Deepwater Asset Management.
"Keep in mind that production was better than expected," Munster says, whereas deliveries missed analyst consensus by around 11pc.
Munster's view of demand issues for Tesla does not stop him seeing Q1 as a short-term "bump in the road". But while Guggenheim Securities lead automotive analyst Ronald Jewsikow agrees that demand issues are behind the Q1 slump, he also believes this could have more serious mid-to-long-term consequences. Tesla's issues are "mostly a function of demand", he argues.
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"There obviously were some supply issues, we think, on the Model 3 in the US, but most of the downside this quarter relative to year-over-year and the fourth quarter of last year was driven by demand," Jewsikow says
And his scepticism around Tesla's supply side explanations for its Q1 downturn has lead to Guggenheim reiterating its Sell rating and downgrading its Tesla share price target to $122, from $132.
With the exception of the Cybertruck, Tesla currently has an ageing product range, with only minor improvements made on a recent Model 3 variant providing impetus for consumers to buy. The company's next-gen compact vehicle may not arrive until 2026.
And while Tesla does not split out its sales by region, Jewsikow says that "we think US volumes were down somewhere in the range of 20pc-25pc."
But the US market is not the only one presenting problems for the automaker, Jewsikow says. As well as a densely populated Chinese market, Jewsikow suggests that "Europe really has not grown for five quarter now for Tesla". The US firm was outsold in BEVs by VW Group in the UK in the first quarter, according to data from consultancy New Automtive, and also lags the German firm in Jan-Feb all-electric sales in VW's home market of Germany.
"There are emerging risks in all three regions, that even as we move beyond a very messy first quarter earnings result, there is reason to be concerned for the structural mid-term and long-term," Jewsikow says.
And these demand worries and an increasing inventory for the automaker leads Jewsikow to question why Tesla might be pursuing a rumoured new multibillion dollar gigafactory in India.
"Tesla's supply is already exceeding demand, so once you add Giga Mexico onto that, supply is still going to exceed demand, so I am not really sure why Tesla needs another factory in the medium-term," he says. "I would be surprised by anything in the near term about a factory in India actually becoming more concrete."
Ciaran has written about finance, politics and culture. He is passionate about e-mobility and what it means for our way of life.
Ciaran has a Masters in Ancient Philosophy from Oxford University.
