Tesla is set to report a decline in first-quarter deliveries while ending Model S and Model X production. The move signals slowing demand and a shift in strategy. The company will release its delivery figures before markets open.
Analysts estimate that 368,900 vehicles will be delivered during the January to March period, which represents a decline of almost 12 percent from the previous quarter. Yearly deliveries are expected to increase by 9.6 percent, which indicates that market growth will happen at different rates across various regions.
Another set of projections places deliveries slightly lower at around 365,000 units. The European market and Chinese market continue to experience weak demand, while the conclusion of the $7,500 federal EV tax credit in the United States still impacts consumer purchasing habits.
CEO Elon Musk confirmed that Tesla has stopped producing new units of the Model S sedan and Model X SUV, closing a major chapter in its product lineup.
Both models helped shape Tesla’s early growth after launching in 2012 and 2015. The company has removed new orders from its website and now offers only a limited number of vehicles from existing inventory.
Musk described the move as “bittersweet” and said Tesla will hold an official send-off. The models now contribute a small share of total sales, leading the company to shift focus toward newer and scalable products.
Tesla is looking at new areas of growth beyond traditional electric cars. This includes the development of autonomous driving technology, robotaxis, solar energy, and the company’s humanoid robot called Optimus.
Wall Street predicts that Tesla will produce 1.7 million vehicles during the current year. However, the company’s sentiment has weakened in the last few months due to concerns of slower growth rates due to demand pressures.
Also Read: Tesla Shares Drop on Soft Q1 Delivery Forecast and California Robotaxi Doubts
The electric vehicle market presents Tesla with increased competition from competitors and government regulations because of decreased consumer demand. The company plans to decrease its traditional vehicle production while it pursues research into advanced technology development to maintain its market leadership position.
The shift towards more automation and robotics is more of a shift towards becoming more of a technology-driven company rather than an electric vehicle company.