Why Tesla Stock Fell Monday

What happened

Tesla (NASDAQ: TSLA) released its first-quarter delivery data yesterday, and the stock is in decline as a result. The company delivered a record 422,875 electric vehicles (EVs) in the first quarter, but some investors were still disappointed. Shares were down by 5.2% as of 10:30 a.m. ET on Monday.

So what

In addition to record deliveries, the company produced a record number of EVs in the quarterly period. The stock is lower, however, as some investors must have thought the results were below estimates. High overall expectations had helped push the stock higher by about 8% over the last week heading into the delivery news.

Now what

There was a wide range of estimates for first-quarter deliveries after Tesla slashed vehicle prices. Some expected a surge in demand to help the company deliver more EVs than it did. Analyst estimates ranged from as low as 410,000 to about 450,000. So whether the company beat or missed expectations depends on which analysts you followed.

But overall production of nearly 441,000 would still leave the company slightly short of its own guidance for 1.8 million EVs for the full year if extrapolated to the remainder of the year. Investors who were disappointed may have missed two things, however.

Image source: Tesla.

First, the Semi heavy-truck production and delivery data was not included in the results. Perhaps more important, volume continues to ramp up at its two newest factories, in Texas and Germany. So extrapolating first-quarter production out to the rest of the year isn't really applicable if demand remains strong this year and those factories continue to increase production.

An area of concern last year was the growing gap between production and deliveries. Tesla followers wondered if that meant inventory was growing or if there were logistics problems. But that was a big bright spot in the first quarter. In the prior quarter, Tesla produced nearly 8% more vehicles than it delivered. But in the first quarter, that gap narrowed to just 4%.

So transit logistics certainly improved, and it also seems to confirm that there was not an inventory buildup due to declining demand. That's good news for shareholders and helps indicate that today's reaction in the market doesn't make much sense. Investors will get even more information when Tesla reports its full first-quarter financial results in less than three weeks on April 19.

Find out why Tesla is one of the 10 best stocks to buy now

Our award-winning analyst team has spent more than a decade beating the market. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

They just revealed their ten top stock picks for investors to buy right now. Tesla is on the list -- but there are nine others you may be overlooking.

Click here to get access to the full list!

*Stock Advisor returns as of March 8, 2023

Howard Smith has positions in Tesla. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.