The electric vehicle industry leader, Tesla, Inc. reported a decrease in first-quarter deliveries, causing its stock to drop in premarket trading.

In the first quarter, Tesla delivered a total of 386,810 vehicles, a decrease from the 422,875 vehicles delivered during the same period last year. The company also reported a drop in production numbers, with 433,371 units produced this quarter compared to 440,808 units in the same quarter last year. This is the first time Tesla has seen a year-over-year decline in deliveries since the pandemic-affected year of 2020.

The company’s performance fell below analyst expectations. The median consensus estimate compiled by the company and shared by Future Fund’s Gary Black was 431,000 units. Independent Tesla observer Troy Teslike, previously on Twitter, estimated first-quarter production and sales to be 409,000 units and 429,954 units, respectively.

The company stated that the decrease in volumes was partially due to the initial phase of the production ramp-up of the updated Model 3 at their Fremont factory, and factory shutdowns caused by shipping diversions due to the Red Sea conflict and an arson attack at the Gigafactory in Berlin.

Despite the decline, Tesla managed to reclaim its position as the world’s leading battery electric vehicle manufacturer by volume, after being briefly surpassed by Warren Buffett-backed BYD Company Limited in the fourth quarter of 2023. Meanwhile, competitor Rivian Automotive, Inc. reported first-quarter deliveries of 13,588 EVs and confirmed its 2024 production target of 57,000 units.

Tesla’s strategy of price reductions in China and globally did not significantly increase sales volume as competitors, especially in China, matched the price cuts, thus limiting their effect. Analysts also pointed out a decrease in demand in Europe and potential supply disruptions in the U.S. due to the Model 3 refresh and a temporary shutdown of the Giga Berlin factory.

Tesla’s vehicle lineup includes the more affordable Model Y and Model 3, the premium Model S and X, and the Tesla Semi and Cybertruck. However, the company did not disclose the exact number of Cybertrucks produced and delivered, leading to speculation about the vehicle’s potential impact on the market.

Looking ahead, Tesla’s first-quarter earnings report, scheduled for April 23, is the next significant event for investors. Analysts predict earnings per share of 60 cents on a revenue of $24.07 billion, a decrease from 85 cents and $23.33 billion a year ago. These estimates may be adjusted after the delivery figures are released.

Investors will likely be interested in updates on a sub-$30,000 electric vehicle and the progress of the Full Self-Driving (FSD) software rollout during the earnings call.