Tesla’s cheaper vehicles aren’t helping its declining sales

Tesla spent much than a twelvemonth touting that “more affordable” cars were connected the way, and they finally arrived past October, with stripped-down versions of the Model Y and Model 3 starting astatine $39,990 and $36,990, respectively. But the caller vehicles are not moving the needle overmuch for Tesla’s wide sales, first-quarter figures show.

Tesla said Thursday that it delivered 358,023 EVs globally successful the archetypal 3 months of the year, beneath analysts’ expectations of of astir 368,000. The institution besides produced acold much than it sold, with the last tally built coming successful astatine 408,386.

This means Tesla lone delivered astir 6% much cars successful the archetypal 4th of this twelvemonth than it did successful Q1 2025, which was the company’s worst 4th successful years. The archetypal 4th 2025 figures were besides affected by the institution shutting down accumulation lines for a fewer weeks to power immoderate equipment, meaning Q1 2026 figures apt aren’t overmuch of a existent improvement.

The income figures are striking for a institution that erstwhile promised to turn EV income 50% each year. And the mediocre archetypal 4th means Tesla present risks seeing its wide income diminution for a 3rd twelvemonth successful a enactment — astatine a clip erstwhile its profits are besides tanking.

Tesla is not the lone institution struggling to turn EV sales, particularly successful the United States. Legacy automakers person backed distant from — and successful immoderate cases, outright canceled — once-grand plans and ambitions for caller EVs. Newcomers person struggled, too. Rivian announced Thursday greeting that it shipped conscionable implicit 10,000 vehicles successful the archetypal quarter, much oregon little the aforesaid fig it seems to study each quarter.

Rivian does person a caller exemplary waiting successful the wings, arsenic it is astir to commencement shipping its cheaper R2 SUV, which should boost sales. The institution is banking connected the R2 being hugely palmy retired of the gate, contempt the information that the cheapest mentation of it won’t get until precocious 2027.

Tesla doesn’t person a new, mass-market conveyance acceptable to go. The institution had been moving connected a overmuch lower-cost EV that was expected to beryllium priced astir $25,000. But CEO Elon Musk killed the project successful favour of going all-in connected the “CyberCab.” In spot of that $25,000 car, Musk alternatively had Tesla make the stripped-down Model Y and Model 3.

The lone genuinely caller exemplary Tesla has released implicit the past fewer years is the Cybertruck. While that outsells astir different all-electric trucks, it’s been a implicit flop successful the look of Tesla’s — and Musk’s — expectations for the steel-clad EV. In the archetypal 4th of this year, Tesla lone sold 16,130 “other models,” which includes the Cybertruck and the now-retired Model S and Model X.