Tesla’s (NASDAQ:TSLA) downtrend on the markets accelerated when the company reported a 31% slump in shipments. At 51,000 units shipped, Tesla missed analyst expectations badly. Analysts thought the EV maker would ship 73,500.
Sadly, Tesla’s growth already ended in the third and fourth quarter. Sales in Canada and China probably worsened so much that it hurt overall results. Chances are high that Tesla now has too much inventory. In Q1, production outpaced deliveries by 22%. And with cash flow weakening, Tesla’s ability to manage its debt could become a problem later on.
Tesla blamed a massive increase in shipments to Europe and China, and challenges in that process, for the miss. This will move sales into Q2 instead of Q1. For the full year 2019, the company forecast sales of 360,000 to 400,000 units.
With EV plays out of fashion, investors may want to avoid TSLA stock. Nio (NYSE:NIO) is also struggling after its big miss in quarterly results scared off investors. Consider investing in traditional income-generation stocks like Ford (NYSE:F) or General Motors (NYSE:GM) instead.
Disclosure: author owns shares of Ford.
