Tesla’s cheap cars aren’t helping its low sales

Tesla spent more than a year showing that “affordable” cars were on the way, and they were they finally arrived last Octoberand stripped-down versions of the Model Y and Model 3 starting at $39,990 and $36,990, respectively. But the new cars aren’t moving the needle on Tesla’s overall sales, first-quarter results show.

Tesla said Thursday that it delivered 358,023 EVs worldwide in the first three months of the year, below analysts’ expectations of about 368,000. The company also produced more than it sold, with the final total reaching 408,386.

This means that Tesla only delivered 6% more cars in the first quarter of this year than it did in Q1 2025, which. it was the company’s worst quarter in years. The Q1 2025 figures were also affected by the company halting production lines for several weeks to replace some equipment, meaning that the Q1 2026 figures may not be a significant change.

The sales numbers are impressive for a company that has already promised to grow EV sales by 50% every year. And the poor first quarter means that Tesla is now at risk of seeing its sales decline for the third year in a row – at the same time his profits are also declining.

Tesla is not the only company struggling to grow EV sales, especially in the United States. Automakers have left — and sometimes, completely abolished – expansion plans and ambitions for new EVs. Newcomers have also suffered. Rivian announced Thursday morning that shipped more than 10,000 cars in the first quarter, a similar increase is seen every quarter.

Rivian has a new model waiting in the wings, as it is about to start shipping its affordable R2 SUV, which should boost sales. The company is banking on R2 being it has done very well right out of the gatealthough the cheapest version it won’t arrive until the end of 2027.

Tesla doesn’t have a new, best-selling car ready to go. The company he was has been working on a very affordable EV that was expected to cost around $25,000. But CEO Elon Musk killed the job in favor of full access to “CyberCab.” Instead of the $25,000 car, Musk instead had Tesla build the Model Y and Model 3 stripped down.

The only new model that Tesla has released in the past few years is the Cybertruck. While this outsells the majority of all-electric vehicles, it has completely faltered in the face of Tesla’s – and Musk’s – expectations for a metal-clad EV. In the first quarter of this year, Tesla only sold 16,130 “other models,” which include the Cybertruck and the retired Model S and Model X.