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Tesla’s Delivery Setback: A First-Quarter Disappointment

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Tesla's Delivery Setback
Tesla's Delivery Decline in 8%.

Tesla’s First-Quarter Delivery Setback

Tesla encountered a setback in its first-quarter delivery figures, revealing a shortfall that fell short of analyst predictions. Despite this, Tesla’s shares saw a 6% rise after the announcement.

Delivery Figures Below Analyst Predictions

The electric vehicle leader delivered 386,810 vehicles in the quarter, notably lower than the estimated 449,080, according to Bloomberg consensus. Specifically, Model 3 and Model Y deliveries totaled 369,783, showing a 10% year-over-year decrease and missing the expected 426,940 units.

Challenges in Production and Delivery

Production numbers for the quarter reached 433,371 vehicles, also below the anticipated 452,976. Of this total, Model 3/Y made up 412,376 units, falling short of the forecasted 439,194.

Factors Behind Volume Drop

Tesla attributed the drop in volumes to factors like the early stage of the production ramp of the updated Model 3 at its Fremont factory, as well as factory closures due to shipping diversions from the Red Sea conflict and an arson attack at Gigafactory Berlin.

Impact on Tesla’s Delivery Performance

Despite these obstacles, Tesla managed to deploy 4,053 MWh of energy storage products during the quarter. However, deliveries were significantly impacted, experiencing a more than 8% year-on-year decline. This signifies the initial annual decline in any quarter since 2020, with deliveries plummeting by 20% compared to Q4 2023.

Industry Trends Amid Delivery Decline

The decrease in Tesla’s deliveries comes amid a broader trend in the automotive industry, with several companies scaling back their electric car ambitions due to weaker-than-expected demand. Nevertheless, most analysts predict substantial growth in electric vehicle sales this year, indicating potential for recovery in subsequent quarters for Tesla.

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EU Probes Apple, Google, Meta Compliance

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Head of Internet Marketing in EU Talks on DMA
European Commissioner for Internal Market Talks On DMA

European Union regulators have set their sights on tech giants Apple, Google, and Meta, launching investigations into their compliance with the newly implemented Digital Markets Act (DMA). This marks the first time such probes have been initiated under this groundbreaking legislation, potentially resulting in hefty fines for the US-based companies.

In 25 March 2024, The European Commission has raised concerns about the practices of Apple, Google, and Meta, suspecting that they may not be fully adhering to the regulations outlined in the DMA. Specifically, the investigations will scrutinise whether Google Play and Apple’s App Store are allowing app developers to display offers to consumers outside of these platforms without incurring charges.

Google’s director of competition, Oliver Bethell, defended the company’s operations in Europe, highlighting significant changes made to their services to comply with regulations. However, the European Commission remains steadfast in its pursuit of ensuring fair competition in the digital marketplace.

In addition to investigating app marketplaces, the EU is also examining Google’s search results display to ascertain whether it favours its own specialised services over competitors’. Meanwhile, Apple faces scrutiny over its measures aimed at providing users with more control over their devices, including uninstalling software and choosing default settings.

One of the key provisions of the DMA requires large digital platforms, known as gatekeepers, to allow app developers the freedom to direct consumers to offers outside of dominant app stores without imposing charges. The EU has expressed concerns that Apple and Google may be limiting developers’ ability to communicate directly with users and promote offers.

European Commissioner Margrethe Vestager voiced apprehension over the tech giants’ adherence to their obligations, particularly noting ongoing charges imposed by Apple and Google on app developers. The investigations serve as a stern reminder to these companies of the importance of compliance with EU regulations aimed at fostering a fair and competitive digital environment.

As the investigations progress, the focus will be on the European Commission to guarantee that any discoveries lead to necessary measures being taken to support the principles of the DMA. With the threat of fines on the horizon, Apple, Google, and Meta need to handle these probes with meticulous regard for following regulations and being transparent in their operations.

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